...According to the Tyco website, Tyco originated as a Tyco Laboratories a United States government research laboratory company. Today Tyco has three independent companies: Tyco Healthcare, Tyco Electronics, and Tyco International consisting of five different business segments. Flow Control, Electrical and Metal products, Fire Protection Services, Safety Products, and ADT Worldwide are the five business segments under Tyco International’s umbrella. Tyco is a vertical structure with levels of hierarchy. The board members and top management are responsible for governing its’ mission and goals while ensuring the organization’s five principles are enforced. Tyco expects each employee to strive for excellence and work as a team. Tyco’s leadership team directs employees to be innovative, openly communicate, and continue to improve their skills. The company focuses on equality and fair treatment for employees. Management and staff are accountable for their actions and work performance. Tyco promotes safety in the workplace. Tyco protects each location by the companies anti-violence, drug and alcohol free workplace policy. Tyco promotes individual and corporate integrity, each person including leaders are to uphold the organization’s standards of integrity with each other, customers, and other stakeholders (Tyco, Peoples & Values, 2010). Vertical structure is the most common business structure; however, many organizations are restructuring their organizations. The restructuring makes...
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...HAROLD F. HOGAN, JR. Tyco International On October 6, 1995, Tyco International, a diversified U.S. conglomerate, received some very unflattering news. A respected investor monitoring organization, the Council of Institutional Investors (CII), had included the firm in its list of the 20 worst-performing S&P 500 companies. CII generated its list annually, based on a mechanical formula that calculated total shareholder returns over a five-year period.1 One commentator described the annual rankings as “the corporate equivalent of being put on the school detention list.”2 The choice of Tyco as one of the 20 culprits was quickly challenged. Tyco’s own management described the result as an artifact arising from an abnormally high share price during a narrow window at the start of CII’s measurement period. Robert Monks, head of Lens, Inc., an activist money management firm and former member of Tyco’s board of directors, also took exception to the report. In a letter of protest to the executive director of CII, Monks asserted that based on his own experience, he believed Tyco was a responsible company fully committed to enhancing shareholder value. He wrote: “On balance we conclude that this is a first-rate company successfully adding value in the difficult mode of a conglomerate. Our criteria [for evaluating] companies ultimately is—what can we, as informed and effectively involved owners, do to enhance value? Our answer in the case of Tyco is—virtually nothing. What...
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...Tyco International – Epic Failure Dionne Flinn March 25, 2013 LDR/531 Thea Miller Tyco International – Epic Failure A business is successful not only if it has the right “product” that consumers want, but also if it is managed and lead by strong, ethical and invested leaders. In the past two decades unethical, corrupt, greedy and incompetent CEO’s have brought down multi-million corporations and cost thousands of American workers their jobs. One such CEO, Dennis Kozlowski of Tyco International, destroyed his company through his arrogance, greed, lack of ethics, and overall disdain for his company. An effective leader puts his own personal interests aside and works for the greater success of his company for their employees and shareholders. Tyco International experienced a boom in profits in the 1990’s through continuous acquisitions of smaller companies and financial manipulation of accounting records. This resulted in rampant greed and corruption, with managers who shared the same values as Dennis Kozlowski advancing into upper management ranks. The main charges against Kozlowski involve “using company funds to purchase millions of dollars worth of artwork as well as an $18 million apartment in Manhattan. Kozlowski used company “loans” for the purchases, allowing him to avoid paying income tax on the money used” (Kay, 2002). Kozlowski allegedly transported crates of artwork to Tyco’s operating headquarters in New Hampshire to avoid paying sales tax. Instead, the...
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...“Forensic Accounting” is a term that you do not hear every day so let’s examine its definition. The Strayer University BUS508 textbook defines accounting as, “The process of measuring, interpreting, and communicating financial information to enable people inside and outside the firm to make informed decisions.” Merriam-Webster defines forensic as, “suitable for a court of law.” Our textbook defines forensic accounting as, “Forensic accounting is accounting performed in preparation for legal review.” The textbook also describes it as, "focus on uncovering potential fraud in a variety of organizations.” The Business Dictionary defines it as a, “Criminal investigation practice whereby investigators analyze financial documents and activities to determine if and how a crime, such as fraud, has been committed by an organization. Tactics include tax analysis, financial reporting review and banking activity oversight.” This also includes white collar crimes such as embezzlement, stock market manipulation and price fixing schemes. This can include the financial impact of marketplace events, such as intellectual property infringement, anti-trust actions, financial reporting fraud, asset impairment and business valuation (Neumann, O'Connor, 2008). It also includes matters of family law, such as matrimonial disputes. In short, "Forensic accounting is the use of accounting, auditing, and investigative skills to assist in legal matters.” They use accounting skills following the GAAP (generally...
