Examining A Business Failure Paper

1004 words - 5 pages

Examining a Business Failure Paper

Rhonda Ellis-Thomas

LDR/531

May 30, 2012

Dr. Felicia A. Bridgewater

Examining a Business Failure Paper

2002 has witnessed its share of scandals. Enron, WorldCom, Tyco, and Global Crossing are just a few names to mention. WorldCom, the nation’s No. 2 long-distance phone company, filed for Chapter 11 bankruptcy protection in July 2002, approximately one month after it publicized that it had indecorously booked $3.8 billion in expenses (Beltran, 2002). The purpose of this paper is to describe how specific organizational-behavior theories could have predicted or explained the company’s failure ...view middle of the document...

Group think is an occurrence that arises when the aspiration for group compromise dominates people's good judgment aspiration to offer options, analyze a situation, or communicate a detested belief. Here, the aspiration for team consistency successfully thrusts out good decision-making and problem solving (Mind Tool, 2012).
The features of the group think theory are comprised of feelings of imperviousness, ethical dominance, team pressure, and self-censorship. As a result, organizations that follow such thought processes have a tendency to ineffectively scrutinize an alternative course of action and evade scrutinizing the complicated threats (Scharff 2005). The group-think theory offers solid indication the leadership and management approach of WorldCom was a crucial influence in the failure of the organization.
Culture and atmosphere dispirited uncooperative belief, also confirmed “followers” would emulate. When the CEO was questioned about the company’s human resource policy, one particular executive responded “if you don't like the policy, you can leave” (Scharff 2005). With these types of leadership models and endless stress, most staff members would have the sensation of being too nervous to bring up doubtful or deceitful practices.
Additionally, the company’s leadership and management approach, presents suggestions of inappropriate behavior and dishonest actions taking place in most departments within the organization. First, the company’s top leader contributed in deceitful events consistently. For example, the CEO reported fabricated Securities and Exchange Commission (SEC) reports and stressed other chairs to accomplish make up monetary data any way they could, to include fraud. The CEO and CFO progressed to lead the company’s management to overlook and oblige duplicitous behavior, and were proliferated regular staff on numerous occasions.
Specific emails exemplified certain employees being completely conscious of the accounting indiscretions and partook in covering up such practices (Scharff 2005). Furthermore, the techno structure was also taking part in this plunging spiral of fabricated reports and apprehensive accounting practices. Their auditors, Arthur Andersen failed to identify the accounting indiscretions and did not continue to try and pinpoint them; most of all, the...

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