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Tyco: I’m Sure That It’s a Really Nice Shower Curtain

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    Tyco CEO Dennis Kozlowski worked for the company for 27 years. In the 27 years that Kozlowski worked for Tyco, he along with many other board members and employees looted millions of dollars from the company. In the beginning of his career at Tyco, it seemed that Kozlowski meant well for the company, considering he grew the company from $2 billion, it showed that he wanted to see it be more successful, however at some point, he got greedy. It seemed that Tyco was the type of company that could be easily manipulated, considering it had been stolen from for so many years.

    Tyco lost $86 billion in market capitalization because of concerns investors had about the company’s strategic focus. (Stanwick& Stanwick, 2009) Considering the Kozlowski was given generous compensations and the company’s money was being mismanaged, there was concern. In less than 6 months in 2002 Tyco’s stock had fallen by $43. 95 and investors had every reason to be concerned. (Stanwick & Stanwick. 2009) Kozlowski used his power and manipulated the system by purchasing several homes, expensive artwork, overly lavish items for his homes and extravagant parties.

    It was hard for me to believe that Kozlowski paid $6000 for a shower curtain. According to Karen Freifeld of Reuters, the shower curtain was custom gold and burgundy and it hung in the bathroom of his maid at his fifth avenue apartment in New York. (Freifeld. 2012) When I think about some of the lavish items he purchased with Tyco’s money, I think of all of the lower level employees who could have benefited from having raises or bonuses with that money.

    With as much money as he was making legally, he made more than enough to pay taxes on the paintings he purchased, he just did not want to pay them. Kozlowski was not the kind of person who should have been running Tyco. In reading this study the author proved that he was manipulative, greedy and self-centered. It is apparent that the right hand was not paying attention to what the left hand was doing. In the beginning of the study, it would appear as if the board members trusted Kozlowski too much and did not pay close attention to what he was doing.

    However, during the investigation, the author showed where there were several board members who reaped the benefits of Kozlowski’s destructive behavior. It seemed that they were all out to make their pockets fatter regardless of how unethical it was. Unfortunately during Tyco’s debacle caused by Kozlowski, Swartz and other board members, many lower level employees suffered. It appears that the employees who did get bonuses and were paid more were paid more because the bonuses were a form of, “hush money. The author of the study makes it seem as if the fifty people who were paid $96 million dollars were paid that to keep their mouths shut about the money that was being shifted and manipulated by Kozlowski and CFO, Swartz. The author did not say that every board member was a part of the Tyco fiasco of money looting, so it makes me wonder about the other board members that were not mentioned in the study. It seemed that if the other board members had put forth an effort to check things out more clearly, that Tyco would not have been in the situation that it was in when Kozlowski started stealing money from the company.

    It also makes me wonder how he could get away with putting so much money into a relocating fund and how he could add other expenses to the fund such as paying for private schools for his family. During the investigation of Tyco, the SEC found that billions of dollars had been looted from Tyco, and that there had been inadequate procedures for authorizations of employees actions, as well as the manipulation of the reports of the companies that Tyco was taking over.

    Considering these types of things were discovered, it makes me wonder if Scalzo who was a partner at PricewaterhouseCoopers (PWC) was also paid hush money by Kozlowski because he did ignored the accounting practices that were occurring at Tyco. (Stanwick & Stanwick, 2009) Considering he did not dig deep and ensure the board of directors had approved funds, it sure does make him look guilty. Being that so much money was looted and so many employees lost their jobs due to Kozlowski and Swartz’s negligence, I think they should have gotten the maximum sentence for their wrong doings. Not only did they cause the stockholders to lose money but they also put the jobs of thousands of employees at jeopardy. If it had not been for greed, Tyco would not have gone through the changes that it had to endure.

    References

    Stanwick & Stanwick, (2009. ) Understanding Business Ethics, (1st ed. ). PearsonHall Education, Inc. Karen Freifeld (June 13, 2012) Reuters. Kozlowski’s $6,000 shower curtain to find new home. Retrieved August 28, 2012 from http://www. reuters. com/article/2012/06/14/us-tyco-curtain-idUSBRE85D1M620120614I

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    Tyco: I’m Sure That It’s a Really Nice Shower Curtain. (2016, Dec 20). Retrieved from https://graduateway.com/tyco-im-sure-that-its-a-really-nice-shower-curtain/

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