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

Summary of Case Study: “Tyco: I’m sure That It’s a Really Nice Shower Curtain”

Summary

Dennis Kozlowski was employed with Tyco for 27 years becoming the CEO after 17 of those years. At the time that Kozlowski became CEO, Tyco was just a $2 billion dollar company. Through hard work and dedication, Kozlowski turned it into a $27 billion company. Unfortunately, somewhere along the way, Kozlowski began using Tyco funds for his own personal gains. It appeared that he took full advantage of the power associated with his position as the CEO. He began a series of unethical actions, such as purchasing millions of dollars’ worth of paintings from an art gallery in New York and having them shipped to New Hampshire in order to avoid paying sales and state taxes. These painting were purchased with Tyco funds and hung in his apartment in New York. He also purchased several homes, over-the-top items for his homes and even held a $2.1 million 40th birthday party for his wife in Italy. (Stanwick & Stanwick. 2009).

The boards of directors were also in on the unethical actions, as many of them were friends of Kozlowski. They along with a few other Tyco executives knew of and helped to hide the corrupt actions of the Tyco CEO. This contributed to Kozlowski being able to steal so much for so many years. As news of these corrupt actions filtered through the public, Tyco stock plummeted from $60 a share December 2001 to $16.05 in June 2002. (Stanwick & Stanwick. 2009)

Ethical Issues facing Tyco:

The unethical practices of CEO Kozlowski and former CFO Mark Swartz who between the two of them stole approximately $170 million as well as $430 million in stock sales from Tyco, brought about a change in how Tyco conducts business. Once he two executives were sentenced to jail and forced to pay Tyco back some of the money,