Walt Pavlo Case analysis
My first reaction was why didn’t he leave MCI like his mentor did? Mr. Pavlo knew that the bad debt was uncollectable, financial targets and expectations from his superiors and upper management were unrealistic, still he decided not to walk away!
This case is a best example of how ethical behavior at top management plays such an importance role in the success or failures of its employees and the organization as a whole. MCI’s upper management was not concerned about ethics; their main focus was to boost its profits to meet Wall Street’s expectations. It was evident that the culture at MCI did not recognize or act against misconduct which created negative work environment. When management put pressure on their employees to meet unrealistic goals and forcing them to do whatever to get the job done will essentially force the employees to unethical practices to meet their targets, and in most cases employees do so to save their job. MCI’s aggressive sales and marketing programs, management preoccupied with meeting analyst expectations, neither conducting proper background checks nor reporting known customer fraud to authorities and shareholders are the best examples of negative work environment and unethical practice.
In my opinion Pavlo’s behavior was result of a bad barrel, as showed in 2005 National Business Ethics Study (NBES) research, employees perceive the behavior of their peers and most importantly the top management. In Pavlo’s case, it is evident that he was not allowed to recognize the bad debt by not providing allowance requested instead he was provided with incentive plans if he is able to meet his department’s financial targets, which encouraged him to cook the books and manipulating the numbers.
One interesting observation was what is wrong with the corporate world? And I agree with Mr. Pavlo, there is no guarantee that there will not be another big corporate fraud, it is just