Tyco's Internal Embezzlement Essay

1616 WordsDec 1, 20097 Pages
TYCO'S INTERNAL EMBEZZLEMENT Ethics in Management Abstract This paper will provide a situational analysis of the article entitled, Ex-Tyco CFO Committed No Crime. Key points include, legal, ethical, and company ground rules, basis of issue, applicable ethics theories, ethical deficiency, organizational leadership, and plan for revision of ethical standards. Tyco's Internal Embezzlement Mark H. Swartz, former Tyco chief financial officer and L. Dennis Kozlowski former Tyco CEO are prosecuted for grand larceny, securities fraud, and falsifying business records. The two executive officers used Tyco International Ltd assets and financial records for their own benefit. Swartz and Kozlowski bought many properties and art collection on top of giving themselves unjustified compensation packages without the approval of the board of director. The two executive take advantage of company loan programs and concealing bonuses and salary. Prosecutor is charging Swartz and Kozlowski with stealing money totaling $170 millions since 1999. The actions of these company executives come out from the expense of shareholders. Swartz and Kozlowski are also accused of inflating company stock prices and pocketed over $430 million dollars. Company policy allows officers and top executive to borrow five times their annual salary. This loan program was approved at the 1997 board of director meeting in Bermuda. The situation presented in this case made us to evaluate the legal aspect, ethical, company ground rules, basis of the issue, ethical theories, ethical deficiency, organizational leadership, and plan for revision of ethical standards. Ground Rules Tyco executive officers knowingly took money from the company with out approval of the board of directors. Company executives used company’s money and loan programs for their own personal pleasure. Tyco CEO and

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