Bernard Ebbers and His Charismatic Leadership

Bernard Ebbers was successful in showing leadership when he steered his business of purchasing rural motels towards rapidly acquiring and renting bandwidths and networks from telecommunication companies, and became a global telecommunications giant. His charismatic leadership was a full package. He donned cowboy boots and rock star appeal to work. He showed seriousness in corporate takeovers when he drastically cut costs in corporate expenses and employees’ coffee breaks. He hired expert engineers and accountants, adopting economies of scale to reduce unit costs. His employees were kept inspired and motivated by this rapid rise through pushing their stock price to surge up to $75 a share in 1999. Adding to his appeal was his overt display of higher values through espousing hard work, dedication, commitment to principles, Christian values, giving back to the community by teaching in Sunday school, serving meals to the needy, and living modestly. These positive traits eventually revealed however that he was a “hypocritical leader (high on the communication of an ethics agenda but not perceived to be a strong moral person)” (Treviño, 2005).

The single-minded, courageous visionary was also a stubborn and reckless leader, especially whenever WorldCom stock price would go down. He pushed his people to keep the stock prices level up, no matter what, by using either his charisma or his displeasure. He also kept his key people close to him and his dreams untouched by generously offering loans for company stock purchases, and treating employees from acquired companies as outsiders. They were making purchases through loans like a shopaholic with a credit card. This style of leadership wherein he pushed and cajoled his subordinates to keep stock prices high resulted to an accounting fraud that was discovered in WorldCom’s financial records from 2001 to 2002. Could this deviant behaviour have been avoided? Perhaps so if he used his influence and leadership in controlling everyone to keep to regulations. Not only would they be operating within the law, fair and square, they could have even have been challenged to seek other means of gaining profits aside from mergers and acquisitions, and to professionalize management as it reined its penchant for making new purchases.

Ebbers’ leadership style was charismatic and pseudo-transformational. His employees would attest to his being able to inspire and motivate them yet was not able to practice moral values. He created an environment that developed into actual fraudulent accounting committed within Worldcom by him and his key people. What his key managers could have done, though it would have taken great risk and sacrifice, was to report to the board of directors any illegal activities they were knowledgeable of. It would seem that the board of directors were not a party to deviant behaviors because they removed Ebbers in 2002 “unceremoniously” ((Treviño, 2005). Thus, the board could have been the proper agent to fiscalize Worldcom internally early on. What Ebbers failed to do was to be an ethical model who could have practiced the Christian values he espoused including honesty and uprightness, could have clearly rewarded ethical behaviors, disciplined unethical ones, and treated his subordinates with care, concern, and fairness to create social exchange relationships that nurture trust even if stock prices would go down.

Unfortunately, his behavior seemed that he was more at the preconventional level wherein he would sidestep on regulations so as to be rewarded of profits. His charismatic nature encouraged deviant behavior in gaining trust and loyalty. However, these same characteristics also kept others from correcting him at an early stage where he and WorldCorm key people could have had the chance to steer the corporate culture towards ethical ways of making profits.