Examining a Business Failure: WorldCom
LDR531
12/13/2010
Lynette Grizelle

Over the past 15 years there has been numerous business failures in the United States and most of these failures have been because of inadequate organizational behavior techniques. According to The Great American History Fact-Finder, the WorldCom bankruptcy was the “largest corporate fraud and business failure in the United States” (WorldCom Bankruptcy, 2004). Prior to their fall in 2002 WorldCom was the nation's second-largest long distance and data services provider. They were also known as one of the largest Internet providers in the world and a provider of critical applications for the United States government (Zekany, Braun, & Warder, 2004). Even though WorldCom appeared to being doing well financially according to their financial statements, the truth was the chief executive officer (CEO) Bernard Ebbers, chief financial officer (CFO) Scott Sullivan, and controller David Meyers were enforcing unlawful accounting practices. According to Zekany, Braun, and Warder (2004) “Ebbers made as many acquisitions as he could, relying heavily on using WorldCom stock as currency,” even though the stock was not worth nearly as much as assumed by the public. Cynthia Cooper, internal auditor for WorldCom and her associates began noticing accounting discrepancies years before the organization went under. In an interview with Katz and Homer (2008) Cynthia stated that, “my feelings changed from curiosity to discomfort to suspicion based on some of the accounting entries my team and I had identified, and also on the odd reactions I was getting from some of the finance executives… The CFO asked me to delay our capital-expenditure audit… the controller told me I was wasting my time auditing capital expenditures, it made me uncomfortable.” Cynthia was obviously right in her suspicions because