1) Kozlowski used company funds to purchase personal items like property, paintings, and his wife's birthday party, violating the fiduciary principle of loyalty to the company.
2) Kozlowski stole from the company by treating its money as his own and using its assets for personal gain, violating the property principle.
3) Kozlowski manipulated Tyco's assets and revenue to pay himself a huge salary even as he committed wrongdoings, violating the fairness principle.
How Tyco Executives Violated Ethics Through Fraud and Theft
1. TYCO: I’M SURE THAT IT’S
A REALLY NICE SHOWER
CURTAIN
Daniela Caballeros
Summer A
MAN 4701
2. ETHICAL ISSUES
1. 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 wife's 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. CASE QUESTIONS
1. 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. CASE QUESTIONS
1. 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. REFERENCES
Stanwick A. &D. ( 2012, June 17) Tyco: I’m sure that it’s a really
nice shower curtain.