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WorldCom Case Study1
By Dennis Moberg (Santa Clara University) and Edward Romar (University of Massachusetts-Boston)
(The original of this document can be found at the Santa http://www.scu.edu/ethics/dialogue/candc/cases/worldcom.html#one. Clara University website at

An update for this case is available at http://www.scu.edu/ethics/dialogue/candc/cases/worldcomupdate.html . Note that this update is not part of the syllabus for the PRM or Associate PRM exam. It is included for reference and explanation only.)

2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of WorldCom not only broke but with a personal net worth as a negative nine-digit number.2 No palace in a gated community, no stable of racehorses or multi-million dollar yacht to show for the telecommunications giant he created; only debts and red ink--results some consider inevitable given his unflagging enthusiasm and entrepreneurial flair. There is no question that he did some pretty bad stuff, but he really wasn't like the corporate villains of his day: Andy Fastow of Enron, Dennis Koslowski of Tyco, or Gary Winnick of Global Crossing.3 Personally, Bernie is a hard guy not to like. In 1998 when Bernie was in the midst of acquiring the telecommunications firm MCI, Reverend Jesse Jackson, speaking at an all-black college near WorldCom's Mississippi headquarters, asked how Ebbers could afford $35 billion for MCI but hadn't donated funds to local black students. Businessman LeRoy Walker Jr., was in the audience at Jackson's speech, and afterwards set him straight. Ebbers had given over $1 million plus loads of information technology to that black college. "Bernie Ebbers," Walker reportedly told Jackson, "is my mentor."4 Rev. Jackson was won over, but who wouldn't be by this erstwhile milkman and bar bouncer who serves meals to the homeless at Frank's Famous Biscuits in downtown Jackson, Mississippi, and wears jeans, cowboy boots, and a funky turquoise watch to work. It was 1983 in a coffee shop in Hattiesburg, Mississippi that Mr. Ebbers first helped create the business concept that would become WorldCom. "Who could have thought that a small business in itty bitty Mississippi would one day rival AT&T?" asked an editorial in Jackson, Mississippi's Clarion-Ledger newspaper.5 Bernie's fall-and the company's-was abrupt. In June 1999 with WorldCom's shares trading at $64, he was a billionaire,6 and WorldCom was the darling of the New Economy. By early May of 2002, Ebbers resigned his post as CEO, declaring that he was "1,000 percent convinced in my heart that this is a temporary thing."7 Two months later, in spite of Bernie's unflagging optimism, WorldCom declared itself the largest bankruptcy in American history.8 This case describes three major issues in the fall of WorldCom: the corporate strategy of growth through acquisition, the use of loans to senior executives, and threats to corporate governance created by chumminess and lack of arm's-length dealing. The case concludes with a brief description of the hero of the case-whistle blower Cynthia Cooper. The Growth through Acquisition Merry-Go-Round From its humble beginnings as an obscure long distance telephone company WorldCom, through the execution of an aggressive acquisition strategy, evolved into
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the second-largest long distance telephone company in the United States and one of the largest companies handling worldwide Internet data traffic.9 According to the WorldCom Web site, at its high point, the company
• • • • •

Provided mission-critical communications services for tens of thousands of businesses around the world Carried more international voice traffic than any other company Carried a significant amount of the world's Internet traffic Owned and operated a global IP (Internet Protocol) backbone that provided connectivity in more than 2,600 cities and in more than 100 countries Owned and operated 75 data centers on five continents. [Data centers provide hosting and allocation services to businesses for their mission-critical business computer applications.]10

