Question

When Bernie Ebbers, WorldCom's CEO, was convicted of financial crimes, WorldCom was forced to merge with MCI. One of the ramifications of this merger was the loss of WorldCom's sponsorship of the Sea Pines Heritage PGA golf tournament. The tournament funds the Heritage Foundation, a major community charity. This example illustrates_____________________________.

Answer 1

Answer:

B) that the impact of unethical actions can reach far beyond the corporation.

Explanation:

Due to Bernie's bad actions, not only did WorldCom's shareholders, clients and employees suffered, also an innocent third party suffered. The Heritage Foundation had nothing to do with Bernie (unlucky name for CEOs), but since they received money from the Sea Pines Heritage PGA golf tournament, both the foundation and the tournament will suffer from lower incomes and bad reputation. This can almost be consider a negative externality, since an innocent bystander suffers from the crooked transactions of other parties.