Organizational Dynamics

Case:
Avoiding Conflict at Worldcom

Submitted By: Submitted To:

Kush Kumawat Dr. Jyotsna Sharma
 Introduction:

Bernard Ebbers, the former head of WorldCom, had a habit of avoiding conflicts and problems within the
company. Instead of tackling the tough issues facing the telecommunications industry, he chose to hide them
and continued to deceive investors with fraudulent accounting practices. Ebbers was known for his impulsive
decision-making and reluctance to embrace new technology, which created a culture where success was
valued above all else, even if it meant bending the rules. As WorldCom expanded through acquisitions, its
internal systems and customer service problems became more complicated, but Ebbers refused to
acknowledge the financial difficulties the company faced. Eventually, his actions caught up with him, and in
2005, he was convicted of fraud and other charges. WorldCom's downfall was inevitable, leading to its
acquisition by Verizon in 2006 for a fraction of its former value. Ebbers was sentenced to a lengthy prison
term, and the company's stock prices plummeted, signaling the end of an era.

Q1).What potential causes of conflict existed at WorldCom during Bernard Ebbers’ administration?

Ans:

Under Bernard Ebbers' leadership at WorldCom, conflict arose due to several reasons:

 Ebbers' hot temper and aversion to dealing with internal disagreements made employees hesitant to raise
challenging issues with him.
 The company's rapid growth through acquisitions made things like computer systems, customer service, and
accounting more complex, leading to internal tensions and potential conflicts.
 Bernard Ebbers didn't like using email or embracing new tech, which made it hard for people at WorldCom to
work together well. Workers likely felt pressured to keep succeeding at any cost, and because Ebbers avoided
making big decisions and planning for the future, employees fought internally as they tried to meet impossible
goals.

Q2).What might have happened if Ebbers had been prone to a different conflict-handling style, such as compromise or
collaboration?

Ans:

If Ebbers had opted for a different way of dealing with conflicts, like working together or finding middle ground, it's likely
that:

 People within the company could have addressed internal disagreements openly and peacefully, leading to better
problem-solving and decision-making.

 A more positive work environment might have emerged because employees would have felt comfortable expressing
concerns and suggesting alternative solutions, which could have prevented the eventual financial wrongdoing.
 Q3). How did having a small “inner circle” of leadership affect the corporate culture at WorldCom?

Ans:
Having a small group of leaders close to Ebbers affected the company's culture in several ways:

 Only a select few were privy to important information and decision-making, creating an exclusive atmosphere.

 This setup likely made communication less open and promoted a top-down management approach.

 Employees outside this inner circle may have felt ignored or disconnected, leading to resentment and lower
morale within the organization.

Q4). If you were Cynthia Cooper, how might you have dealt with being ignored?

Ans: Being disregarded while exposing financial dishonesty, Cynthia Cooper likely felt

isolated and frustrated. She could have escalated her concerns to higher-ups or regulatory bodies,

seeking attention and action. Meticulously documenting her findings would have bolstered her

case, ensuring credibility. Perseverance despite obstacles would have been crucial for seeing the

inquiry through. By demonstrating courage and resilience, Cooper could have increased the

chances of her concerns being addressed effectively.

Q5).What options did Cooper have to deal with the company conflict?

Answer:

Cynthia Cooper had several choices for dealing with company conflicts:

 Investigating the issues independently and, if necessary, bringing her findings to higher-ups.

 Collaborating with coworkers who shared her concerns and working together to address the problems.

 Getting guidance from external legal experts to understand her rights and responsibilities in dealing with the
company's issues.

Q6). What responsibility did the board of directors have to detect and confront the problems at WorldCom?

Ans:

The Board of Directors had several important duties:

 They were responsible for spotting and dealing with problems within WorldCom, like overseeing financial
reports and making sure the company followed the law.

 They needed to do fair checks and investigations to make sure the financial reports were accurate and
trustworthy.
 Holding management accountable for acting ethically and being open with stakeholders.

 Acting swiftly to address any claims of wrongdoing or irregularities, which might mean firing executives
responsible and implementing changes to prevent similar issues in the future.