WorldCom Company was among the most significant telecommunication corporations based in the United States that engaged in the manufacture of communication devices. The company was a prominent company in the United States and was one of the most active competitors of significant telecommunication industries within the region. However, the company faced some ethical issues that led to the destabilization of a company that was considered the largest in the US. The ethical dilemma in the company affected the operations of the company and affecting the image of the company in both the local and international market. The company engaged in fraud that focused on converting the companies loses into profits through hiding of the operating expenses of the company and listing them as long-term capital investments. The move by the company was focused on maintaining its position in the market and boosts the earnings of the top leadership considering the slow growth rate that the company experienced in the total revenue. Another ethical issue involved unethical behaviors of the top leadership which focused on the individual financial interests other than the interest of the company in determining the action to be taken about the experienced decrease in the total revenues. Additionally, the company faced unethical relations with the analyst who assisted the top management in engaging in the fraud.
Upon engaging in the accounting irregularities, the company filed for bankruptcy protection to provide an avenue that would allow the company to solve the issues amicably without the interference of the law based on the irregularities. The company agreed to sign an agreement that mandated them to pay the $750 million. The amount was to be paid to the security and exchange commission and was purposed to pay the investors that ad invested in the given company. The strategy by the company to sign for bankruptcy protection helped the company to maintain its image in the market despite the significant irregularities that contributed to ethical dilemmas in within the company. The measure by the company would help in reimbursing the investors to save the company from undergoing public humiliation considering it was considered one of the largest and prominent companies in the United States.
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To overcome the ethical issues that rose from the massive irregularities performed relating to fraud in the financial accounting of the company; WorldCom faced some legal and professional issues that forced the company to act accordingly in a bid to overcome the cases presented. The first legal consideration involved filing for bankruptcy protection to allow the company to resolve the major issues that concerned the financial accountability. Bankruptcy protection is a significant move that helps in a reorganization of a company o issues concerning financial stability and other operations in the company based on previous debts and other irregularities in a company. The second legal consideration involved sacking the individuals involved in the top management of the company based on the irregularities that were performed in the organization. The senior vice president and the controller of operations in the company resigned from their duties in the company, which was considered a professional consideration based on the ethical issues that faced the company. Additionally, the company undertook the measure to lay off employees to pave the way for the investigations and reorganization of the organization.
The irregularities within the company affected significant operations undertaken in the organization and influenced its overall image in the local and international market. The cases of irregularities affected the financial stability of the company leading to a situation whereby the company was not in a position to meet significant operations that required finances. The image of the company was significantly influenced based on the ethical issues that were portrayed thereby leading to a situation whereby consumers lacked enough trust in the company's operations. The success of a company is based on the image of a company in the market as it helps in ensuring that more clients win trust based on the image portrayed. Since WorldCom was a prominent company in the telecommunication industry within the United States having a significant market share, the irregularities in the company affected the market share thus leading to a drastic drop in the prominence of the company in the industry.
The irregularities in the company had a significant influence on key stakeholders that were involved in running the organization. The case involving the company affected the employees where majority lost their jobs as a result of the case since the company could not cater for the employees’ salaries and wages as it was considered bankrupt. The stakeholders in the given company faced a risk of lost investments whereby the company was not able to show a return on their investments. The risk associated with the financial investments resulted from the reduced revenue obtained from the company. Additionally, the clients were affected based on the fact that the company was unable to meet the need of the clients.