WorldCom achieved its position as a significant player in the telecommunications industry through the successful completion of 65 acquisitions.11 Between 1991 and 1997, WorldCom spent almost $60 billion in the acquisition of many of these companies and accumulated $41 billion in debt.12 Two of these acquisitions were particularly significant. The MFS Communications acquisition enabled WorldCom to obtain UUNet, a major supplier of Internet services to business, and MCI Communications gave WorldCom one of the largest providers of business and consumer telephone service. By 1997, WorldCom's stock had risen from pennies per share to over $60 a share.13 Through what appeared to be a prescient and successful business strategy at the height of the Internet boom, WorldCom became a darling of Wall Street. In the heady days of the technology bubble Wall Street took notice of WorldCom and its then visionary CEO, Bernie Ebbers. This was a company "on the move," and Wall Street investment banks, analysts and brokers began to discover WorldCom's value and make "strong buy recommendations" to investors. As this process began to unfold, the analysts' recommendations, coupled with the continued rise of the stock market, made WorldCom stock desirable, and the market's view of the stock was that it could only go up. As the stock value went up, it was easier for WorldCom to use stock as the vehicle to continue to purchase additional companies. The acquisition of MFS Communications and MCI Communications were, perhaps, the most significant in the long list of WorldCom acquisitions. With the acquisition of MFS Communications and its UUNet unit, "WorldCom (s)uddenly had an investment story to offer about the value of combining long distance, local service and data communications."14 In late 1997, British Telecommunications Corporation made a $19 billion bid for MCI. Very quickly, Ebbers made a counter offer of $30 billion in WorldCom stock. In addition, Ebbers agreed to assume $5 billion in MCI debt, making the deal $35 billion or 1.8 times the value of the British Telecom offer. MCI took WorldCom's offer making WorldCom a truly significant global telecommunications company.15 All this would be just another story of a successful growth strategy if it weren't for one significant business reality--mergers and acquisitions, especially large ones, present significant managerial challenges in at least two areas. First, management must deal with the challenge of integrating new and old organizations into a single smoothly functioning business. This is a time-consuming process that involves thoughtful planning and considerable senior managerial attention if the acquisition process is to increase the value of the firm to both shareholders and stakeholders. With 65 acquisitions in six years and several of them large ones, WorldCom management had a
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great deal on their plate. The second challenge is the requirement to account for the financial aspects of the acquisition. The complete financial integration of the acquired company must be accomplished, including an accounting of assets, debts, good will and a host of other financially important factors. This must be accomplished through the application of generally accepted accounting practices (GAAP). WorldCom's efforts to integrate MCI illustrate several areas senior management did not address well. In the first place, Ebbers appeared to be an indifferent executive who "paid scant attention to the details of operations."16; For example, customer service deteriorated. One business customer's service was discontinued incorrectly, and when the customer contacted customer service, he was told he was not a customer. Ultimately, the WorldCom representative told him that if he was a customer, he had called the wrong office because the office he called only handled MCI accounts.17 This poor customer stumbled "across a problem stemming from WorldCom's acquisition binge: For all its talent in buying competitors, the company was not up to the task of merging them. Dozens of conflicting computer systems remained, local systems were repetitive and failed to work together properly, and billing systems were not coordinated."18 Poor integration of acquired companies also resulted in numerous organizational problems. Among them were:
• • •

Senior management made little effort to develop a cooperative mindset among the various units of WorldCom. Inter-unit struggles were allowed to undermine the development of a unified service delivery network. WorldCom closed three important MCI technical service centers that contributed to network maintenance only to open twelve different centers that, in the words of one engineer, were duplicate and inefficient. Competitive local exchange carriers (Clercs) were another managerial nightmare. WorldCom purchased a large number of these to provide local service. According to one executive, "the WorldCom model was a vast wasteland of Clercs, and all capacity was expensive and very underutilized. There was far too much redundancy, and we paid far too much to get it."19



Regarding financial reporting, WorldCom used a liberal interpretation of accounting rules when preparing financial statements. In an effort to make it appear that profits were increasing, WorldCom would write down in one quarter millions of dollars in assets it acquired while, at the same time, it "included in this charge against earnings the cost of company expenses expected in the future. The result was bigger losses in the current quarter but smaller ones in future quarters, so that its profit picture would seem to be improving."20 The acquisition of MCI gave WorldCom another accounting opportunity. While reducing the book value of some MCI assets by several billion dollars, the company increased the value of "good will," that is, intangible assets-a brand name, for example-by the same amount. This enabled WorldCom each year to charge a smaller amount against earnings by spreading these large expenses over decades rather than years. The net result was WorldCom's ability to cut annual expenses, acknowledge all MCI revenue and boost profits from the acquisition. WorldCom managers also tweaked their assumptions about accounts receivables, the amount of money customers owe the company. For a considerable time period, management chose to ignore credit department lists of customers who had not paid their bills and were unlikely to do so. In this area, managerial assumptions play two
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important roles in receivables accounting. In the first place, they contribute to the amount of funds reserved to cover bad debts. The lower the assumption of noncollectable bills, the smaller the reserve fund required. The result is higher earnings. Secondly, if a company sells receivables to a third party, which WorldCom did, then the assumptions contribute to the amount or receivables available for sale.21 So long as there were acquisition targets available, the merry-go-round kept turning, and WorldCom could continue these practices. The stock price was high, and accounting practices allowed the company to maximize the financial advantages of the acquisitions while minimizing the negative aspects. WorldCom and Wall Street could ignore the consolidation issues because the new acquisitions allowed management to focus on the behavior so welcome by everyone, the continued rise in the share price. All this was put in jeopardy when, in 2000, the government refused to allow WorldCom's acquisition of Sprint. The denial stopped the carousel, put an end to WorldCom's acquisition-without-consolidation strategy and left management a stark choice between focusing on creating value from the previous acquisitions with the possible loss of share value or trying to find other creative ways to sustain and increase the share price. In July 2002, WorldCom filed for bankruptcy protection after several disclosures regarding accounting irregularities. Among them was the admission of improperly accounting for operating expenses as capital expenses in violation of generally accepted accounting practices (GAAP). WorldCom has admitted to a $9 billion adjustment for the period from 1999 thorough the first quarter of 2002. Sweetheart Loans To Senior Executives Bernie Ebbers' passion for his corporate creation loaded him up on common stock. Through generous stock options and purchases, Ebbers' WorldCom holdings grew and grew, and he typically financed these purchases with his existing holdings as collateral. This was not a problem until the value of WorldCom stock declined, and Bernie faced margin calls (a demand to put up more collateral for outstanding loans) on some of his purchases. At that point he faced a difficult dilemma. Because his personal assets were insufficient to meet the call, he could either sell some of his common shares to finance the margin calls or request a loan from the company to cover the calls. Yet, when the board learned of his problem, it refused to let him sell his shares on the grounds that it would depress the stock price and signal a lack of confidence about WorldCom's future.22 Had he pressed the matter and sold his stock, he would have escaped the bankruptcy financially whole, but Ebbers honestly thought WorldCom would recover. Thus, it was enthusiasm and not greed that trapped Mr. Ebbers. The executives associated with other corporate scandals sold at the top. In fact, other WorldCom executives did much, much better than Ebbers did.23 Bernie borrowed against his stock. That course of action makes sense if you believe the stock will go up, but it's the road to ruin if the stock goes down. Unlike the others, he intended to make himself rich taking the rest of the shareholders with him. In his entire career, Mr. Ebbers sold company shares only half a dozen times. Detractors may find him irascible and arrogant, but defenders describe him as a principled man.24 The policy of boards of directors authorizing loans for senior executives raises eyebrows. The sheer magnitude of the loans to Ebbers was breathtaking. 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.25 Beyond that, some question whether such loans are ethical. "A large loan to a senior executive epitomizes concerns
WorldCom Case Study 4

