Submitted By: Submitted To:

Kanika Khandelwal Dr. Jyotsna Sharma

Associate Professor

Introduction:

Bernard Ebbers, former CEO of WorldCom, was known for his conflict avoidance and disregard for
internal company conflict. He avoided facing the economic troubles of the telecommunications industry
and grew WorldCom's $9 billion accounting fraud to avoid confronting the situation. Ebbers's "shoot
from the hip" style and resistance to new technology led to a company culture that demanded success
at all costs. As WorldCom acquired new companies, its accounting procedures, computer systems, and
customer service issues became more complex. Ebbers's refusal to confront the harsh economic truth
led to the company's financial problems. In 2005, Ebbers was found guilty of fraud, conspiracy, and filing
false documentation. WorldCom was purchased for $7.6 billion and integrated into Verizon in 2006,
with Ebbers serving a 25-year jail sentence. The company's stock prices declined dramatically, and
Ebbers left the company in 2002.

Q.1. What potential causes of conflict existed at WorldCom during Bernard Ebbers’ administration?

Answer: Possible Causes of Conflict at WorldCom Under Bernard Ebbers' Administration:

 Because of Ebbers' well-known temper, his tendency to avoid internal conflicts within the
company, and his unwillingness to accept unfavorable information, employees were
discouraged from bringing up difficult issues with Ebbers.
 The company's quick expansion through acquisitions complicated computer systems, customer
service problems, and accounting practices, creating internal strife and possible disputes.
  Ebbers' aversion to email and reluctance to adopt new technologies hampered the company's
ability to collaborate and communicate effectively.
 Employees were probably under pressure to maintain success at any costs, and this, along with
Ebbers' avoidance of more significant strategic decisions and long-term planning, led to internal
conflicts as workers struggled to meet the unreasonable expectations placed on them.

Q.2. What might have happened if Ebbers had been prone to a different conflict-handling style, such as
compromise or collaboration?

Answer: Had Ebbers chosen a different approach to handling conflicts, like collaboration or compromise,
it's probable that:

 Internal conflicts could have been handled honestly and amicably, resulting in improved
problem-solving and decision-making.
 A more positive company culture may have resulted from employees feeling more at ease to
voice problems and offer substitute ideas, thus preventing the eventual financial fraud.

Q.3. How did having a small “inner circle” of leadership affect the corporate culture at WorldCom?

Answer: Impact of a Small "Inner Circle" of Leadership on Corporate Culture:

 Under Ebbers, a small inner circle of leadership was nurtured, which resulted in an exclusive
culture where only a chosen few were aware of information and decision-making procedures.
 This hierarchical structure probably made things less transparent, made it harder to
communicate, and supported a top-down management style.
 If they had not been a member of this inner circle, workers would have felt overlooked or
alienated, which could have resulted in resentment and a decline in morale inside the
organization.

Q.4. If you were Cynthia Cooper, how might you have dealt with being ignored?

Answer: Handling Ignoration as Cynthia Cooper:

 It must have been difficult for Cynthia Cooper to be disregarded by coworkers when she was
exposing cases of financial dishonesty.
 If needed, Cooper may have taken her concerns to the board of directors, senior management,
or outside regulatory bodies.
 She could have ensured that the proof of wrongdoing was unquestionable by carefully recording
her findings and persevering in her inquiry in the face of challenges.
Q.5. What options did Cooper have to deal with the company conflict?

Answer: Cooper was presented with a number of options for handling company conflict, including:

 Carrying out her inquiry on her own and, if required, elevating her findings to higher authorities.
 Seeking assistance from coworkers or other staff members who had similar concerns, and
pushing for a group effort to resolve the problems.
 Seeking advice from outside counsel or legal specialists to comprehend her rights and
obligations when addressing the company's issues.

Q.6. What responsibility did the board of directors have to detect and confront the problems at
WorldCom?

Answer: The Board of Directors' Responsibilities:

 The board was tasked with identifying and addressing WorldCom's issues, which included
supervising the company's financial reporting and guaranteeing adherence to legal and
regulatory obligations.
 Carrying out impartial audits and inquiries to confirm the precision and soundness of financial
reports.
 Making management answerable for moral behavior and open dialogue with stakeholders.
 Acting quickly to address allegations of wrongdoing or irregularities; this may involve firing
executives found to be at fault and putting corrective measures in place to stop future incidents.