...The Price of Unethical Behavior The Price of Unethical Behavior The purpose of this paper is to evaluate unethical behavior of Tyco International executives and chairman by briefly summarizing the company’s historical scenario, the spending habits and loans made for those executives, the resulting outcome of the events, the punishment handed down from indictments and whether it was justified. In 1975 Dennis Kozlowski joined Tyco International and in 1992 was named the chairman and chief executive. Through the late 1990s, Kozlowski facilitated Tyco’s expansion. During Kozlowski’s last three years with Tyco he made at least $300 million and was noted as being one of the highest paid executives in the United States. During his tenure at Tyco Kozlowski acquired almost $500 million along with a $31 million dollar New York apartment and several rare paintings, which came under scrutiny by both federal prosecutors and the company. With Kozlowski as chief executive officer he made Tyco into a giant conglomerate mainly through acquisitions. Tyco has two major segments; fire protection systems and security systems is incorporated in Switzerland and has operational headquarters in Princeton, New Jersey. At its peak, Tyco had a market value over $100 billion. In 2002 Kozlowski left Tyco over a issue regarding the misuse of company funds and his hefty compensation package. Shortly after leaving Tyco, Kozlowski was indicted on charges of evading more than $1 million of sales...
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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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...MKT 625 Unethical Consumer Behavior Dr. McFaul January 20, 2013 Unethical Consumer Behavior Introduction Today’s consumer is looking for the best value and some consumers find ways to take advantage of a business through unethical consumer behaviors. Consumer ethics is defined as “moral rules that apply to consumers, such as the choice to return a used item for a refund, shoplift, and engage in software piracy, as well as the steps, the company takes to counter these actions, such as charging restocking fees and limiting returns” (Shiffman, 2010, p. G-2). Consumers have caused businesses additional costs through unethical consumer behavior. Anytime a consumer is unethical it costs the business money in lost profits. Unethical Behavior Many consumers find ways to cheat a company through unethical behavior. Piracy is an ongoing issue that many companies face through consumers illegally recording movies, music, software, and ringtones. Many consumers are stealing these products and do so because it saves the consumer from having to buy these products. Consumers also take the time to buy pirated material at a reduced cost than they can purchase these products at a retailer price. The downside to pirating is that this behavior costs every element of the supply chain money. Those affected are other consumers that have to pay inflated costs, Manufactures, retailers, and inventors or producers of the materials. Some consumers may be performing unethical behavior without...
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...Ethics Oriented Article Review UoP Student RES/351 April 16, 2012 Dr. UoP Professor Ethics Oriented Article Review The following is a summary of unethical business research conduct by Citigroup Inc. and subsequently resulting in trial proceedings for the unethical conduct. The summary will reveal the specific unethical behavior and who were the injured parties in this misconduct. Additionally, insight into how the unethical behavior affected the organization, the individuals, and society. Finally, evidence will be show how this unethical behavior could have been avoided or at a minimum resolved early in the research process. What unethical research behavior was involved? In 2002, Citigroup Inc. was accused of misleading investors. This misconduct was accomplished by the organizations’ research divisions with pressure from the investment sections within the company. The research analysts used biased research to promote the sale of stock that research had shown was not a good investment. The analysts misrepresented the legitimate research because of concern over from backlash from the organizations’ investment bankers. Additionally, the internal pressure from the investment sections to accomplish this misrepresentation was met the reward of bonuses and stock options for the research analysts. The end game in this misrepresentation was to ensure Citigroup, Inc. would have a better bottom line. Numerous examples illustrate the organizations viewpoint of increased...