about conflict of interest and breach of fiduciary duty," said former SEC enforcement official Seth Taube.26 Nevertheless, 27percent of major publicly traded companies had loans outstanding for executive officers in 2000 up from 17percent in 1998 (most commonly for stock purchase but also home buying and relocation). Moreover, there is the claim that executive loans are commonly sweetheart deals involving interest rates that constitute a poor return on company assets. WorldCom charged Ebbers slightly more than 2percent interest, a rate considerably below that available to "average" borrowers and also below the company's marginal rate of return. Considering such factors, one compensation analyst claims that such lending "should not be part of the general pay scheme of perks for executives. I just think it's the wrong thing to do."27 What's a Nod or Wink Among Friends? In the autumn of 1998, Securities and Exchange Commission Chairman Arthur Levitt Jr. uttered the prescient criticism, "Auditors and analysts are participants in a game of nods and winks."28 It should come as no surprise that it was Arthur Andersen that endorsed many of the accounting irregularities that contributed to WorldCom's demise.29 Beyond that, however, were a host of incredibly chummy relationships between WorldCom's management and Wall Street analysts. Since the Glass-Steagall Act was repealed in 1999, financial institutions have been free to offer an almost limitless range of financial services to their commercial and investment clients. Citigroup, the result of the merger of Citibank and Travelers Insurance Company, which owned the investment bank and brokerage firm Solomon Smith Barney, was an early beneficiary of investment deregulation. Citibank regularly dispensed cheap loans and lines of credit as a means of attracting and rewarding corporate clients for highly lucrative work in mergers and acquisitions. Since WorldCom was so active in that mode, their senior managers were the targets of a great deal of influence peddling by their banker, Citibank. For example, Travelers Insurance, a Citigroup unit, lent $134 million to a timber company Bernie Ebbers was heavily invested in. Eight months later, WorldCom chose Salomon Smith Barney, Citigroup's brokerage unit, to be the lead underwriter of $5 billion of its bond issue.30 But the entanglements went both ways. Since the loan to Ebbers was collateralized by his equity holdings, Citigroup had reason to prop up WorldCom stock. And no one was better at that than Jack Grubman, Salomon Smith Barney's telecommunication analyst. Grubman first met Bernie Ebbers in the early 1990s when he was heading up the precursor to WorldCom, LDDS Communications. The two hit it off socially, and Grubman started hyping the company. Investors were handsomely rewarded for following Grubman's buy recommendations until stock reached its high, and Grubman rose financially and by reputation. In fact, Institutional Investing magazine gave Jack a Number 1 ranking in 1999,31 and Business Week labeled him "one of the most powerful players on Wall Street.32 The investor community has always been ambivalent about the relationship between analysts and the companies they analyze. As long as analyst recommendations are correct, close relations have a positive insider quality, but when their recommendations turn sour, corruption is suspected. Certainly Grubman did everything he could to tout his personal relationship with Bernie Ebbers. He bragged about attending Bernie's wedding in 1999. He attended board meeting at WorldCom's headquarters. Analysts at competing firms were annoyed with this chumminess. While the other analysts strained to glimpse any tidbit of information from the company's conference call, Grubman would monopolize the conversation with comments about "dinner last night."33

