Mci Inc. and Long Distance Essay

Submitted By Jebastian1989
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The entire telecommunications industry was opened up through the 1983 break-up of AT&T. LDDS started as a long distance provider that became more efficient through the concept of larger pipes, providing lower per unit costs under the control of Bernie Ebbers. Ebbers then turned to acquisitions to make LDDS grow. In 1989, the company went public with its merger of Advantage Companies. In 1993, LDDS was recognized as the fourth largest long distance carrier in the US, and in 1995, it became known as WorldCom. When the Telecommunications Act of 1996 allowed companies to provide both long distance and local service, LDDS went after the local market by purchasing MFS Communications, providing them significant internet presence. After their next acquisition of MCI, WorldCom gained power over its competitors. Still going after acquisitions, WorldCom failed to acquire Sprint after being denied by the US government. After flourishing so triumphantly, the telecom industry took significant blows, leading to shady happenings by WorldCom in order to stay on top of the industry. Bernie Ebbers, the leader behind these acquisitions, was the cut-throat CEO of WorldCom. Once acquisitions were no longer an option, employees commented that Ebbers seemed lost. However, his attitude still remained to stay on top no matter what. He didn’t care how, he just wanted WorldCom to remain where it had been, a difficult task in down times. The culture that had developed under Ebbers was very segmented, with lack of communication and flow. In this culture, employees were directed to do as they were told and to never question their higher ups. There were no opportunities for employees to express concerns and questions about happenings in the company. However, Ebbers was known for providing significant compensation for loyal employees, often times exceeding approved salary and bonus guidelines. Ultimately, the pressure Ebbers put on employees to be number one on Wall Street and continue to increase revenue convinced some employees to forget about their morals. On a personal level, Ebbers actually used WorldCom as collateral to back loans that he was receiving for other endeavors from the banks, a definite misuse and conflict of interest. If the business began to falter, his loans would no longer be secure. CFO Scott Sullivan was determined to keep the finances up to par. Because WorldCom was growing at such a rapid rate, spending had to increase to keep up. WorldCom was incurring expenses, parts to be
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