View stunning SlideShares in full-screen with the new iOS app!Introducing SlideShare for AndroidExplore all your favorite topics in the SlideShare appGet the SlideShare app to Save for Later — even offline
View stunning SlideShares in full-screen with the new Android app!View stunning SlideShares in full-screen with the new iOS app!
Underlying Philosophy: Purpose of work is a paycheck
Moral Justification: Work-life follows bureaucratic laws, no individual free-will
Relationship to Work: Dependent, low self-worth
Primary Motivators: Money, perks and fear
External Rewards and Punishments Increase Shareholder Value Results-Oriented Ends-Justify-Means Passive and Dependant Workers Corporate Values Command and Control Leadership Bureaucratic Organization Meaningless Work
$100 invested in 1989 returned $6,000 by 1998
WorldCom posted a 137% stock price appreciation in 1998 alone
Declared a “Success” by Wall Street Journal in 1999
Betty Vinson was hired in 1996 as a mid-level accountant and was promoted to senior manager in WorldCom’s corporate accounting division. The division compiled the company’s quarterly reports. Ten accountants reported to Ms. Vinson. Vinson reported to Buford Yates.
In mid-2000 it was clear that WorldCom would not make its financial expectations, which were scrutinized by Wall Street analysts. A scramble ensued to try and reduce expenses on the company’s statements enough to meet Wall Street’s expectations for the quarter. Yates convened a meeting, explaining that Scott Sullivan, WorldCom’s CFO, suggested that a reserve account be used to, in part, boost earnings. According to Sullivan, the transaction was the only way out of the company’s troubles. The transactions would violate accounting rules.
Vinson and Yates faced the same dilemma in the second, third and fourth quarters of 2001. Both contemplated resigning, but followed orders. They withdrew from co-workers, afraid that they might let something slip. When an accountant questioned the discrepancy, Yates sent an e-mail stating: “Show those numbers to the damn auditors and I’ll throw you out the f____ window.” In withholding the information from the General Tax Counsel, Yates stated that “I’ll need to kill him if I tell him.” In 2003, Sullivan, Yates and Vinson are indicted for securities fraud.
Vinson and Yates’ position was described as “untenable,” “victims of unscrupulous higher managers.”
Tentative Conclusion : The WorldCom disaster is not only about “greed.” Instead, its about a corporate culture that fostered dependent workers with low self-esteem, who could not exercise free-will, and who performed for external rewards.
Tentative Conclusion : WorldCom’s code of conduct, ethics training and compliance programs were ineffective because the organization’s values were deterministic and material.
Tentative Conclusion : WorldCom’s executive leaders used power, fear and intimidation to lead and, therefore, autonomous individuals, with high self-esteem were viewed as a threat to the organization’s mission.