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Avow or Avoid?: The Public Communication Strategies of Enron and WorldCom
Unformatted Document Text:  Avow or Avoid? 15 Enron’s legal tactics, which were not evident in the news releases, appear in the coverage. The Economist noted that “transparency was never Enron’s strong suit” (Bankrupt, Nov. 29, 2001, para. 8). The New York Times also revealed Lay’s stonewalling. In an interview that pre-dated Enron’s troubles, Lay dismissed questions about information in the company’s annual report, saying “I just can’t help you on that,” and “You’re getting way over my head” (Enron stock downgraded, Nov. 29, 2001, para. 5). Nor was Lay available for comment on the day Enron declared bankruptcy. The company also did not communicate with its employees. Platt’s Petrochemical Report and the New York Times reported that employees were angered by the lack of communication from upper management (Norman, Saville, DiNardo et al., Nov. 30, 2001; Oppel & Atlas, Dec. 4, 2001). WorldCom Announcement of restatement of earnings On July 25, 2002, WorldCom announced its intention to restate financial statements for all of 2001 and the first half of 2002. The announcement was made in a press release (WorldCom Announces, June 25, 2002). The press release was followed by an open letter to President George W. Bush (WorldCom President, June 28, 2002) in response to Bush’s biting critique of WorldCom during a global economic conference in Canada. WorldCom’s organizational rhetoric employed a mix of legal and public relations tactics. Employing traditional public relations tactics WorldCom claimed self-disclosure and rapid response. “The company promptly notified its recently engaged external auditors” (WorldCom Announces, June 25, 2002, para. 2). It announced remedies such as reviewing policies, selling non-core businesses, and retaining former SEC Enforcement Chief William R. McLucas to conduct an independent investigation (WorldCom Announces, June 25, 2002; WorldCom President, June 28, 2002).

Authors: Reber, Bryan. and Gower, Karla.
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Avow or Avoid?
15
Enron’s legal tactics, which were not evident in the news releases, appear in the
coverage. The Economist noted that “transparency was never Enron’s strong suit” (Bankrupt,
Nov. 29, 2001, para. 8). The New York Times also revealed Lay’s stonewalling. In an interview
that pre-dated Enron’s troubles, Lay dismissed questions about information in the company’s
annual report, saying “I just can’t help you on that,” and “You’re getting way over my head”
(Enron stock downgraded, Nov. 29, 2001, para. 5). Nor was Lay available for comment on the
day Enron declared bankruptcy.
The company also did not communicate with its employees. Platt’s Petrochemical
Report and the New York Times reported that employees were angered by the lack of
communication from upper management (Norman, Saville, DiNardo et al., Nov. 30, 2001; Oppel
& Atlas, Dec. 4, 2001).
WorldCom
Announcement of restatement of earnings
On July 25, 2002, WorldCom announced its intention to restate financial statements for
all of 2001 and the first half of 2002. The announcement was made in a press release
(WorldCom Announces, June 25, 2002). The press release was followed by an open letter to
President George W. Bush (WorldCom President, June 28, 2002) in response to Bush’s biting
critique of WorldCom during a global economic conference in Canada.
WorldCom’s organizational rhetoric employed a mix of legal and public relations tactics.
Employing traditional public relations tactics WorldCom claimed self-disclosure and rapid
response. “The company promptly notified its recently engaged external auditors” (WorldCom
Announces, June 25, 2002, para. 2). It announced remedies such as reviewing policies, selling
non-core businesses, and retaining former SEC Enforcement Chief William R. McLucas to
conduct an independent investigation (WorldCom Announces, June 25, 2002; WorldCom
President, June 28, 2002).


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