Evaluate The Price Of Unethical Behavior Critical Thinkings Example

Type of paper: Critical Thinking

Topic: Company, Investment, Fraud, Bad Faith, White Collar Crime, Banking, Entrepreneurship, Association

Pages: 5

Words: 1375

Published: 2020/10/15


Tyco International is a Switzerland based international company which was established by Arthur J. Rosenberg in the year 1960. The company has a wide range of global consumer. The company has been famous for its electronic security services, fire fighting equipments and alarm monitoring devices. The headquarters of Tyco International is situated at Schaffhausen, Switzerland although its operational department is in Princeton, New Jersey, way far from its base. Tyco has emerged as one of the greats from its establishment as it managed to accrue a large market by setting up its branches in more than 100 countries.

Historical scenario of Tyco International

The company has also managed to collaborate with some of the companies of different prospective such as surgical innovation and so on. In a very limited period of time the company has showed very rapid growth. Then come the period of the accusations and fraud that has been growing under the shed of all positivity. A scam has been significantly engulfing the company which leads an International investigation (Boostrom, 2011). The Tyco Fraud Information Center had found a significant fraud in accounts of the multinational company. In the investigation, it was revealed that the top of the company’s management group had illegally and unethically awarded themselves interest free or low interest loans. Former CEOs L. Dennis Kozlowski, Mark H. Swartz and Mark A. Belnick were alligated among the top management of the said company. The investigation also showed that the low interest loans or the interest free loans were actually never approved by Tyco International’s board of governors and more importantly the loans were never repaid to the company. They were also accused of selling their owned company stocks and shares without informing the investors. It is further revealed that as many as 40 Tyco executives were found guilty but later their loans had been forgiven through loan forgiveness program. Most importantly the accused concealed their illegal actions by hiding themselves from the accounts of the company. They also somehow managed to hide their unethical deeds from the shareholders and the board members of the company.

Loans and Spending

The fraud executed extra spending and loans at low rate could not proceed for a long period because it was committed by the top executives of the company. It was found that the fraud was committed by the former CEO of the company Dennis Kozlowski, the former CLO Mark A. Belnick and Mark H. Swartz, the former CFO of the company. The loan at low rate for the high officials was never approved by the company. This came to notice of the company because this was provided to the high level executives of the company. Kozlowski was the boss of the company and controls the entire operations of the company. He was responsible for all happenings in the company. The board has least authority to question about the lavish lifestyle of Kozlowski as because he was the chairperson of the company. He was involved with the CFO of the company Swartz, who use to work under him. They both were the top executive of the company and work together to misuse the company’s fund and work against the interest of the investors and shareholders (Hellriegel and Slocum, 2009). It took a long time to discover the fraud because it was committed by the top officials of the company. But this fraud was not able to kept hidden from the world because a group was created that looked after the welfare of the interest of the shareholders and investors. It was found that something wrong was going in the company. The Security and Exchange Commission conducted an audit of the accounts of the company and made a detailed study to find out the secret of the actual fraud going on in the company.

Outcome of Events

With the outcome of the results many top officials of the company were replaced and several court cases were conducted against the main victims of the fraudulent. Kozlowski, Swartz and Belnick were terminated from their job because they were found to do a fraud by misplacing a fund of about $600 million and several court cases were conducted against them. About 220 officials who were found guilty for not detecting the truth of the fraud were replaced from the company and other top officials were terminated from their jobs. There occurred a big issue in the society and people related with the company created a negative issue in the society. The court proceeding started and the court analyzed the issue of the fraud committed by the high officials. It was found the Kozlowski and his colleagues were only interested in prioritizing their own interest and didn’t consider the welfare of the shareholders and investors (Kaplan, 2009). These people were also executed for breaking the principles of the employees of the company. They exploited the company as well as the employees of the company along with the shareholders of the company. The two main executive were sentenced to 25years of prison and need to pay a fine of $70 million and 435 million for Kozlowski and Swartz respectively. They also need to pay the company a fine of $134 million.

Justification of punishment

Moral breaks are basic in associations; nonetheless, it is troublesome for people to understand they are taking part in unscrupulous practices until it is past the point of no return. People may end up included in deceptive practices in the association due to the choice to embrace the cooperate culture that they discover. Corporate society decides how workers act and think while undertaking distinctive obligations and obligations inside the association (McCoy, 2008). The developed culture in an association consequently decides the vitality and demeanor that representatives will take. At the point when an association society ends up being undesirable, it is a prolific sign that it is not supported by compelling methodologies. For the most part, there is disengaging between one’s convictions and the consequent moves made.
It has been prolifically accounted for that the measure of $751,101 was gotten by Stephen Foss for effectively supplying Cessna citation and pilot administrations. The officials got these monies unaware of the moral breaks they were ignoring. Kozlowski effectively figured out how to make a society where people amplify their individual increases over the additions of the organizations (Stephen et al. 2012). The dishonest society developed major pioneers of Tyco International saw different representatives, for example, book-keepers and evaluators overlook the money related break that the officials were taking part in. For quite a long time, the monetary office, under the power of Swartz, delivered money related proclamations that demonstrated the false budgetary position of the association.


Tyco’s extortion case is additionally a lesson to associations to develop stringent balanced governance inside the association. Representatives ought to make it their obligations to raise the caution in the event that they recognize any suspicious budgetary exercises among the vital authorities of the association. Worker support is fundamental and great corporate society ought to improve gainfulness, bliss, and general fulfillment. Furthermore, powerful authority prompts hierarchical achievement.
At the point when the misbehaviors were found, the two administrators “bore the best burnt,” as they were completely mindful of the deceptive behavior they were taking an interest in. The brutal sentencing serves as a cautioning to officials that mean to take part in exploitative practices in the association. Administrators ought to lead workers by case controlling the organization to accomplishment through empowering the appropriation of moral practices.


Boostrom, R. (2011). Tyco International: Leadership crisis, pp. 9. Retrieved from
Hellriegel, D. & Slocum, J. (2009). Organizational behavior (12th Ed), pp. 640. Cengage
Kaplan, D. A. (2009). Koz makes his case. Fortune, 160(11), 14-16. Retrieved from
McCoy, K. (2008). Directors’ firms on payroll at Tyco. USA Today. Retrieved fro   http://usatoday30.usatoday.com/money/industries/manufacturing/2002-09-17-tyco_x.htm
Stephens, W., Vance, C., & Pettegrew, L. (2012). Embracing ethics and morality. CPA Journal,
82(1), 16-21. Retrieved from EBSCOhost.

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WePapers. (2020, October, 15) Evaluate The Price Of Unethical Behavior Critical Thinkings Example. Retrieved September 30, 2023, from https://www.wepapers.com/samples/evaluate-the-price-of-unethical-behavior-critical-thinkings-example/
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Evaluate The Price Of Unethical Behavior Critical Thinkings Example. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/evaluate-the-price-of-unethical-behavior-critical-thinkings-example/. Published Oct 15, 2020. Accessed September 30, 2023.

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