Baby Boomers & Generation X well remember some of the greatest scandals from the US business history: Enron – accounting fraud, Tyco International – Theft, and MCI WorldCom – Accounting scandal (Wikipedia, 2012). In each of these cases, executive personnel acted in an unethical manner in their business practices. Merriam-Webster defines ethics as, “the discipline dealing with what is good and bad and with moral duty and obligation” (2012). Relating ethics in business or business ethics, Pastan (2006) noted “it is the application of the discipline, principles, and theories of ethics to the organizational context”. Pastan (2006) further noted, Ethical behavior in business is critical. When business firms are charged with infractions, and when employees of those firms come under legal investigation, there is a concern raised about moral behavior in business. Hence, the level of mutual trust, which is the foundation of our free-market economy, is threatened”. One of the cases where a business was charged with such unethical infractions is WorldCom. Scharff (2005) reported, “WorldCom, now named MCI, recently emerged from bankruptcy protection after reporting accounting irregularities of $11 billion”. Scharff (2005) further noted, “On March 2,2004 Bernie Ebbers, WorldCom's ex-Chief Executive Officer, was charged with conspiracy to commit securities fraud, securities fraud, and falsely filing with the sec and on May 24,2004 six additional counts were filed against him. On March 15, 2005 Ebbers was found guilty on all nine counts and faces a maximum penalty of 85 years in prison and an $8.25 million fine”.
WorldCom – Ethical Problems
Moberg & Romar wrote, “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” (2003).
In 1983, a Canadian born basketball...