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It is not known who picked up the tab for such dinners, but Grubman certainly rewarded executives for their close relationship with him.34 Both Ebbers and WorldCom CFO Scott Sullivan were granted privileged allocations in IPO (Initial Public Offering) auctions. While the Securities and Exchange Commission allows underwriters like Salomon Smith Barney to distribute their allotment of new securities as they see fit among their customers, this sort of favoritism has angered many small investors. Banks defend this practice by contending that providing high-net-worth individuals with favored access to hot IPOs is just good business.35 Alternatively, they allege that greasing the palms of distinguished investors creates a marketing "buzz" around an IPO, helping deserving small companies trying to go public get the market attention they deserve.36 For the record, Mr. Ebbers personally made $11 million in trading profits over a four-year period on shares from initial public offerings he received from Salomon Smith Barney.37 In contrast, Mr. Sullivan lost $13,000 from IPOs, indicating that they were apparently not "sure things."38 There is little question but that friendly relations between Grubman and WorldCom helped investors from 1995 to 1999. Many trusted Grubman's insider status and followed his rosy recommendations to financial success. In a 2000 profile in Business Week, he seemed to mock the ethical norm against conflict of interest: "What used to be a conflict is now a synergy," he said at the time. "Someone like me would have been looked at disdainfully by the buy side 15 years ago. Now they know that I'm in the flow of what's going on."39 Yet, when the stock started cratering later that year, Grubman's enthusiasm for WorldCom persisted. Indeed, he maintained the highest rating on WorldCom until March 18, 2002, when he finally raised its risk rating. At that time, the stock had fallen almost 90 percent from its high two years before. Grubman's mea culpa to clients on April 22 read, "In retrospect the depth and length of the decline in enterprise spending has been stronger and more damaging to WorldCom than we even anticipated."40 An official statement from Salomon Smith Barney two weeks later seemed to contradict the notion that Grubman's analysis was conflicted: "Mr. Grubman was not alone in his enthusiasm for the future prospects of the company. His coverage was based purely on information yielded during his analysis and was not based on personal relationships."41 Right. On August 15, 2002, Jack Grubman resigned from Salomon where he had made as much as $20 million/year. His resignation letter read in part, "I understand the disappointment and anger felt by investors as a result of [the company's] collapse, I am nevertheless proud of the work I and the analysts who work with me did."42 On December 19, 2002, Jack Grubman was fined $15 million and was banned from securities transactions for life by the Securities and Exchange Commission for such conflicts of interest. The media vilification that accompanies one's fall from power unearthed one interesting detail about Grubman's character-he repeated lied about his personal background. A graduate of Boston University, Mr. Grubman claimed a degree from MIT. Moreover, he claimed to have grown up in colorful South Boston, while his roots were actually in Boston's comparatively bland Oxford Circle neighborhood.43 What makes a person fib about his personal history is an open question. As it turns out, this is probably the least of Jack Grubman's present worries. New York State Controller H. Carl McCall sued Citicorp, Arthur Andersen, Jack Grubman, and others for conflict of interest. According to Mr. McCall, "This is another case of corporate coziness costing investors billions of dollars and raising troubling questions about the integrity of the information investors receive."44

