Management Planning Paper

Management Planning Paper
WorldCom or “MCI Inc.” (Presently) was a telecommunications company founded in 1983. The company began as Long Distance Discount Services, Inc. (LDDS) and was based out of the state of Mississippi. The company became publicly owned corporation by 1989 as a direct result of the merger between themselves and “Advantage Companies Inc”. It was at this time the company took on a new name (LDDS WorldCom). The primary function of WorldCom at the time was to provide long distance calling and was at one point the second largest company doing this, outmatched only by AT&T.
Early on WorldCom was portrayed as very promising company that made its way to the top by merging and purchasing smaller companies in order to spread their control throughout the country and more. The management team of WorldCom, led by their chief executive officer (CEO) Bernie Ebbers was so undeniably powerful and strategic that at one point almost performed the largest merger in history with Sprint but the proposal was thought to be something of a “monopoly” and thus never had the opportunity. Towards the end of their promising run WorldCom was estimated to be worth upwards of $20 billion.
Although the company was thought to be something of a “titan” among telecommunication companies it was later brought to the attention of the world that many of its management members as well as Mr. Ebbers were involved in fraud. Mr. Ebbers who was thought to be something of a genius for making WorldCom a “powerhouse”, his direct involvement in the downfall of the company discredited him as a successful leader and in turn branded him as an unethical failure as a leader. Bernie Ebbers allowed his company to face the largest bankruptcy in U.S. history and for this was sentenced to 25 years in prison in 2005 (Kidwell, Martin).
The company’s sense of responsibility towards the community and environment (both ecological and social) fell undeniable short of consumer expectations. WorldCom filings for bankruptcy allowed many investors to lose savings, cars, homes etc. Companies such as WorldCom are expected to take on social responsibility and act in such a manner that people can look up to those who run the corporation. It is a known fact that people/companies that donate to charities and help the people in turn receive better responses toward their work and by filing for bankruptcy and having members involved in fraudulent charges WorldCom’s lack of corporate social responsibility led directly to the demise of this multibillion dollar superpower. Much like that of Adelphia Cable, which suffered in much of the same ways, WorldCom used unregulated and unsanctioned accounting methods to increase company earnings and this later led to their predetermined fate into bankruptcy and infamy (“How does lack…”).
The company fell victim to the same fate as many others like it (Enron, Adelphia etc.), unfortunately the operational planning was something of a hoax and much of the financials were a shame due to the fillings of only a sum few, a roughly estimated 20-30,000 people lost their jobs, investors lost billions (“How does lack…”). The fall of WorldCom directly influenced mass doubt in investment especially among NASDAQ seeing the company never truly recovered from the devastation. This can all relate back to the fact that the company didn’t have much of anything related to that of a contingency plan (a way to get back into business). Rather than having a developed plan that could potentially pull the company back up from the redline (which it never did) management never took the time to brainstorm these ideas. By falling to regulate loans to executives such as Mr. Ebbers who received a loan of $341 million which was granted to him by the board they allowed the company to be taken advantage of without having a backup plan incase loans as such weren’t returned to the company and thus allowed a multibillion dollar company to cease to exist (Moberg, 2003).
By ignoring its corporate social responsibility WorldCom allowed itself to fall apart from within and was significantly impacted by its illegal and unethical showings of company profits. Its lack to look out for shareholders and as well as the lack of providing itself with a contingency plan left WorldCom to the mercy of the untrustworthy leadership and in turn became a lesson for us all to learn from. It is very unfortunate that such a lucrative and outstanding company such as WorldCom could come and go in such a short period of time. But by following procedures, developing plans, and paying closer attention to detail; thousands of men and women could still be happily employed by the corporation and billions of dollars lost during their bankruptcy would never have needed been lost.

Reference
How does lack of corporate social responsibility hurt a company's bottom line? | Investopedia. (2015, January 12). Retrieved March 11, 2016, from http://www.investopedia.com/ask/answers/011215/how-does-lack-corporate-social-responsibility-hurt-companys-bottom-line.asp
Kidwell, R. E., & Martin, C. L. (2005).Managing organizational deviance. Thousand Oaks: SAGE Publications.
Moberg, D. (2003). WorldCom.Markkula Center for applied ethics. Retrieved March 12, 2016, from http://www.scu.edu/ethics/dialogue/candc/cases/WorldCom.html