Worldcom Case Study
An Ethical Dilemma at WorldCom:
A case study of Cynthia Cooper
The Scenario
One May afternoon, while sitting in his cubicle at WorldCom Inc. headquarters located in Clinton, Mississippi, Gene Morse was stunned to find an accounting entry for $500 million in expenses, which was not accounted for with any invoices. He immediately reported this entry to his boss, vice president of internal audit Cynthia Cooper (Pulliam & Solomon, 2002). Little did they know at the time that this discovery would begin a journey for Cooper and her team that would challenge their core values, ethical beliefs, moral principles, and strain their physical strengths and personal relationships. They would eventually unearth a $3.8 billion dollar fraud. Cooper was faced with the ethical dilemma of reporting what she had found which she knew would devastate the company and its stakeholders, versus ignoring the problem, and taking no action. By June of 2002, Cooper had made her choice. On June 25, 2002, Wall Street was shocked by the announcement from WorldCom “that it had inflated profits by $3.8 billion over the previous five quarters” (Pulliam & Solomon, 2002, p A1). Thus began the downward spiral which would bring an end to an organization that once boasted a reputation of being a Fortune 500 company. Careers and lives would be ruined. Cynthia Cooper’s life would be changed forever.
According to Cooper (2008, p. vii), “I never aspired to be a whistleblower. It wasn’t how I envisioned my life. But life is full of unexpected turns.” The Merriam-Webster Dictionary defines a whistleblower as “one who reveals something covert or who informs against another.” Despite its negative connotation, blowing the whistle was the right thing to do in this case. Cooper made “every attempt to resolve the problematic issues through available internal procedures prior to going public” (Kranacher, 2006 p.80). The day before the WorldCom fraud announcement, Cooper was a private citizen. The day after, she
A case study of Cynthia Cooper
The Scenario
One May afternoon, while sitting in his cubicle at WorldCom Inc. headquarters located in Clinton, Mississippi, Gene Morse was stunned to find an accounting entry for $500 million in expenses, which was not accounted for with any invoices. He immediately reported this entry to his boss, vice president of internal audit Cynthia Cooper (Pulliam & Solomon, 2002). Little did they know at the time that this discovery would begin a journey for Cooper and her team that would challenge their core values, ethical beliefs, moral principles, and strain their physical strengths and personal relationships. They would eventually unearth a $3.8 billion dollar fraud. Cooper was faced with the ethical dilemma of reporting what she had found which she knew would devastate the company and its stakeholders, versus ignoring the problem, and taking no action. By June of 2002, Cooper had made her choice. On June 25, 2002, Wall Street was shocked by the announcement from WorldCom “that it had inflated profits by $3.8 billion over the previous five quarters” (Pulliam & Solomon, 2002, p A1). Thus began the downward spiral which would bring an end to an organization that once boasted a reputation of being a Fortune 500 company. Careers and lives would be ruined. Cynthia Cooper’s life would be changed forever.
According to Cooper (2008, p. vii), “I never aspired to be a whistleblower. It wasn’t how I envisioned my life. But life is full of unexpected turns.” The Merriam-Webster Dictionary defines a whistleblower as “one who reveals something covert or who informs against another.” Despite its negative connotation, blowing the whistle was the right thing to do in this case. Cooper made “every attempt to resolve the problematic issues through available internal procedures prior to going public” (Kranacher, 2006 p.80). The day before the WorldCom fraud announcement, Cooper was a private citizen. The day after, she
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