Tyco International Company Culture and Ethics

On phratry 12, 2002, Tyco Internationals spring chief executive officer L. Dennis Kozlowski and former chief financial officer Mark H. Swartz have been arrested and charged with interest more than $170 million from the comp both as well as more than $430 million through false sales of Tyco stock and top the information from shareholders. Kozlowski and Swartz were charged with more than thirty counts of wrong doing. Hence, Tyco scandal was peerless of the most notorious of the early 2000s.Consequently, companies need to be alert of any changes in their culture, predominantly with regard to ethical behavior. For example, according to George P. J angiotensin converting enzymes (2003), if sales force-out who aggressively book r as yetue enhancement are consistently rewarded while those who take a more conservative approach are left behind, one may expect to find problems in the partys revenue classifications and related financial figures. Furthermore, merged culture is how a corporation thinks the stage communication channel should be ran.Senior management always has a belief that a firm owed it to its shareholders to get as much profit as realistic forgetting that the companys corporate culture is as important as the profit making. In Tycos case, the CEO, Kozlowki was the mho-highest-paid CEO, but his lack of conservativeness, his aggressive business style and his extravagant way of living, did raise some red flags and indicated that Kozlowski was playing unethically by manipulating the companys financials and using the companys capital unethically. According to Whelan G. 2012), as MULTINATIONAL CORPORATIONS (MNCs) have become more numerous, more powerful, and more variously engaged (Dunning & Lundan, 2008 Roach, 2005 UNCTAD, 2010), and as their global in operation(p) context has changed (Kobrin, 2005 Ruggie, 1982, 2008a), so too have the normative demands commonly make of them. Within the business ethics and business and society literatures for example, the belief that globalization has increase the power of MNCs, and concomitantly decreased the power of states, has informed a body of plow that normatively prescribes, and positively describes and explains, the political duties and activities of MNCs.Tycos stock damage initially drop when Tyco was going to make a bid for Honeywell (subject of General Electrics failed takeover net year). The rumor caused Tycos share price to plummet around 8. 5 pct in the last half hour of trading, and although a company spokesperson denied there was any truth in it immediately after the close, Tyco was in the spotlight it came under very close scrutiny in the long time and weeks that followed (insideinvestorrelations. com). Additionally, the fraud began to unfold when the Securities and Exchange Commission was examining the companys stock price. line of products practices by senior management have raised some red flags and the irregular started an investigation into Tycos practices . Suspicious accounting practices surfaced because Tyco had forgiven a $19 million addword to Kozlowski in 1998 and had paid the CEOs income taxes on the loan. It was so discovered that the companys stock price had been overvalued, and that the CEO and CFO had sold 100 million dollars worth of shares, and then stated to the public that he was holding them, which was a misrepresentation and misled the investors.Kozlowski and Swartz steal approximately $600 million by taking unauthorized pay and bonuses, abusing loan programs and selling their company stock at overstated prices after trickery about Tycos finances. And according to nbcnews. com, often, when these two men were accused of thievery millions of dollars, prosecutors said, the defendants hid their alleged thefts by failing to disclose the bonuses and loan forgivenesses in company prospectuses and federal filings, and bought the silence of underlings with outsized compensation.Both used Tycos money to buy extravagant lifes tyles that featured art, jewelry and real estate, prosecutors said. An example of that expenditure was the gaudy $2 million toga party Kozlowski threw for wife Karens fortieth birthday on the Mediterranean island of Sardinia, they said. Tyco paid about half of the partys cost. Lines Mr. Kozlowski crossed in his tenure as CEO He had Tyco pay for his $30 million New York City apartment which include $6,000 shower curtains and $15,000 dog umbrella stands. He similarly purchased several terra firma in the private gated community, The Sanctuary, in Boca Raton, Florida He was engaged in financial frauds through Loan forgiveness and inappropriate bonus payments. He also lied to the shareholders by overrating the stocks of the company. Kozlowski made Tyco pay $1 million (half of the $2 million bill) for the 40th birthday party of his second wife. The party was held on the Italian island of Sardinia, it included an ice sculpture of Michelangelos David urinating Stolichnaya vodka and a pri vate concert by Jimmy Buffett.The party was announced as a shareholder meeting in order to get corporate funding. CONCLUSION Perhaps one of the most disturbing things of the Tyco scandal was that cryptograph caught the thieves on time, the fraud surfaced when special groups were put in place to particularly stay fraud and protect investors. The SEC was not able to prevent or catch the problem on time, they only caught this once it had already spread widely.Decentralizing corporate structure can make it difficult, even for the board of directors, to effectively monitor a firms dealing and finances. Kozlowskis fall and the repercussions of his dirty dealings (financial penalties and jail time) are also detailed. Finally, an explanation of how Tyco survived the scandal is provided, along with safeguards the company has put into place to insure that similar misconduct does not occur in the future.ReferenceJennings, M. (2012). Business ethics Case studies and selected readings. 7th Ed. Mason, OH South-Western Cengage Learning Whelan, G., 2012. The Political Perspective of merged Social Responsibility A Critical Research Agenda. Retrieved from learners.ncu.edu George P. Jones, May 2003. bodily Culture and Ethical Behavior. Retrieved from http//www.journalofaccountancy.com/Issues/2003/May/CorporateCultureAndEthicalBehavior.htm Insideinvestorrelations.com. Fall of the house of Tyco. Retrieved from http//www.insideinvestorrelations.com/articles/case-studies/16294/fall-house-tyco/ Nbcnews.com. Ex-Tyco CEO Dennis Kozlowski install guilty. Retrieved from http//www.nbcnews.com/id/8258729/ns/business-corporate_scandals/t/ex-tyco-ceo-dennis-kozlowski-found-guilty/.UYa2oKLqnco