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...Abstract According to the phase 2 individual project assignment instructions, each student is asked to look at two scenarios and answer the related ethical questions following each one (CTU Online, 2013). Additionally, it is asked that each student provide a discussion on the new GAAP guidelines for consolidating entities, and to provide an example of a firm that has experienced trouble for failure to comply with the GAAP guidelines. Ethical Dilemmas in Partnerships Scenario 1: In the first scenario, there are two partners in an antique business, Mr. Right and Mr. Wrong. Mr. Right manages the store, and Mr. Wrong travels and purchases antiques to add to their store inventory. The each may borrow items from the inventory on occasion for one reason or another. While Mr. Right was out of town Mr Wrong’s daughter was married and had a desire for one of the inventory items valued at $5,000. So Mr. Wrong took the item from inventory and gave it to his daughter as a wedding gift. He recorded the item as a debit from the COGS for $5,000. The question is asked what are the ethical aspects of Mr. Wrong’s actions and how should he have recorded the transaction? To begin with, they are both wrong for allowing the other to take unpaid for inventory items from the store. It should be made clear in the partnership agreement that any inventory product removed from the store for any purpose...
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...Resolution It was possible that Kozlowski and Swartz could have settled before going to trial, but they claimed throughout the proceedings that they were entitled to all the bonuses and loan forgiveness from Tyco. They were charged with 12 counts of first degree grand larceny, 8 counts of first degree falsifying business records, one count of first degree conspiracy, and one Martin Act count of securities fraud. The trial of Dennis Kozlowski and Mark Swartz began October 7, 2003. The jury was shown the extravagance and lifestyle of Kozlowski, including videos of his wife’s $2.1 million birthday party. Pictures were also shown of his $6000 shower curtain and other lavish items purchased with Tyco’s money for himself. However, during the trial, one of the jurors appeared to make an “ok” sign to the defense team. The court was unable to determine exactly what meaning was behind the gesture, but a mistrial was declared. The juror later received death threats, although no connection with the defendants was ever proven. The next trial for Kozlowski and Swartz did not begin until January 26, 2005. The prosecution changed tactics this time around and focused less on the extravagant lifestyles and concentrated on the theft of Tyco funds. This may have been a more effective strategy as it is not illegal to live extravagantly. They wouldn’t make $6000 shower curtains if no one would buy them. Kozlowski would wind up taking the stand in his own defense and reiterate his claims that he...
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...Group Paper 1-Tyco Company TYCO - Starting with a Clean Slate In 2002, Tyco International Ltd. was involved in one of the top ten largest accounting scandals in US history. CEO Dennis Kozlowski and CFO Mark Swartz were found guilty of siphoning money through unapproved loans and fraudulent stock sales. Not only did the SEC find questionable accounting practices but during the investigation there were findings of abnormally large executive bonuses and grand lavish parties paid for on the company’s dime. The former CEO and CFO were sentenced to 8 to 25 years in prison both of whom have since been released. Right after that news scandal broke, Tyco replaced its CEO with former Motorola CEO Ed Breen. In a move never done before, Ed Breen’s first move was to get rid of the entire board of directors. The message the new CEO wanted to send was that the entire corporate management and structure needed to be changed to put trust back in the company (1). In the next year Ed Breen would hire over 60 new senior executives to try and turn the company around (1). He hired top rate talent who were mostly former employees of other fortune 500 companies. According to the outside world, this made it clear that Ed Breen was interested in establishing new systems and setting a new strategic direction. With the new team assembled, Tyco’s first goal was to see were they went wrong. They performed several phases of exhausting audit reviews from the financial, operational and accounting departments...
