Ebbers Business Ethics

The story of Bernard Ebbers, who from humble beginnings built a huge telecom empire is a lesson to many about the darker sides of leadership. Whilst a vision, tenacity and an ability to lead others on the path to achieve success are laudable qualities, when underpinned by a covert agenda concealed in the cloth of charisma, intent on using people to satisfy an insatiable appetite for success at all costs, Ebbers embraced unethical principles.

Few who met Ebbers in his early days when his entrepreneurial approach and natural charm impressed friends to invest their money in his ideas, would have imagined that his crusade as an industry outsider to challenge the global telecoms industry through over 70 mergers and acquisitions would have ended

Ebbers did not use his influence and leadership style to avoid deviant behavior among the very subordinates he was trying to string along - rather he made unethical behaviour more acceptable. But he was not afraid to use fear when things didn’t go his way. According to Trevino and Brown (2005), a senior executive spoke of a culture where there was no room for error, and that Ebbers once went “on a rampage” becoming “nasty, condescending and arrogant” when targets were missed by a whisker and stock prices plunged.

The behaviour that occurred within WorldCom was driven by the vision, the planning, the actions, and the way results were presented – under Ebbers’ leadership. Fully in control and flanked by like-minded management, Ebbers exuded a total sense of confidence and certainty where success was the only answer. As a result, employees wanted to participate in this exciting reality. They stayed loyal to him and were motivated to work harder to achieve a resounding collective success. There was no cause to believe that things were different from the picture that Ebbers was painting, one which was propping up the share prices, a picture

However, with the manipulation of facts and the inflation of figures behind the share prices that Ebbers was having to keep buoyant to keep the dream alive, it was only a matter of time till the truth came out. The house of cards came tumbling down – and with it those who had deviated from their own principles and willingly falsified to buy into the mirage of success that Ebbers had sold them.

Putting Ebbers, and the lamentable demise of WorldCom aside, research and the performance of great ethical leaders have shown us it is all about encouraging ethical behaviour through a combination of social learning and social exchange processes. In other words, this happens when leaders are role models and seen to act ethically. The effect is magnified when leaders provide a reward system for employees which incentivises employees to act ethically and minimises unethical