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The Hero of the Case No integrity questions can be raised about Cynthia Cooper whose careful detective work as an internal auditor at WorldCom exposed some of the accounting irregularities apparently intended to deceive investors. Originally assigned responsibilities in operational auditing, Cynthia and her colleagues grew suspicious of a number of peculiar financial transactions and went outside their assigned responsibilities to investigate. What they found was a series of clever manipulations intended to bury almost $4 billion in misallocated expenses and phony accounting entries.45 A native of Clinton, Mississippi, where WorldCom's headquarters was located, Ms. Cooper conducted her detective work was in secret, often late at night to avoid suspicion. The thing that first aroused her curiosity came in March 2002 when a senior line manager complained to her that her boss, CFO Scott Sullivan, had usurped a $400 million reserve account he had set aside as a hedge against anticipated revenue losses. That didn't seem kosher, so Cooper inquired of WorldCom's accounting firm, Arthur Andersen. They brushed her off, and Ms. Cooper decided to press the matter with the board's audit committee. That put her in direct conflict with her boss, Sullivan, who ultimately backed down. The next day, however, he warned her to stay out of such matters. Undeterred and emboldened by the knowledge that Andersen had been discredited by the Enron case and that the SEC was investigating WorldCom, Cynthia decided to continue her investigation. Along the way, she learned of a WorldCom financial analyst who was fired a year earlier for failing to go along with accounting chicanery.46 Ultimately, she and her team uncovered a $2 billion accounting entry for capital expenditures that had never been authorized. It appeared that the company was attempting to represent operating costs as capital expenditures in order to make the company look more profitable. To gather further evidence, Cynthia's team began an unauthorized search through WorldCom's computerized accounting information system. What they found was evidence that fraud was being committed. When Sullivan heard of the ongoing audit, he asked Cooper to delay her work until the third quarter. She bravely declined. She went to the board's audit committee and in June, Scott Sullivan and two others were terminated. What Ms. Cooper had discovered was the largest accounting fraud in U.S. history.47 As single-minded as Cynthia Cooper appeared during this entire affair, it was an incredibly trying ordeal. Her parents and friends noticed that she was under considerable stress and was losing weight. According to the Wall Street Journal, she and her colleagues worried "that their findings would be devastating to the company [and] whether their revelations would result in layoffs and obsessed about whether they were jumping to unwarranted conclusions that their colleagues at WorldCom were committing fraud. Plus, they feared that they would somehow end up being blamed for the mess."48 It is unclear at this writing whether Bernie Ebbers will be held responsible for the accounting irregularities that brought down his second in command. Jack Grubman's final legal fate is also unclear. While the ethical quality of enthusiasm and sociability are debatable, the virtue of courage is universally acclaimed, and Cynthia Cooper apparently has it. Thus, it was not surprising that on December 21, 2002, Cynthia Cooper was recognized as one of three "Persons of the Year" by Time magazine. Questions For Discussion 1. What are the ethical considerations involved in a company's decision to loan executives money to cover margin calls on their purchase of shares of company stock?
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2. When well conceived and executed properly, a growth-through-acquisition strategy is an accepted method to grow a business. What went wrong at WorldCom? Is there a need to put in place protections to insure stakeholders benefit from this strategy? If so, what form should these protections take? 3. What are the ethical pros and cons of a banking firm giving their special clients privileged standing in "hot" IPO auctions? 4. Jack Grubman apparently lied in his official biography at Salomon Smith Barney. Isn't this simply part of the necessary role of marketing yourself? Is it useful to distinguish between "lying" and merely "fudging."? 5. Cynthia Cooper and her colleagues worried about their revelations bringing down the company. Her boss, Scott Sullivan, asked her to delay reporting her findings for one quarter. She and her team did not know for certain whether this additional time period might have given Sullivan time to "save the company" from bankruptcy. Assume that you were a member of Cooper's team and role-play this decision-making situation. Copyright © 2003 by Dennis Moberg, Santa Clara University and Edward Romar, University of Massachusetts‐Boston. Reprinted with permission. This case was made possible by a Hackworth Faculty Research Grant from the Markkula Center for Applied Ethics, Santa Clara University. 2 This is only true if he is liable for the loans he was given by WorldCom. If he avoids those somehow, his net worth may be plus $8.4 million according to the Wall Street Journal (see S. Pulliam & J. Sandberg [2002]. WorldCom Seeks SEC Accord As Report Claims Wider Fraud [November 5], A‐1). 3 Colvin, G. (2002). Bernie Ebbers' Foolish Faith. Fortune, 146, (11 [November 25]), 52. 4 Padgett, T., & Baughn, A. J. (2002). The Rise and Fall of Bernie Ebbers. Time, 159, (19 [May 12]), 56+. 