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...workforce. Ethics can have positive or negative outcome, therefore managers must decide on what action to take in various situations. It is important that organizations encourage ethical behavior because it plays a key role to creditability and leads to an increase of support in the workplace. In this essay, it will discuss managing ethics in the workplace, examples of unethical behaviors, and the key roles and responsibilities in ethics management. Managing Ethics in the Workplace In regard to managing ethics in the workplace, managers tend to focus on deliverables with measurements. For example, ethics programs can include deliverables such as codes, policies and procedures, budget items, training, or newsletters, these practices are implemented because they create appropriate behaviors. An important factor to management practice is the outcome of the behavior preferred by the organization. The ingredient for remaining ethical is trying to be ethical. Therefore, in managing ethics in the workplace, managers and employees should continue to reach company goals and operate ethically. Organization leaders play an important role in leading by example. Leaders should always present themselves in the way they want their followers to be. Examples of Unethical behaviors Unethical behaviors can lead to many legal action against organization and cause the organization to spend out tons of unnecessary money for legal fees,...
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...Agoda.com Arguable Unethical Marketing Behaviours Agoda.com is a Singapore-based online hotel booking company specializing in the Asia Pacific market with a global network of more than 200 thousands hotels worldwide. After being merged in 2007 by the Priceline.com, one of the largest online travel-related services providers, Agoda.com was on its way of rapid expanding globally however, with its controversial marketing strategy of pricing, which is under heated debate. Therefore, this essay intends to examine the reasonableness and unethicality of its pricing promotion. With the support of advanced customer database, Agoda.com could efficiently promote their “attractive prices” to individual customers according to their demands differently. For example, once a consumer has searched or booker some hotels within a target location, Agoda.com will send promotion email to those consumers with “special offers” according to the consumer’s searching history. This promotion practices seems to be consistent with the customer-driven marketing strategy since this allows the company to explore differentiated market segmentations with different consumers’ needs for different hotels (Woodruff, 1997). However, behind the successful strategy, it is likely to be ignored that the contents of its promotion should be considered as unethical issues, which would violate the code of AMA. These controversial issues in those promotion emails mainly involve two aspects, misleading information and...
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...preventing unethical behavior in the workplace. Business codes are widely used globally to prevent unethical means in the organization, an increasing number of companies have adopted business code ethics, 52.5% of Fortune Global 200 companies in 2004 (Kaptein, 2004) compared to 87% of Fortune Global 200 companies in 2008 (KPMG, 2008). Business codes are a set of official document disclosed by and for a business firm to guide the behavior of managers and employees (Kaptein and Schwartz, 2008). The business code prescribed are related to matters such as human rights, labor conditions, ecological environment, confidential information, conflict of interests, fraud, corruption, product quality, profits, sexual harassment and competitions (Kaptein, 2011). Business codes ethic (BCE) are the fundamentals for corporate social responsibility (CSR) which are used to appraise companies for ethical performances and citizenship. Organizations with excellent CSR are rewarded with fame and reputations (Patick M., 2011), thus leading to better sales and company’s stock price (Ron Robins, 2011). However, business code and CSR appraisal can only prevent unethical behavior in the organization to a certain extent. For example, 15% of Ernst & Young’s executives were prepared to commit unethical conducts to win businesses even though the company implemented business codes (Christopher M., 2012). In this context, business codes without strong implementation cannot prevent unethical behavior in the workplace...
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...While contemplating the question of has the Sarbanes-Oxley Act (SOX) made a difference in ethical behavior; the question came to mind; has any law ever succeeded in legislating ethical behavior? The short answer is no, but SOX has lessened the chance of unethical behavior going un-detected. In 2006 top executives at over 150 companies took advantage of lenient reporting policies; where they chose the lowest stock price during a previous quarter, then cashed out at a higher price thereby increasing their profits (Sweeney, 2012). These individuals were caught and this behavior will continue to be detected due to the implementation of SOX. With the passage of SOX and under section 403, which requires executives to notify the U.S. Securities and Exchange Commission (SEC) “of buying or selling stock, including stock options” unethical behavior is lessoning (Sweeney, 2012, para 4). It was determined that the behavior took place before 2002 and it is likely that had SOX not been enacted this behavior would have continued. Paul Regan a forensic accountant stated; “there’s still plenty of fraud. But if we didn’t have Sarbanes-Oxley, the misstatements would be significantly worse” (Sweeney, 2012, para 9). Most experts agree and say that SOX is the most sweeping regulation since the passing of the Secrities Exchange Act of 1934. I would agree with this statement. The unethical behavior of these individuals cost millions of dollars and jobs for American investors. One of the major objectives...
