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 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. 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 standpoint—What 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?