Ethics and Worldcom

Topics: Ethics, Corporate governance, Stakeholder Pages: 2 (657 words) Published: December 7, 2005
In the case of WorldCom, a national company that began in 1983 and would provide long-distance telephone services, it is hard to determine where the problem begins. The case, as explained in the book, has never really found the core of the problem. We are told that financial reports were falsely created and improper accounting practices were found, but who is to blame? The textbook tells us that several of the former top financial executives pleaded guilty to securities fraud, however they defended themselves to say that they were forced to cover things up by other top officials.

As reading through the questions given in class it was hard to completely gather all thoughts into one area. We know that World Com is a for profit organization that provided telecommunications to customers nation wide. The company began in the early 1980's and it's main marketplace was domestic, however their products were available for global use.

The practices of questionable accounting practices effected Worldcom's investors the most. In the end, through the filing of bankruptcy and all of the other legal issues, it also affected the employees through layoffs and such. However, the investors were the ones who lost their money invested into the company. The investors were the primary Stakeholders affected through this issue as well. The stakeholder issues involved the investors as though they were investing into the purchase of stock for the company while there were internal audits going on throughout the company. While the audits were going on, no one outside of the company knew what was going on.

I think the main business ethical issue in the Worldcom case was the false reports and the idea that issues were held "secret" from the investors. It is morally wrong to withhold information from someone, especially someone who is investing so much money into something. Therefore the ethical issue that business decision makers lacked in this case what outright honesty...
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