5 Padgett, T., & Baughn, A. J. (2002). The Rise and Fall of Bernie Ebbers. Time, 159, (19 [May 12]), 56+. 6 Young, S., & Solomon, D. (2002). WorldCom Backs Chief Executive For $340 Million. Wall Street Journal (February 8), B‐1. 7 Ibid. 8 Romero, Simon, & Atlas, Rava D. (2002). WorldCom's Collapse: The Overview. New York Times (July 22), A‐1 9 Ibid. 10 WorldCom website, (www.worldcom.com/global/about/facts/). 11 Eichenwald, Kurt (2002). For WorldCom, Acquisitions Were Behind its Rise and Fall, New York Times (August 8), A‐1. 12 Romero & Atlas, op. cit. 13 Browning, E. S. (1997). Is the Praise for WorldCom Too Much? Wall Street Journal (October 8), p. C‐24. All acquisition amounts are taken from this article. 14 Eichenwald, Op. cit., p. A‐3. 15 Ibid. 16 Ibid. 17 Ibid. 18 Ibid. 19 Ibid. 20 Ibid. 21 Ibid., p. A‐5; Sender, Henry (2002), Inside the WorldCom Numbers Factory, Wall Street Journal (August 21), C‐1. 22 Solomon, D., & Blumenstein, R. (2002). Telecom: Mississippi blues: Loans Proved to be Ebber's Downfall. Wall Street Journal (May 1), A‐8. 23 According to David Leonhardt of the New York Times (8/25/02, p. 10), Director Francesco Galesi made $31 million, John Sidgmore, the senior manager who replaced Ebbers as CEO, made $25 million, and CFO Scott Sullivan, who many think was responsible for the accounting abuses at World Com, pocketed $23 million. 24 According to David Leonhardt of the New York Times (8/25/02, p. 10), Director Francesco Galesi made $31 million, John Sidgmore, the senior manager who replaced Ebbers as CEO, made $25 million, and CFO Scott Sullivan, who many think was responsible for the accounting abuses at World Com, pocketed $23 million. 25 Solomon, D., & Sandberg, J. (2002). Leading the News. Wall Street Journal (November 6). A‐3. Report that Bernie used 8% of this load for personal use, an uncharacteristically self‐serving move for Mr. Ebbers. 26 Young, S. (2002). Big WorldCom Loan May Have Spurred Inquiry. Wall Street Journal (March 14), A‐3.
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Young, S. (2002). Big WorldCom Loan May Have Spurred Inquiry. Wall Street Journal (March 14), A‐3. Byrne, J. A. (2002). Fall from grace: Joe Berardino Presided Over the Biggest Accounting Scandals Ever and the Demise of a Legendary Firm. Business Week (August 12), 50+. 29 These amounted to over $9 million in overstated income. For an explanation as to how some of this was done, see. Elstrom, P. (2002). How to Hide $3.8 billion in Expenses. Business Week (July 8), 41+. 30 Morgenson, G. (2002). More Clouds Over Citigroup in its Dealings with Ebbers. New York Times (November 3), 1. 31 Smith, R., & Solomon, D. (2002). Heard on the Street. Ebber's Exit Hurts WorldCom's Biggest Fan. Wall Street Journal (May 3), C‐1. 32 Rosenbush, S. (2002). Inside the Telecom Game. Business Week (August 5), p. 34+. 33 Ibid. 34 On December 20, 2002, Jack Grubman was fined $15 million and was banned for securities transactions for life by the Securities and Exchange Commission for such conflicts of interest. 35 Editors. (2002). Citi Defends IPO Allocations to Shamed WorldCom Execs. Euroweek (August 30), 18. 36 Murray, A. (2002). Political Capital: Let Capital Markets, Not Financial Firms, Govern Fate of IPOs. Wall Street Journal (September 10), A‐4 37 Craig, S. (2002). Offerings Were Easy Money for Ebbers. Wall Street Journal (September 3), C‐1. 38 Ibid. 39 Rosenbush, op. cit., 34. 40 Smith, op. cit., C‐1 41 Ibid. 42 Editors. (2002). Salomon's Jack Grubman Resigns. United Press International (August 15), 10082777w0186. 43 Rosenbush, op. cit., 34. 44 Weil, J. (2002). Leading the News: An Ebbers' Firm Got Citigroup loans. Wall Street Journal (October 14), A‐3. 45 Pelliam, S. (2002). Questioning the Books: WorldCom Memos Suggest Plan to Bury Financial Misstatements. Wall Street Journal (July 9), A‐8. 46 Orey, M. (2002). Career Journal: WorldCom‐Inspired 'Whistle‐Blower' Law has Weaknesses. Wall Street Journal (October 1), B‐1. 47 Colvin, G. (2002). Wonder Women of Whistleblowing. Fortune (August 12), 56+. 48 Pelliam, S., & Solomon, D. (2002). Uncooking the Books: How Three Unlikely Sleuths Discovered Fraud at WorldCom. Wall Street Journal (October 30), A‐1.
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...A Case Study by any Other Name Cathy Foster Liberty University   A Case Study by any other Name Researchers have different methods of observing their subjects. Among the most popular is the case study. Case studies are used a lot in psychology and one of the most famous psychologists that used case studies to detail the private lives of his patients was Sigmund Freud. What is a Case Study? “A case study is an observational method that provides a description of an individual” (Cozby & Bates, 2012). During a case study the individual is usually a person however that’s not always the situation. The case study can also be a setting, which can include a school, business, or neighborhood. A naturalistic observational study can sometimes be called a case study and these two studies can overlap (Cozby & Bates, 2012). Researchers report information from the individual or other situation, which is from a “real-life context and is in a truthful and unbiased manner” (Amerson, 2011). What are some Reasons for Using a Case Study Approach? There are different types of case studies. One reason to use a case study is when a researcher needs to explain the life of an individual. When an important historical figure’s life needs explaining this is called psychobiography (Cozby & Bates, 2012). The case study approach help answer the “how”, “what”, and “why” questions (Crowe, 2011). What are Some Advantages and Disadvantages to the Case Study Approach? Some......

