They learned the company encouraged "a systemic attitude conveyed from the top down that employees should not question their superiors, but simply do what they were told. Over time, these messages became "the basic assumptions which are widely held as truth within the organization and anyone who disagrees is seen as idiotic or foolish and automatically dismissed. 5 Although the following two examples are specific to WorldCom, they illustrate when employees belonging to a culture believe what others believe and doing as they do. Examples: 1) Scott Sullivan assured employees "that they were doing nothing illegal and that he would take full responsibility for their actions.
6 2) Employees were quoted saying, "they believed that Sullivan, with his "whiz kid" CFO reputation, probably knew what he was doing. "7 The practice of "groupthink" (a term coined by social psychologist Irving Janis in 1972) was also prevalent within WorldCom which led mployees to the assumption that they were doing what is best for the organization and its shareholders. One of the eight symptoms indicative of groupthink is "Self censorship of ideas that deviate from the apparent group consensus. "8 The culture in which WorldCom's top executives created led to the organization's eventual destruction.This culture enabled the management team to deal with external environments such as deterioration of industry conditions, heightened competition and overcapacity with a myriad of fraudulent acts which resulted in the ethical accounting breaches.
The following are several steps that WorldCom could have nstituted to help safeguard against the fraudulent reporting. 1) Establish a safe outlet for employees to express concerns about company policies and behavior. Ensure this internal group has an independent reporting structure. This group should be completely anonymous.
) Put in place an engaged and independent board of directors that are NOT comprised of former owners, officers or directors of companies acquired by WorldCom. The board should be required to meet at least twice a year by themselves to review current management's effectiveness and discuss any concerns and/or upcoming challenges. An important role of the board of directors is to serve as mentor and counsel to the executive management team. 3) Implement a system of checks and balance to deal with potential fraud and mistakes due to omission of data.The responsibilities should be distributed between various departments that are separate and no deal/transaction can be completed on its own.
4) Commit toa measurable performance review system such as S. M. A. R.
T. 9 Tie compensation to ethical standards as well as meeting financial performance goals. My experience has been that when managers take time to set measurable goals and argets for their employees, the company has a better working environment with lower turnover and individual employees are more equipped to make ethical workplace decisions.