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...motivation is related to the effort toward any goal (Robbins & Judge, 2007). This paper will describe how specific organizational-behavior theories could have predicted or explained Tyco’s International Ltd. Failure. It will compare how leadership, management and organizational structures contributed to the failure. Tyco International Ltd Tyco International Ltd. Is a diversified company that provides security products and service, fire protection and detection products and services, valves and controls, and other industrial products. Tyco operates in the Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific. It is headquartered in Schaffhausen, Switzerland and employees 102,000 people (Datamonitor 360, 2011). On 2002 three former high-level executives were accused of fraud. The three accused manger, former CEO L. Dennis Kozlowski, former Chief Financial Officer Mark Schwartz, and former general counsel Mark Belnick, have been indicted for fraud and theft by the Securities and Exchange Commission (SEC) as well as their former employer ("Tyco Fraud Infocenter", 2006). The "Tyco Fraud Infocenter" (2006) website stated that, “the SEC and Tyco International have indicted the former executives on charge of civil fraud and theft. They are accused of giving themselves interest-free or low interest loans for personal purchases of property, jewelry, and other frivolities. According to the SEC, these loans were never approved or repaid. Kozlowski and Schwartz...
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...The Price of Unethical Behavior MGT7019-8 Ethics in Business Laura M Brooks July 21, 2013 We as a society have assumed companies in whole have been ethical in doing business. It wasn’t until Enron in 2001 that the public has become more aware of business activities. Shortly after Enron, Tyco International caught the public eye. One must first have an understanding of what it is to be ethical and moral. Once there is an understanding of these two terms, one may gain an appreciation of the occurrences in the corporate business world in the early 2000’s. One occurrence in particular is Tyco International. Tyco International will be evaluated. This evaluation will include the historical aspects, the corporate spending and the loans obtained, the outcome of events, and the punishments imposed. Further, the question of is it difficult to see ethical breaches that we may commit will be discussed. Ethics and morality are interconnected and thus integrity is also linked. According to Stephens, one cannot be defined without the other being in the definition. Stephens states many definitions of ethics have morals within the definition. One may differ with Stephens. While both ethics and morals relate to right and wrong, ethics is set rules of conduct that spells out how things are based on the rules for a specified group or action and morals are based on a person’s habits or principles and ideals as to their conduct. Integrity is a rigid adherence to a code of behavior...
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...A Matter of Ethics John Hilger Ashford University Personal and Organizational Ethics PHI 445 Stephen Carter February 07, 2014 A Matter of Ethics Business ethics is something that all companies and organizations need to be mindful of. It isn’t something that just the large and powerful for-profit organizations need to worry about, but it is something that not for-profit organizations have to be cautious as well. I plan to show how two large well known institutions failed to live up to these. Penn State is one of the more widely recognized leaders in higher education. It first came into existence in 1855, when the Commonwealth chartered it as one of the nation’s first colleges of agricultural science. And it’s goal was to apply scientific principles to farming. Penn State’s main campus is located in the small city of State College; State College is a quintessential college town with small eateries and quirky little shops that line the streets. There are a total of 24 locations of the campus throughout the Pennsylvania area. Penn State’s tax exempt status is the same as most not for profit state schools and the company is 501c3. Through my research I was unable to find out the date that it was granted or if there was an umbrella organization. According to Penn State’s Alumni Insider from their December 2009 Issue, there are 44,000 full-time and part-time employees at all of the locations. One of the biggest obstacles that any and all institutions of higher learning...
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...– Spring 2010 February 18th 2010 Touch to Order is in the works to compete against a large portion of the existing touch screen market. The two largest competitors in our market place are Tyco Electronics and Touchscreens.com. Both companies have strong foundations and economic models that will provide stability and inventory for Touch to Order. Tyco Electronics, a company started in 1971, by Sam Hurst, is the oldest producer of touch screens. They, simply stated, have the touch screen business figured out. Tyco actually started their business working out of 3 different garages with only 10 employees. They offer LCD touch monitors, touch computers, touch screens, handheld/mobile, and customizable solutions. They can be found on the web at http://www.elotouch.com/. They offer all of these things with screen sizes that vary from 4 to 26 inches. Tyco’s main consumers are in the medical field. They are a $10.3 billion provider of electronic components to more than 150 countries. Located in Berwyn Pennsylvania; they manufacture approximately 450,000 products, made by their 78,000 employees. Tyco’s mission is to create an advantage for our customers. Tyco is sold as common stock on the New York Stock Exchange under the ticker symbol “TEL.” Tyco’s advertising comes through a company newsletter and from word of mouth from current customers. Touchscreen.com based out of Colorado Springs, Co., started in 1995 with the mission of making touch screen products more accessible...
