Toe the Line: No More WorldComs

Article

Faltin, Donna M.; Faltin, Frederick   (2003, ASQ)   Faltin Group, Ballston Spa, NY

Quality Progress    Vol. 36    No. 1
QICID: 18826    January 2003    pp. 29-35

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Article Abstract

[This abstract is based on the authors' abstract.]
Scandals surrounding the mismanagement of WorldCom and other major companies prompted both public and private entities to enact systematic changes to encourage greater openness and accuracy in financial management. While helpful, these changes rely on deterrence as a tool and on financial metrics that don't reflect actual corporate performance. What is needed is a business culture that offers greater assurances to investors and other stakeholders, and to management. Augmented with methods from economics, finance, and operations management, Six Sigma's define, measure, analyze, design, and verify (DMADV) paradigm provides a uniform and disciplined framework for reliably tracking business results. Key points of the approach are illustrated with reference to the WorldCom bankruptcy. A sidebar article describes how management dashboards can enhance the effectiveness of financial monitoring through Six Sigma.

Keywords

Case study, Corrective action, Economics, Financial industry, Lessons learned, Business results, Organizational design, Quality tools, Six Sigma, Standards and specifications, Verification, Metrics


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