Laquita Sanders

WorldCom Analysis
Business Ethics

How far should a managers accountability extend within a company? I do

believe that a manager should be held accountable for all business-related actions and

decisions of his or her subordinates. A manager should be fully aware and informed of

the companys position. It is managements responsibility to ensure that employees and

subordinates are following correct protocol. You are either part of the solution or part of

the problem (www.skillsoft.com). A manager is on the line when things are going

according to plan and when they are not. Therefore, Bernie Ebbers defense as the

dummy defense is one that would not stand in the court of law. That is no excuse. All

managers should know the outcome of a companys situation.

What do you do when higher authority commands an illegal or unethical act?

Should the employee be held accountable as well? When a subordinate is following

orders given by higher authority, and at the same time committing unethical or illegal

actions, they should definitely be held accountable; only to the extent that they were fully

aware of what their actions meant. Using Betty Vinson as an example, she was fully

aware of the accounting fraud the company was committing. She also knew the outcome

would result in falsified reports being released to the public. There was no way Vinson

could deny having unfair rulings against her. She was just as guilty as Bernard Ebbers.
 On Monday, April 18th Bernard Ebbers asked for a new trial. He and his lawyers

contended that denial to grant immunity to three former WorldCom executives who were

reluctant to testify and who the defense says could have helped prove Ebbers innocence.

Lawyers for Ebbers also stated the trial judge unfairly told jurors they could find him

guilty based on conscious avoidance, which they said allowed jurors to convict Ebbers

because he should have known about the fraud (USA Today). To know about it and do

nothing shows where his true moral philosophy.

When Betty Vinson at first resisted the pressures of making the illegal accounting

entries, her moral philosophy was that the transfer wasnt good accounting. Under

accounting rules, reserves can be set up only if management expects a loss in the unit

where the reserve is established, and that there must be a good reason to reduce them.

She didnt like the fact that she was asked to fudge numbers. However, Vinson later

decided to go along with her superiors at WorldCom. She made the illegal accounting

entries, and like most unethical individuals, she was thinking of self rewards. She was

the chief breadwinner who depended on the insurance and she wasnt excited about

entering the workforce as a middle-aged worker. What other reasons could she have had

for going along with the corruption?

At the February 2nd trial of Bernie Ebbers, Betty Vinson testified that she made the

false accounting entries because of her financial situation. She wasnt making much

money, so that seemed like the smart thing to do. She also stated that she liked the people

she worked for and wanted to stay with them at the company (www.clarionledger.com).

She wanted to feel apart of the WorldCom culture.

 While there are four types of organizational culture, the culture that best describes

WorldCom is the exacting culture. The exacting culture shows little concern for people

but a high concern for performance; it focuses on the interests of the organization

(Business Ethics pg. 119). If WorldComs executives were concerned with its employees

they wouldnt have placed them in umcompromising situations. The only thing they

were concerned with was producing presentable financial statements to Wall Street.

There was very little concern for employees. When WorldCom offered the employees

more money that was another way to keep them quiet. WorldCom didnt want to end up

in the news like other companies.

Its funny how the scandal involving Enron, has a role within WorldCom.

Accounting firm Arthur Andersen played the role as auditors for WorldCom. WorldCom

investors sued the auditor, saying it had broken securities laws by failing to protect them

after the telecom company collapsed in an $11 billion U.S. fraud (www.cbc.com). As an

employee, I would be careful about the ethical decisions made.

To prevent what happened to Betty Vinson from happening to me, I would

definitely decline to make any illegal accounting entries and also contact the SEC and/or

FBI. By declining to make such entries, Im sure that would result in termination of

employment. In the end, Ill still have my freedom and the chance to keep a good

reputation.

Currently, Bernie Ebbers is waiting to start his sentence on October 12, 2005. He

will not have the opportunity to experience Club Fed, a low security jail thats more

reminiscent of university halls of residence rather than a traditional jail (The Times).
Instead, Ebbers will be sent to a medium-security jail deemed for white-collar

criminals.

Having seen the domino effect of how scandals have cause companies to collapse,

executives and employees have to be very careful and open-minded about the decisions

they make. One bad move can destroy a company. One bad move can destroy their life.

That bad move revolves around what one perceives as right or wrong. That bad move

revolves around what one would say is good ETHICS.(Laquita Sanders).

 Works Cited

www.skillsoft.com

www.cbc.com

The Times

Business Ethics pg. 119

www.clarionledger.com

USA Today