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...The Case Study Approach Linda P. Williams Liberty University Online Author Note Linda P. Williams, Department of Psychology, Liberty University Online Correspondence concerning this article should be addressed to Linda P. Williams, Department of Psychology, Liberty University Online, 1971 University Blvd, Lynchburg, VA 24515, E-mail: lwilliams91@liberty.edu The Case Study Approach Introduction At some point during the pursuit of a degree psychology, the time comes when a student must learn various research techniques. One of the many approaches is case study, which this paper will focus on. Areas of discussion include reasons for using a case study, advantages/disadvantages to the approach, and ways acquire information to perform a case study. The essence of a case study A case study is used to offer a mental accounting of a person, school, neighborhood, business, or group of individuals over the course of time, way of research. It is sometimes referred to as naturalistic observation, but does not always follow the same protocol. Mental accounting is done by means of observation of various behavior or mind sets operating in their natural environment. This is noteworthy, especially when participants have a distinct disorder worthy of being studied to further the cause of research and development. Depending on the purpose of the investigation, the case study may present the individual’s history, symptoms, characteristic behaviors, reactions to......

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...Tanglewood Case Study 2 Ratings: (0)|Views: 6|Likes: 0 Published by Megan Purdy Tanglewood Case Study 2 See more Tanglewood Case Study 2 Page 1 Tanglewood Case Study 2Megan PurdyHRM 594Keller Graduate School of Managementr! CardenMay 2"# 2$%4 Tanglewood Case Study 2 Page 2 Recru&tment Gu&dePos&t&on' Store Associate Re(orts To' Shift Leader and Department Manager )ual&f&cat&ons' Prefer to have some ac!ground in customer service or retail" no specific list of minimal educational ac!ground re#uired Rele*ant +a,or Mar-et' Pacific $orthwest% ®on and 'ashington T&mel&ne' This is a continuous recruiting effort with no set timeline% however the ideal process from initial contact with the applicant to the final hiring decision would ideally e within a month(s time) .ct&*&t&es to underta-e to source well /ual&f&ed cand&dates' *se of media" such as regional newspaper advertisements" online +o postings on oth pulic wesites as well as the company wesite" !ios!s in the stores" +o services groups and staffing agencies" Staff Mem,ers 0n*ol*ed' ,- -ecruiting Manager" Assistant Store Manager" Department Manager 1udget' .etween /1000 and /000 Tanglewood Case Study 2 Page  n loo!ing to the est targets or applicants for the position of store associate" it would e ideal to recruit individuals with some prior ac!ground" !nowledge or e3perience in the customer service or retail fields) &ne of the ig complaints from our......

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Case Study

...Case Study Guidelines A case study gives you the opportunity to review Modern Management concepts and apply them to a specific scenario. The analysis should be in summary form and in proper APA format. • With a minimum of 3 full pages and at least 3 academic sources, prepare a summary analysis of the assigned case study. • The first paragraph should identify and summarize the key point(s) or problem(s) presented in the case. • Then type and answer each question posed at the end of the case. • Describe specific principles from the chapter that can be applied to the case study. • Try to relate a personal experience that is pertinent to the case study issues. • You must use at least two additional resources (your text and two others for a total of three) to support your thoughts. Be sure to properly cite your references. • All papers must be submitted as a document through the Assignment Dropbox. Assignments must be prepared in .doc, .docx, or .rtf format. APA Guidelines For the purpose of written case study assignments – all papers must be in proper APA format which includes at least the following: • A properly formatted header on the upper right corner that includes your name and page number. • All papers must be double-spaced, with a Times New Roman, Courier New, or Arial size 12 font. • All paragraphs must be indented 5 spaces. • References must be properly formatted, double-spaced, with the first line of the entry left justified, and following lines of the......

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...Case Study The case study of a 6 year old boy, who brought a gun to school and shot a first grade classmate, then was later found hiding in a corner, has brought multiple psychological issues to the forefront. According to the law a child under the age of 7 is not criminally responsible. The prefrontal cortex of the brain is the area where high-order cognition, planning, goal-directed behavior, impulse control and attention are centered. This portion of the brain is not considered mature until much later in life. The Limbic system of the brain controls and regulates emotion and contains three parts: the amygdala, the hippocampus, and the hypothalamus. According to researchers, the amygdala is the portion of the limbic system that registers emotions, especially fear (LoBiondo-Wood & Haber, 2010, p. 214). According to this fact, high levels of fear and stress negatively affect other areas of the limbic system including the hypothalamus, which is responsible for activating hormones that produce responses from other brain and body parts as well. An overproduction of hormones can cause permanent damage to learning and memory. Perseveration is a tendency to stick to one-thought or action. This, along with impulsiveness is believed to occur in children with still immature prefrontal cortex as well. This is evidenced by temper tantrums, and immature emotional responses to name a few. From a cognitive developmental standpoint, according to Jean Piaget, a 6 year-old is on the...

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...for the achievement of sustained competitive advantage. Your discussion is to be based on three suitable published case studies. This means case studies published in the academic literature – for example, the series of case studies in the textbook or in equivalent textbooks. You may not use Yahoo! as one of the case studies and short articles in newspapers, magazines, website opinion pages and the like are definitely not acceptable, although such materials may be used to supplement the published case study and your analysis. All sources must be properly referenced. If in any doubt about the suitability of a case study, seek an early ruling from your tutor. This is a substantial piece of scholarly work and will require extensive engagement with both unit theory and at least three detailed case studies. Process: 1. Choose your three cases. They all need to be published cases in academic sources (e.g. textbooks, journal articles). It is obviously important that each case represents an instance of a company achieving sustained competitive advantage (check your materials to be clear about what that means). 2. Analyse and locate evidence. Begin to analyse each case in terms of the two questions – particularly question one. It is vital that you respond to both questions, but the evidence for sustained competitive advantage is more likely to be in the case material itself. It is in this part of the process that you might bring in supplemental material from company......

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...Running Head: Case Study 1 Case Study #1 Clinical Psychology: Severe Depression Princess Coles ABS 200 Introductions to Applied Behavioral Sciences Instructor Weniger 08/4/2015 Severe depression is one of the many mental illnesses that affect one out of ten Americans. Severe depression involves, extreme or constant feeling of sadness, loss of interest in activities and even relationships. Those suffering from depression might even struggle with the feeling of worthlessness and repeated thoughts of suicide. Therefore the effects are not only psychological but physical as well. According to Kessler author of Twelve-month and lifetime prevalence and lifetime morbid risk of anxiety and mood disorders in the United States International Journal Of Methods In Psychiatric Research, (3), 169. About 17% of people are likely to experience some kind of depression at some point in their lives. I have chosen this topic of interest because it is important to help those suffering from depression understand that there is help and that with treatment they can lead a more positive way of thinking. Some mental health problems are caused by dysfunctional ‘ways of thinking’-either about self or the world (e.g. in major depression) and many anxiety disorders are characterized by a bias towards processing threatening or anxiety relevant information. Cognitive behavioral therapy is generally perceived as an evidence based and cost effective form of treatment that can...

