Tyco International Company Culture and Ethics

On phratry 12, 2002, Tyco Internationals causation chief executive officer L. Dennis Kozlowski and former chief financial officer Mark H. Swartz have been arrested and charged with theft more than than $170 jillion from the comp whatever as well as more than $430 million through false sales of Tyco caudex and cover the information from sh arholders. Kozlowski and Swartz were charged with more than thirty counts of wrong doing. Hence, Tyco poop was unmatched of the most notorious of the early 2000s.Consequently, companies need to be alert of any changes in their culture, p goingominantly with regard to ethical behavior. For role model, according to George P. J whizzs (2003), if sales staff office who aggressively book tax are consistently rewarded while those who gestate a more conservative approach are left behind, one may expect to find problems in the companys revenue classifications and related financial figures. Furthermore, corporate culture is how a corporation th inks the job should be ran.Senior management always has a flavour that a firm owed it to its shareholders to spend a penny as much profit as practical forgetting that the companys corporate culture is as important as the profit making. In Tycos case, the chief executive officer, Kozlowki was the second-highest-paid chief operating officer, but his lack of conservativeness, his aggressive handicraft style and his extravagant way of living, did raise some red flags and indicated that Kozlowski was acting unethically by manipulating the companys financials and using the companys money unethically. According to Whelan G. 2012), as MULTINATIONAL CORPORATIONS (MNCs) have become more numerous, more powerful, and more variously engage (Dunning & Lundan, 2008 Roach, 2005 UNCTAD, 2010), and as their globular operating context has changed (Kobrin, 2005 Ruggie, 1982, 2008a), so too have the normative demands normally made of them. Within the business ethics and business and society literatures for example, the belief that globalization has increased the power of MNCs, and concomitantly decreased the power of states, has informed a dust of work that normatively prescribes, and positively describes and explains, the political duties and activities of MNCs.Tycos stock price ab initio fell when Tyco was going to begin a bid for Honeywell (subject of General Electrics failed coup last year). The rumor caused Tycos share price to plummet around 8. 5 percent in the last half(a) hour of trading, and although a company spokesperson denied there was any truth in it immediately aft(prenominal) the close, Tyco was in the spotlight it came under very close scrutiny in the days and weeks that followed (insideinvestorrelations. com). Additionally, the fraud began to unfold when the Securities and Exchange Commission was examining the companys stock price. chore practices by senior management have raised some red flags and the SEC started an investigation into Tycos pr actices. Suspicious accounting practices surfaced because Tyco had forgiven a $19 million loan to Kozlowski in 1998 and had paid the CEOs income taxes on the loan. It was then discovered that the companys stock price had been overvalued, and that the CEO and CFO had sold 100 million dollars charge of shares, and then stated to the public that he was holding them, which was a magic and misled the investors.Kozlowski and Swartz stole approximately $600 million by taking unauthorized repair and pensiones, abusing loan programs and selling their company stock at overstated prices afterward lying about Tycos finances. And according to nbcnews. com, often, when these two men were charge of stealing 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 li festyles that featured art, jewelry and real estate, prosecutors said. An example of that spending was the gaudy $2 million toga fellowship Kozlowski threw for wife Karens 40th 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 comprise for his $30 million New York City flat tire which included $6,000 shower curtains and $15,000 dog umbrella stands. He also purchased some(prenominal) acres 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 mold of Michelangelos David urinating Stolichnaya vodka and a p rivate c at one timert by Jimmy Buffett.The party was denote as a shareholder meeting in order to get corporate funding. CONCLUSION Perhaps one of the most disturbing things of the Tyco scandal was that nobody caught the thieves on time, the fraud surfaced when special groups were put in purpose to particularly prevent fraud and protect investors. The SEC was not commensurate 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 dealings 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 calculate to ensure that similar misconduct does not occur in the future. authorJennings, M. (2012). Business ethics Case studies and select ed readings. 7th Ed. Mason, OH South-Western Cengage Learning Whelan, G., 2012. The Political emplacement of Corporate Social Responsibility A Critical Research Agenda. Retrieved from learners.ncu.edu George P. Jones, may 2003. Corporate 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 found guilty. Retrieved from http//www.nbcnews.com/id/8258729/ns/business-corporate_scandals/t/ex-tyco-ceo-dennis-kozlowski-found-guilty/.UYa2oKLqnco