Business Ethics

Unit VI Case Study

Read Case Study 20, "Tyco: I'm Sure That It's a Really Nice Shower Curtain." Summarize the overall viewpoint of the author, and discuss the major issues presented in the case. Review the Questions for Thought. Answer these three questions using the business ethics principles from the textbook.

Your summary of the author's viewpoint and your discussion of the major issues presented in the case must be in paragraph form. However, your responses to the three Questions for Thought can be answered either in paragraph form or as a numbered list. There is no minimum word count requirement for this case study. You will be graded on your summary of the author's viewpoint, your discussion of the ethical issues facing Tyco, and your responses to the questions.

Remember, if you paraphrase or quote words or ideas from your course textbook or other resources, you should cite your sources following the APA style citation guidelines.

1. Summarizing the overall viewpoint of the author:

The case mentions unethical and illegal actions done by Tyco's former CEO Dennis Kozlowski, CFO Mark Swartz, and some other members of the board of directors, which led to the criminal investigation by the Court. According the author's viewpoint, the scandals occurred due to the following manipulations and illegal actions:

- Using Tyco's money for personal uses (self-interests)

- Extreme high compensation levels given to Tyco's management (inability of the board of directors in decision making)

- Kozlowski's Sales tax avoiding (self-interests)

- Manipulation in using Tyco's bonuses

- Financial Statement Manipulations

2. Major Issues presented in the case:

- Kozlowski's and Swartz's evasion of Sales taxes on paintings he bought in New York

- Kozlowski and Mark Swartz and some other management members used Tyco funds for their own personal uses (buying artwork, properties, organize birthday party for Kozlowski's second wife etc.)

- Tyco's executives were involved in stock fraudulence

- Unauthorized disbursements of bonuses

- Falsification of accounting records

- Former executives stole money from Tyco (larceny)

- Extreme high compensation package levels to management members

- Allowing management members and staff to borrow money from the company (key employee loan program) and later applying an act to forgive the loans