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...Case Study Complete Case History The patient in this case study reports being ‘sick with flu’ for 8 days. She has been vomiting, and cannot keep any liquids or food down. She also reports that she has been using antacids to help calm the nausea. After fainting at home, she was taken to the local hospital, severely dehydrated. Upon looking at her arterial blood gas result, it would appear that this patient would be suffering from metabolic alkalosis. This patient’s pH is greater than 7.45 (normal: 7.35-7.45) and her bicarbonate (HCO3) is greater than 26 (normal 22-26). Blood gases indicate that case study patient is suffering from hypochloremic metabolic alkalosis. Focused Assessment The case study patient reports being “sick with flu” for eight days. She reports vomiting several times a day and taking more the recommended dose of antacids. She reports that she fainted today at home and came to the hospital. The case study patient reports that this all started approximately eight days ago. The case study patient also reported taking excess amounts of antacids. Ingesting large amounts of this medication can cause metabolic alkalosis. When antacids are taken in large doses, the ions are unable to bind, and therefor the bicarbonate is reabsorbed and causes alkalosis (Lehne, 2013). Renal and Respiratory systems response Hypochloremic Metabolic alkalosis occurs when there is an acid loss due to prolonged vomiting which causes a decrease in the extracellular...

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...Case studies Name: Tutor: Course: Institution: Date: Flying to the Auto Bailout on a Private Jet Basic problems In this case study, there is wastage of resources. The CEOs of the nation's three largest automobiles uses private jets to attend the corporate public relations congress. This is wastage of resources since they are using private jets to travel when their companies are struggling to stay afloat. Ignorance is another basic problem evident in this case study. These CEOs are very ignorant. They attend the corporate public relation congress in Washington unprepared and thus appear to know nothing about their problems. The three companies, GM, Ford and Chrysler, lack the concepts of public relations. The main issues American economy is melting down. Most of the workers are losing their jobs since the companies cannot handle many workers anymore. The companies have got inadequate cash. Bankruptcy is another main issue experienced in this case study. The General Motors Company and the Chrysler can no longer pay their debts. Key decisions * According to the case study, the leaders have to come up with a new public relations strategy. * The CEOs should correct any mistakes they have made before such as using private jets to travel. * Introduce innovation in products * The auto industry of the US should promote its products. * Ensure transparency in business operations. SWOT analysis Strengths * Availability of resources for the......

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...[pic] OPERATIONS MANAGEMENT MGCR 472 CASE STUDY ASSIGNMENT Due on November 23 in class INSTRUCTIONS: 1. Make sure to write down the name, student # and section # for each student in the group on the cover page of the case study report. 2. This assignment counts for 14% of your final grade. 3. Late submissions and submissions by e-mail will not be accepted. 4. You have to work in this assignment in groups. The number of students that can be in a group is 5. Group members can be from different sections taught by other OM professors. Each group should submit only one case study report. Reports can be submitted to any instructor. 5. Good luck! CASE STUDY REPORT In the Delays at Logan Airport case, there are different proposals for reducing congestion. One of the methods proposed to tackle the impact of delays was peak-period pricing, PPP. The other one was to build a new runway. In this case study, your objective is to evaluate these alternatives using waiting line models and to provide a recommendation to FAA to solve the delay problem at Logan Airport. Make sure you demonstrate that you have thought through your recommendations and the effects on other related activities. Also demonstrate that you understand the concepts and tools from the class that apply. Prepare an action-oriented advisory report, which presents concisely your analysis and recommendations for solution of the primary management problems. In order to assist you in......

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...ASSIGNMENT GUIDANCE – NRSG258 ASSESSMENT 1: CASE STUDY Dear students here are some guidelines to assist you in writing Assessment 1: Case Study. If, after reading through these, you still have questions please post on the relevant forum. If you are still unsure then please contact your campus specific lecturer to arrange to discuss your assignment. We ask that you bring these guidelines to any meeting and highlight the areas about which you are still unsure. In this case study you do not need an introduction or conclusion for this case study of 1500 WORDS ± 10% due by midnight 8th April Turnitin. Just answer the questions. Turnitin is located in your campus specific block. Although we suggest you do your background reading in the current textbooks for basic information, the case study also requires you to find current literature/research/articles to support your discussion throughout the case study. Do NOT use Better Health Channel, WedMed, dictionaries, encyclopaedias etc. These are NOT suitable academic sources. If you use these you will not meet the criteria for this question and you will lose marks. You must follow the APA referencing format as directed by ACU in your case study and in your reference list. The Library website has examples of how to do this referencing and you can find the correct format at the end of your lectures and tutorials as well as in the free Student Study Guide. This essay should have approximately 10 relevant sources.......

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