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...manufacturing processes to minimize waste and pollution, and generally reevaluating the effects of their products on the natural environment. b) Green marketing refers to the specific development, pricing, promotion, and distribution of products that do not harm the natural environment. c) Although demand for economic, legal, and ethical solutions to environmental problems is widespread, the environmental movement in marketing includes many different groups, whose values and goals often conflict. d) Some environmentalists and marketers believe that companies should work to protect and preserve the natural environment by implementing the following goals: (1) Eliminate the concept of waste (2) Reinvent the concept of a product (3) Make prices reflect products’ true cost (4) Make environmentalism profitable 2. Consumerism a) Consumerism refers to the efforts of independent individuals, groups, and organizations working to protect the rights of consumers. b) A number of interest groups and individuals have taken action against companies they consider irresponsible by lobbying government officials and agencies, engaging in letter-writing campaigns and boycotts, and making public service announcements. c) Of great importance to the consumer movement are four basic rights spelled out by President John F. Kennedy. These rights include the following: (1) The right to safety means that marketers have an obligation not to market a product that they know could harm consumers...
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...Other Financial Management Techniques The President of EEC has decided to adopt the balanced scorecard. The balanced scorecard translates an organization’s mission and strategy into operational objectives and performance measures for four different perspectives. The President would like for the managerial accounting team to continue research and explain how to use a balanced scorecard to measure unethical behavior with EEC. First as the team is going to obtain research in how to transition to a balanced scorecard let us review the first part of the research, as well. Definition of a Balanced Scorecard The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance (Balance Scorecard Institute). Any measurement system should be developed by the mission, goals, and objectives of the organization, in this case we are analyzing EEC (MUSE, 2010). After defining a balanced scorecard it has an integrated...
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...Unethical Behavior Involved In 2002, CitiGroup Inc. and other top Wall Street securities firms were accused of misleading investors. This misconduct was done by the securities firms’ research divisions. The analysts used biased research to sell stock that they knew were not good buys. The analysts ignored the legitimate research because of concern over from backlash from their investment bankers. They were encouraged to do this by the investment sections of their companies in return for bonuses and stock options. The real research the ten companies did was disregarded completely so that the company would have a better bottom line. In some cases, the analysts recommended stocks that they knew were no good. Citigroup was the parent of Salomon Smith Barney at the time of the ethical misconduct. “At Salomon Smith Barney, analyst Grubman reiterated a "buy" recommendation in February 2001 on Focal, an investment banking client, and a target price of $30 (twice the stock price). The same day, an institutional investor e-mailed a research analyst who worked for Grubman, "McLeod [McLeod USA Inc.] and Focal are pigs aren't they?" and asked whether Focal was a short. The analyst responded, "Focal definitely "" In April 2001, Grubman stated privately the need to downgrade Focal, but nevertheless once again advised investors to buy Focal” (Di Lorenzo, 2006). Some stocks went from $80 to $2 a share but the analysts were still pushing the stock. This went on for months and in some...
