Examining a Business Failure

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Examining a Business Failure � PAGE \* MERGEFORMAT �5�

Examining a Business Failure


The key to success of an organization is to stay competitive and focused in the business industry. When an organization has inadequate organizational leadership and are unlawful of conspiracy, fraud, falsifying documents or theft, they will experience failure like the companies: Tyco International Ltd., Chrysler LLC, Daewoo Motor America, WorldCom, or Enron. Although, no company plans to fail to many risks that exist in maintaining a successful business, it can be unfortunate for companies to go from prominence to demise. In the next couple of paragraphs, I will describe how the organizational theories could have predicted or explained the failure of WorldCom, along with comparing and contrasting the contributions of leadership, management, and organizational structures to the failure of the organization.

Bernie Ebber and WorldCom

Entering the telecommunications industry in Mississippi in 1983, the Chief Executive Officer (CEO) of WorldCom Bernie Ebber, initially started a company called Long Distance Discount Services (LDDS).

After LDDS became public and grew drastically through acquisitions, the organization merged with Advantage Companies (Tolunay, 2003). In 1995, LDDS's name was then changed to LDDS WorldCom and later the LDDS was removed and the company was named WorldCom. In 1998, WorldCom purchase MCI for $37 million and later became highly recognized due to its financial growth and expansion, along with its huge job creations and opportunities. However, the organization took a downfall in history as the 2nd largest long distance company. WorldCom tried to expand their business by purchasing Sprint Corporation for $129 million; however, the regulators blocked the offer because they knew the telecommunications industry was weakening, which would affect the performance of the organization.

Organizational Theories of WorldCom Failure

Accounting misrepresentation and fraud covered the financial issues of WorldCom. In...