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Tyco Case Study


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Tyco Case Study

  1. 1. TYCO: I’M SURE THAT IT’S A REALLY NICE SHOWER CURTAIN Daniela Caballeros Summer A MAN 4701
  2. 2. ETHICAL ISSUES1. The Fiduciary Principle of the Global Business Standards Codex in the fact that Kozlowski was not being loyal to the company in any way because he used company funds to by property. Paintings and his wifes birthday party.2. The Property Principle was violated because Kozlowski was stealing from the company.3. The Fairness Principle was violated because Kozlowski was getting paid a huge salary even though he was manipulating the companies assets and revenue by spending it. (Stanwick A. &D. )
  3. 3. CASE QUESTIONS1. What do you think Kozlowski’s motivation for trying to avoid sales taxes on his art purchases was? Explain. Kozlowski’s motivation was power and greed. He could get away with anything because he was at the top. There was also no real accountability present or loyalty to Tyco. His mentality was that if he purchased the artwork through Tyco’s name then he would not have to pay taxes and he falsified the records to hid his wrong doings.2. Explain the concept of commingling assets with respect to the Tyco case. Commingling involves treating the company’s money as if it were your own. In this case, the offending executives used Tyco’s business assets for their own personal gain by purchasing artwork, real estate properties, jewelry, and other personal items. They crated problems and gained attention from taxation authorities and SEC and other criminal investigations due to their fraudulent behaviors.
  4. 4. CASE QUESTIONS1. Would it have been possible for the board of directors to see the adjustments taking place in the many different programs at Tyco? Explain. If the board of directors have been more involved then I think maybe they would have caught on that there were fraudulent and unethical activities happening. However, since they were not proactive they were not able to stop the misbehavior from the company’s employees. The board of directors were to be held with as much fault as the culpants. The tax evasion, inflated profits, commingling of assets was illegal and the unauthorized bonuses that they were handing out were not authorized, but they still continued to do it. They also paid off other officials to remain quiet. Overall, the harmful parties knew what they were doing was illegal, unethical, and costly to Tyco. (Stanwick A. &D. )
  5. 5. REFERENCES Stanwick A. &D. ( 2012, June 17) Tyco: I’m sure that it’s a reallynice shower curtain.