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...CLA-6 Assignment #3 – Ethics Ethics is the study of the general nature of morals and of the specific moral choices made by individuals. Ethnics govern our behavior everyday of our lives. There are many different factors that shape our ethical world view such as family, religion, experience, and authority. Everyone does not have the same concept of ethics, everyone have his or her own ideas of right and wrong. Since ethics are different for each person, there would be different paths on the process of making a ethical decision. Beyond personal ethics, there are ethical systems are defined by religious systems and by our governing system. In our country we follow a “Judeo-Christian ethnics” system. That type of system lays out such behaviors such as respecting other’s property, honoring parents, and being kind to others. So overall, as society we try to adhere to such guidelines. But even with an ethical system like that, there are still laws in place by our government to ensure everyone is treated ethically. Even though each person follows a set of ethical standards, ethics works effectively when there are consequences to our actions. Knowing that there are consequences, people will choose different ethical choices than if there is no consequences. There are many laws and rules established by our government just to make sure we all are following ethical standards. By placing forms of punishments, our ethical decision making is always influenced to avoid punishment. Religions...
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...Ethical in accounting practice Ethics is a guideline for us to do what is right and what are wrong, but being unethical is not against the law, to be ethical in accounting practice there are 3 roles Trust, confidentiality and legal repercussions. Trust-Accountants must be worth trusting for understanding the law and legal aspects of the accounting issues. Confidentiality-In a company accounts would have the most information (client’s information, each colleague’s salary, company’s trading record) so it is really important for an accountant to keep their account documents confidential. Legal repercussions- accountants must be really careful for their work and understanding that the consequence of breaking the law if they are not careful for their work. (http://www.ehow.com/facts_6821517_role-ethics-accounting.html) In some companies they will have a person who is called an ethicist, an ethicist is for setting standards for accounting ethics for a company, to become and ethicist, he or she must have a degree on business law and philosophy, an ethicist also play the role of an consultant, the ethicists could answer question like “Can I consider buying a birthday present for our company’s friendly driver who would drive us home even his working time is off as an allowance for entertainment?” not only answering question the ethicist will so advice how to react on different situations, such as misleading financial analysis in order to obtain personal gains, misuse...
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...Ethical Culture Project PART 1: Enron displayed all four cultural dimensions which are: high-risk taking, outcome orientation, aggressiveness, and low/no people orientation as a company. Kenny Lay, who was the CEO and Chairman from 1985-2002, displayed high-risk taking during the Vahalla scandal. He had two oil traders, Louis Borget and Tom Mastroeni that would make bets for Enron on whether the price of oil would rise or fall. This is a risky market because you can lose ten times your original investment, and it was hard to make the amount of money legitimately that they were at the time. Borget and Mastroeni were gambling with Enron’s money. Jeff Skilling organized high-risk company trips where he would plan dangerous activities that Enron employees would participate in. Andy Fastow, Enron’s chief financial officer, wanted to please his boss, Skilling, so he tried to increase Enron’s stock up even though they were 30 million dollars in debt. He got hundreds of special companies to prop up Enron’s stock by making Enron debt disappear. To outside investors it looked like cash was coming in, but Enron was hiding their debt in Fastow’s companies so investors couldn’t see it. Fastow was participating in outcome orientation, and Skilling encouraged him to do so. Skilling created a very aggressive company culture for Enron by implementing a performance review committee (PRC) that people were graded a one to a five and 10% people had to be a five and if they were they would be fired...
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...is defined as “moral principles that govern a person’s or group’s behavior.” These moral principles within a company are known as company or corporate policies, code of ethics, or code of conduct. These are internal policies that govern the ethical conduct of employees and management. These policies can be simple in a broad and general sense or could be more detailed in which they have specific behavioral requirements. These policies govern the employees as well as management and are given consequences should they be violated. Companies create these principles in order to show employees as well as outsiders that the company follows an ethical standard and will not tolerate unethical behavior. As will be discussed in the paper, some companies might use this as a mask to make it seem they are going the right way but are really practicing unethical behavior. Without these guidelines, any unethical behavior would be passed down to the employees and will become an acceptable practice which could lead to trouble for the company and its employees. Many people have ethics instilled in them throughout life and enter a company a certain way. An unethical person will enter a company and continue to do unethical things. The policy makers within a company which include the board of directors, management, and employees as well should understand this and create policies which will prevent unethical behaviors. For example, a person who previously stole money from their job...
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