6. Use PowerPoint Slides 164 - 167 to cover the discussions on this issue.
Mr. Sullivan used the ends to justify his means. He was focused on short-term results. He thought
he could conceal the truth with his abilities. Questions he could have asked: Is this really a gray
7. All of Houston mourned when the truth about Enron emerged because it had been so generous of a
company in terms of supporting the community and the arts. The same is true here. WorldCom was
Compare & Contrast
1. Use PowerPoint Slide 167 for this discussion. The quotes offer some insights for the students on
their credos. Tell the truth. Do not succumb to pressure when you are asked to do something that
you know is wrong. Do not let the ends (saving the company) justify the means (accounting fraud).
Remember manipulating numbers is but a temporary fix, a nonsustainable competitive model. Note
that he refers to himself as a coward for not facing up to WorldCom’s financial downturn.
2. Sprint and AT&T are in much better financial condition and now understand that WorldCom’s numbers
were an illusion. Their observations at the time WorldCom was at the top of the market are proof of
the “if it sounds too good to be true, it is too good to be true.” WorldCom was defying basic market,
economic, and accounting principles, but yet, once again, those with expertise failed to raise those
questions or were too willing to accept facile explanations. Perhaps the students can learn from this
and other cases that there is no magic solution in business; that success comes down to the basic
business principles of keeping costs low, production up, customer service good, and paying attention
to the need for strategic changes and direction. There is no magic or one company that is this much
better than another, 132% better, is tough to explain in terms of what WorldCom was doing differently
from the other telecoms. Michael Keith does have new credibility because he was asking the right,
very logical questions.
3. The common threads so far in the cases studied (and these will carry through into other cases):
Pressure to maintain numbers
Fear among employees
Unwillingness to raise questions both internally and externally
Weak boards (for different reasons, but they were all weak)
Conflicts of interest abounded among officers and company and relatives, etc.
Perception that they were better and above the competitive fray in the marketplace
Good corporate citizens with many of the executives also being good community citizens
Use PowerPoint Slides 168 and 169 and have the students add any of their common
An important credo element here is the need to stay grounded – not succumbing to the belief that you are
above the others in business and also above the basic rules of law and accounting. Have the students
consider Betty Vinson – she was not looking at the risk in just entering the numbers because she thought
she was saving her job, a position she needed as the breadwinner. A simple credo – I would never
submit false information for company reports, data processing, or financial disclosures.