CASE STUDY 20 TYCO

Tyco Case Study Student Name: Course: Instructor: Institution: Date Due: Tyco Case Study The issues at Tyco emanate from fact that the top executives such as the CFOs, CEOs and the board of directors did not have direct oversight to enable them to make loans, forgive loans and broker deals while at the same time they didn’t check and confirm the legality of illegality what was happening. CFO Mark Swartz and CEO Dennis Kozlowski both failed to disclose that they had received from Tyco millions of dollars of interest-free and low interest loans. This unethical behaviour by the executives eventually resulted in writing off of shareholders benefits as well as the company going in heavy debt. This makes it evident that prior to hiring management employees the need to evaluate their character is very important since character is a lot different than reputations. This is because the character of top level executives tells people what exactly you are like. Greed for power and money was the main cause of the issues at Tyco. This is because Kozlowski would have just appropriately paid the due taxes which could have saved the company from crisis. Many companies usually have guideline for ethical conduct among employees, but it is of no good if there is no implementation of checks or balances to ensure the company leadership is responsible towards making sure these values are adhered to. This was contrary at Tyco where there was gross deviation from ethical conduct. 1. What do you think Kozlowski motivation for trying to avoid sales taxes on his art purchases was? His motivation was mainly greed and power. He really knew well that being at the helm of the company no one would dare question his wrong-doings or position. Loyalty or real accountability was also not present at Tyco. He realized that purchasing the artwork using Tyco funds by falsifying records, he would evade paying taxes using his own money thereby t...