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...Enron, Tyco, and World-com have in common Intro The purpose of this work is to show you what happens when you try to cheat the system. the reason the government does audits and checks for so many frauds is because people nowadays will do whatever it takes to make a little extra money. What these companies did not only hurt themselves in the long run but hurt the millions of workers and families that were connected with them. The Companies Enron was formed in 1985 by two gas companies, Houston Natural Gas and Nebraska InterNorth.Enron incurred massive debt and, as the result of deregulation, no longer had exclusive rights to its pipelines. In order to survive, the company had to come up with a new and innovative business strategy to generate profits and cash flow. To try to fix this Enron came up with the idea of becoming a “gas bank” to try to fix its problems. They would buy gas from a network of suppliers and sell it to a network of consumers, contractually guaranteeing both the supply and the price, charging fees for the transactions and assuming the associated risks. This became so successful that they decided to apply this to other things instead of just gas like, coal, paper, steel, water and even weather. In 2001 CEO Kenneth Lay retired and named Jeffrey Skilling president and CEO of Enron. On October 16th 2001 They reported their first quarterly loss in over four years and went downhill until the company filed for bankruptcy on December 2 2001. Tyco labs originally...
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...Part 1- Facts of the Case Prior to the Tyco scandal, the company was one of America's largest conglomerates, with operating revenues of 38 billion dollars and 240,000 employees, worldwide. Tyco Laboratories began operations in 1960, performing experimental work for the U.S. government. The firm went public in 1964 and quickly expanded, mostly by acquisition, to exploit the commercial applications of its work. Dennis Kozlowski joined the company in 1975 as an assistant controller. The company subsequently shifted its focus from growth to profits within its three primary divisions: fire protection, electronics, and packaging. Kozlowski joined Tyco's board in 1987 and became president and chief operating officer two years later. Kozlowski engineered a coup to become Tyco's chief executive officer (CEO) in 1992 and the chair of the board in 1993. He diversified the company, branching into health care. Tyco eventually became the second largest producer of medical devices in the United States. On December 5, 2001, the Tyco shares were trading for 59.76 on the NYSE. B. Identification of all individuals or firms who knew about, participated in, or condoned the behavior. The primary people that were identified for responsibility of the scandal were Dennis Kozlowski and finance chief, Mark Swartz. Kozlowski joined the company in 1975 as an assistant controller at Tyco. He worked in the company during a time of rapid expansion and moved to the board of directors in 1987, become CEO in...
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...ETHICAL DECISION MAKING AND ETHICAL LEADERSHIP To improve ethical decision making in business, one must first understand how individuals make ethical decisions in an organizational environment. Too often it is assumed that individuals in organizations make ethical decisions in the same way that they make ethical decisions at home, in their family, or in their personal lives. Within the context of an organizational work group, however, few individuals have the freedom to decide ethical issues independent of organizational pressures. ETHICAL – ISSUE INTENSITY The first step in ethical decision making is to recognize that an ethical issue requires an individual or work group to choose among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong. Ethical issue intensity, then, can be defined as the relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization. it is personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressure prevailing at a particular place and time. Ethical – issue intensity reflects the ethical sensitivity of the individual or work group that faces the ethical decision – making process. Research suggest that individuals are subject to six “spheres of influence” when confronted with ethical choices – the workplace, family, religion, legal system, community...
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...Management Planning Paper Tyco International Ltd is a diversified, global company that provides vital products and services to customers in more than 60 countries. With more than 100,000 employees worldwide, Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. Tyco vision is to be the customers’ first choice in every market they serve by exceeding commitments, providing new technology solutions, leveraging their diverse brands, driving operational excellence, and committing to the highest standards of business practices. Tyco strive to adhere to the highest standards of corporate governance by establishing processes and practices that promote and ensure integrity compliance and accountability. They understand and exceed their customers’ needs, wants and preference to provide greater value to their customers. Tyco focus on strategies to achieve organic growth targets and deploy cash for growth and creation. They build on the company reputation and image internally and externally while driving initiatives to ensure Tyco remains an employer of choice. Operational excellence implement best in class operating practices and leverage companywide opportunities and best practices. The financial strength and flexibility, ensures that revenue, earnings per share, cash and return on invested capital objectives are met. Tyco International was founded in 1960...
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