Business Ethics “Tyco I`m Sure That It`s A Really Nice Shower Curtain”

BUSINESS ETHICS 5

BusinessEthics: &quotTyco: I`m Sure That It`s A Really Nice Shower Curtain&quot

BusinessEthics: &quotTyco: I`m Sure That It`s A Really Nice Shower Curtain&quot

Thearticle focuses on Tyco in a period when it is befallen by misfortunethat is caused by mischievous managers. The article majorly focuseson Dennis Kozlowski, a corrupt manager whose actions are guided bygreed and luxury. Being Tyco’s president, he siphons money from thecompany’s accounts for personal use and luxury. He is alsopresented as an unethical business man who evades and avoids taxationthrough foul-play.

Thearticle explains the strategies employed by Kozlowski in his bid tocover his misdeeds. He embraces a team of other managers andemployees such as Schwartz, the CFO (Stanwick &amp Stanwick, 2009).With these people, he is able to use projects to his advantage heauthorizes the execution of schemes without the consent of the boardof directors from the mere reason that he and his team should reapwell out of it.

Theauthor of the article tries to underline a core theme: managerialethics. The actions of manager directly affect the progress ordecline of a company (Burcke, 2014). He presents Kozlowski and histeam as unscrupulous whose actions lead to the decline of a prolificcompany. However, their greed for money does not go unpunished thereare put behind bars. Kozlowski also loses his wife on whom he hadfortunes. They lose their jobs, their estates are confiscated andtheir reputations are tainted.

Questionsfor thought

  1. What do you think Kozlowski’s motivation for trying to avoid sales taxes on his art purchases was? Explain

Kozlowskiwas guided by his greed for money. He was willing to go to anylengths to ensure that he avoided taxes. Needlessly say, Kozlowskiwas wealthy enough – whether it was through fraud or not – butopted to avoid paying “little” taxes for his purchases. Thisevinces that his greed led him into the act. He is also assistedgreatly by his corrupt second wife. She aids in facilitating theshipment of empty boxes, being a friend to the arts seller. He wasalso very keen on pleasing his second wife therefore, being that shecould help him avoid tax, he readily falls into the vice. Kozlowski’savoidance of taxes is underlined by greed and the fact that he hadunethical protégés.

  1. Explain the concept of commingling assets with respect to the Tyco case.

Comminglingof funds, in this case, can be defined as the mixing of personalfunds with those of the business (Skillern Law Firm, 2012). This canhappen in three major ways: the transfer of money between thebusiness and personal bank account without proper documentation, thewriting of business checks for use by an individual or vice versa anddepositing business checks in personal accounts (Skillern Law Firm,2012). In Tyco’s case, Kozlowski and his accomplices have exploredand majorly employed the tactic of transferring money from the firm’saccount into their own. Kozlowski and Schwartz were found to haveflawed about $300 million from Tyco’s till through cash and stocks(Stanwick &amp Stanwick, 2009). Commingling is an illegal act not tomention that it is morally unethical for managers to engage in(Skillern Law Firm, 2012).

  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.

Thefirst impression is that it would have been a tough task for theboard of directors to identify acts of mischief in their financialaccounts. This is because the managers, such as Kozlowski, hadaccomplices within the firm such as Schwartz, the CFO. Kozlowski alsopaid off employees loans to entice them not to blow his cover(Stanwick &amp Stanwick, 2009). In addition, the external auditorswere also, either, fraudulent or incompetent. White Coopers House, areputable firm, could not have missed to verify whether all thefinancial decrees by managers had been approved by the board ofdirectors (Stanwick &amp Stanwick, 2009).

Onthe other hand, the board of directors would have questioned, indepth, why the company was gradually losing its marketcapitalization. They should have realized that the problem wasinternal and hence vet the managers for transparency andaccountability (Burcke, 2014). It would not go unnoticed howKozlowski was extravagantly spending money that was to be charged onhis company credit card as in the instance of the expensive birthdayparty in the pretext of a board meeting (Stanwick &amp Stanwick,2009).

References

Burcke,A. (2014). Whatare Managerial ethics? Retrievedfrom http://smallbusiness.chron.com/managerial-ethics-36425.html

SkillernLaw Firm, PLLC, (2012). Comminglingof Business &amp Personal Funds (And Why It Is A Bad Idea).Retrieved fromhttp://skillernlaw.com/2012/09/17/commingling-of-business/

Stanwick,P. A. &amp Stanwick, S. D. (2009). Tyco:I`m sure that it`s a really nice shower curtain.Case Study.