Paper Assignment

MBA 507, Ethics in Management, Spring 2019

The paper is an analysis of the case "Accounting Fraud at WorldCom" (the case is included in the Course pack - we will discuss this case in class on April 3, the same day the paper is due).

Evaluation of Paper: Good performance on this assignment consists of systematically and thoroughly applying relevant concepts and methods from the course to the case. When you introduce a concept, please explain what it means and how it applies to the case (make sure it is clear that you know what the concept means and why it is relevant). Please explain the concepts in your words, not mine (from slides).

Apply concepts from class! I strongly recommend that you do not consult outside readings on the topic. This is not a research paper. It is more like a take home "open-book" essay in which you are allowed to consult all class materials (my lecture slides, the assigned articles/cases). Everything you need to write a perfect paper is contained in the case itself and the content that we have covered in the course.

Reading outside articles and books on the topic of the WorldCom scandal will likely hurt you more than it helps. You will likely read other people's opinions and analysis regarding what happened and why it happened. This analysis will likely apply concepts that we have not covered. These concepts will probably not help you write your paper. Your assignment is not simply to analyze the case; it is to use concepts from this course to analyze the case. You will be graded on how well you explain and apply concepts from class. If your paper is based heavily on other people's analysis of the situation, you will likely fail to adequately cover concepts of class and will likely introduce foreign concepts that are not meant to be part of this assignment.

The paper is due by 5:30pm on April 3, 2019. Please submit the paper (as a Word doc) on the Blackboard website for the course. The paper should be 12-pt font, 1-inch margins, double-spaced.

Penalties for late submission: Because we are discussing the case in class on April 3, it is critical that you submit your paper on time (before class starts that day). It is not a good strategy to wait until after class discussion that day to turn in your paper. To discourage this approach, late papers will be penalized as follows. A paper submitted on April 3 but after 5:30pm will be penalized 3 points (out of the 100 total). Papers submitted on April 4 will be penalized 5 points, papers submitted on April 5 will be penalized 7 points, and so on (with each additional day late adding 2 points to the penalty). A separate document (called "schedule of late penalties") that lists the penalty associated with each possible date of submission will be posted on blackboard.

Academic Dishonesty: You will submit your assignment through SafeAssign on blackboard. Additionally, I have a database of every paper ever submitted in the class to compare for similarities. If your paper duplicatesin whole or in partany previously submitted paper, it will be considered plagiarism and referred to the AcademicJudiciary.

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Organize your paper as follows, with these section headings:

I. Normative Analysis (length: minimum 500 words): In this section, use concepts from class to evaluate the behavior you read about in the case. This includes the accounting fraud and other behavior that is described. Do not explain why people did what they did (that is the point of the next section). Instead, judge the behavior from a moral and ethical standpointWhat is ethically wrong? Did they violate any ethical standards or obligations?

Do not try to be comprehensive and evaluate everything that happened and every person involved. Divide your analysis into the following parts.

a. Stakeholder Analysis: Identify the key stakeholder groups of WorldCom that were impacted by the accounting fraud. You should not analyze each person in the case. I am more interested in the broad categories/groups of people that constitute stakeholders. Analyze the fraud from each stakeholder group's perspective. Were they harmed and if so, how? Were their rights violated?

b. Corporate Social Responsibility: In the previous section, you explained the impact on various stakeholder groups. Do you think a company has an ethical responsibility to take these various consequences (for non-shareholders) into account? What is corporate social responsibility? Explain the John Mackey/Milton Friedman debate on this topic and take a side (whose approach do you favor and why?). How well did WorldCom uphold the principles of corporate social responsibility?

c. Fiduciary Duty: The case describes the behavior of key figures at WorldCom and their outside auditing firm, Arthur Andersen. Based on what you learned in the case, did anyone violate his or her fiduciary duties? Explain fiduciary duty (and its main types) and apply these concepts to the case. You do not need to go through each person and explain why he/she did (or did not) violate his/her fiduciary duty. Instead, find the clearest examples that allow you to thoroughly apply the concept.

II. Causal Analysis (length: minimum 500 words): In this section your job, you should use concepts from class to explain why things happened the way they did. Specifically, pick 3 concepts from the list below. Explain each concept then explain why it is relevant to the situation (i.e., how it might explain why people behaved the way they did)

core values, core purpose, normative social influence, informational social influence, ambiguity, attachment, and approval, escalation/slippery slope, ethical fading, motivated blindness, discounting of long-term consequences, overconfidence bias, conflict of interest, confirmation bias, moral foundations (e.g., concerns about harm, fairness, loyalty, and respect for authority - each foundation counts as a separate concept), corporate governance, deference to authority, familiarity, moral disengagement, the foot-in-the-door technique.

*Note: This list is meant to be comprehensive. If there is a concept from class that you think is relevant to the situation but it does not appear in this list, email the instructor for approval to analyze that concept.

III. Recommendations (length: minimum 500 words): If a large company hired you as a consultant and asked for your advice for how to avoid the problems of WorldCom, what would you tell them? Base your advice on concepts from class. How could you apply concepts from class to prevent situations like this from arising? More generally, how could you change the rules, norms, or other aspects of the environment so that the organization was less prone to this sort of ethical problem in the future?

These recommendations should follow directly from the causal factors you identified in the previous section. For example, if your causal analysis focused on how factors X, Y, and Z were the primary reasons for the accounting fraud, you should suggest ways that the company could be changed to lessen (or eliminate) the influence of factors X, Y, and Z. Be concrete! If you think some aspect of the company can be improved, explain the specific, concrete steps you will take to change it. It is not enough to say, for example, "You should make the corporate culture better." How exactly would you make it better? And why will your plan work? How would your plan address the needs/rights of key stakeholders?

Formatting Guidelines

Title Page: Your paper should have a title page that includes the title, your name, class information, and date of the paper.

Introduction and Conclusion: In addition to the 3 primary sections, your paper should have a brief (i.e., 1 paragraph) introduction and a brief (i.e., 1 paragraph) conclusion.

Reference Section: When you reference an article (e.g., an article that we read for class), please include an in-text citation and add it to a reference section. Use APA style for the reference section and in-text citations. You do no need to repeatedly cite the WorldCom case itself. Only cite the case when you are directly quoting from the case or when you are referring to a specific concrete detail (e.g., a financial figure).

Citing Lecture/Slides: You may find yourself referring directly to lecture or lecture slides. If you do so, you should explain the concepts in your own words, not mine. Also, if you quote anything word-for-word from the slides (which I don't recommend because you should be explaining the concepts in your own words), you must put it in quotation marks. To cite lecture slides in the following way:

In-text citation:insert a parenthetical citation that says "Sherman" and the date of class. For example: (Sherman, February 4)

Reference section:

In the references section, add a full reference for the lecture. You can use the title from the first slide of the powerpoint. For example:

Sherman, G. (February 4, 2019). Foundations: Moral Philosophy and Psychology. Lecture Slides.

Total Length: Each section has a specified word minimum (see above). Please be sure to at least hit the minimum length for each section.