Examining a Business Failure

In: Business and Management

Submitted By neowriter
Words 626
Pages 3
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Abstract
The following article will discuss the failure of the organization known as WorldCom. It will determine the reason for the fall of the company failure comparing and contrasting what could have been done by management and leadership. The organizational theories that could have predicted the failure of management and the impact of the company’s structure

EBF 3
The company knows as WorldCom was one the leading telecommunication giants of its day. WorldCom achieved its position as a significant player in the telecommunications industry through the successful completion of 65 acquisitions. Between 1991 and 1997, WorldCom spent almost $60 billion in the acquisition of many of these companies and accumulated $41 billion in debt. Two of these acquisitions were particularly significant. The MFS Communications acquisition enabled WorldCom to obtain UUNet, a major supplier of Internet services to business, and MCI Communications gave WorldCom one of the largest providers of business and consumer telephone service. By 1997, WorldCom's stock had risen from pennies per share to over $60 a share. Through what appeared to be a prescient and successful business strategy at the height of the Internet boom, WorldCom became a darling of Wall Street. In the heady days of the technology bubble Wall Street took notice of WorldCom and its then visionary CEO, Bernie Ebbers (Moberg, Romar, 2003). Acquisition after acquisition led to started to warrant a suspicion into the dealings of the WorldCom organization. The company hit rock bottom when it declared bankruptcy after its merger with MCI. This is where the proverbial ball of yarn starts to come unraveled for the company. The company manipulated the account books and reported false gains and increases to continue to make it appear as a hot item on the stock market. In actuality the…...

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