Case study of business ethics at worldcom; should ebbers have gone to jail? assignment

Again, it is the CEO’s duty to provide oversight and accountability for proper accounting and reporting. Securities fraud, particularly in the form of authorizing loans, was another illustration of unethical decisions at WorldCom. For example, the “$341 million loan the board granted Mr. Ebbers is the largest amount any publicly traded company has lent to one of its officers in recent memory” (Mober, D & Romar, E. 2002). The ethics of such loan should be questioned. “ A large loan to a senior executive epitomizes concerns about conflict of interest and breach of fiduciary duty” (Mober, D & Romar, E. 002). These decisions at WorldCom illustrate the need for ethical decision making at the executive level. The first step to making a moral decision, take the time to think of everyone that might be hurt or helped by the action. Utilitarianism suggests that an action is right if it maximizes happiness for the greatest number of people over the long term, given that everyone’s happiness is of equal value. In other words, when we make a moral choice, the common denominator is human happiness.

Simply stated, an action is good if it creates more happiness than unhappiness. There should be concern for everyone who might be involved and each person’s welfare must be considered equally. Everyday, decisions are made within a company that could potentially affect other people. CEO’s seem to have forgotten utilitarianism considerations. Bernard Ebbers’ actions lead one to believe that he made decisions in the name of WorldCom from a selfish perspective and did not take time to think of everyone that may be hurt by his actions. Ebbers appeared to be an indifferent executive who “ paid scant attention to the details of operations” (Mober, D & Romar, E. 2002). The second step to ethical decision making is the deontological aspect of the decision. Here we assess the rights people have and what duties might go along with them without consideration given to consequences. Ebbers ignored the rights of the shareholders to hear the truth about the financial situation at WorldCom in order to drive the price of stock up and in the process “ ruined thousands of careers and financial futures” (Jones, D. 005). The hardest step in the ethical decision making process could be to simply make a decision and stick by it. It was in this step that Ebbers truly failed. He orchestrated “ one of the most extravagant feats of dishonesty Corporate America has ever experienced” (Jones, D. 2005). Then when the pressure mounted, he did not own up to his actions, but played ignorant, a defense no one subscribed too. “ The I-don’t-know-anything defense seems dumb from the get-go,” said Duane Windsor, a professor of management at Rice University who specializes in business ethics. It’s like the captain of the Titanic saying he wasn’t responsible because he was busy with something else when the ship hit an iceberg. ” (Lazarus, D. 2005). WorldCom’s CEO Bernard Ebbers deserved his sentence. “ He was responsible for creating one of the nation’s largest telecom companies, virtually from the ground up” (Lazarus, H. 2005), but he was not responsible for his own actions. He failed miserable at ethical decision making. He looked at his options from a purely self-indulgent perspective and when caught he tried to play dumb. Yet he knew enough before WorldCom’s 2002 bankruptcy to amass a personal fortune of about $1. 4 billion and to receive millions in annual compensation” (Lazarus, H. 2005). CEO’s are the head of their respective companies and with this prestige come responsibilities. Even if Ebbers spoke the truth, he must remember that “ it’s not the fault of companies when WorldCom or Enron collapse from massive fraud, it’s the fault of those who ran the companies” (Jones, D. 2005).