The Management Failure Of Tyco International Essay

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

A. Belnick, Dennis Kozlowski, and Mark Swartz. They were charged with falsifying business records in order to conceal their questionable tactics in regards to getting loans without obtaining anyone’s approval. The earnings per share was affected negatively by the fraudulent record keeping, and the president of the Fire and Security division, Jerry Boggess, was an accomplice and fired as a result . After avoiding a million dollar tax bill for the purchase of artwork worth $14 million, Dennis Kozlowski was indicted for tax evasion by the DA of New York. Richard Scalzo was responsible for auditing the financials of Tyco. He participated in improper conduct because he did not implement the proper measures within his audit duties as it pertains

Most notably was the Tyco International scandal which happened in 2002, during which the SEC filed fraud charges against the CEO of Tyco, Dennis Kozslowski.

In conclusion, Kozlowski and Swartz were both found guilty of breaking the law on different accounts, and receiving jail time as a part of their sentences was the correct punishment (Sorkin, 2002). These two men stole hundreds of millions of dollars from Tyco International through fraudulent claims, and used the money to pay for houses, apartments, events, and shopping expenses (Sorkin, 2002). Over the amount of time Kozlowski and Swartz were stealing from their company, they had a plan of how they were going to obtain extra profits, which was committing fraud and scamming the customers and company, and even the employees (Sorkin, 2002). It is important that large corporations, and even small businesses, do not oversee white-collar crime because

The New York grand jury indictments - including the charge against the former general counsel, Mark Belnick, 55, who was an investigator in the Senates Iran-contra hearings in 1987 - also accuse Mr. Kozlowski and Mr. Swartz of bribing a Tyco board member and several Tyco employees, apparently to try to keep their scheme secret. The indictment accuses Mr. Kozlowski and Mr. Swartz of enterprise corruption, a charge often used in Mafia prosecutions. The authorities accuse Mr. Kozlowski and Mr. Swartz of stealing $170 million from the company itself and reaping $430 million more by covertly selling Tyco stock while artificially inflating the value of that stock. Prosecutors, as well as the company, contend that Mr. Kozlowski defrauded Tyco by awarding

Due to these criminal activities, many top executives were convicted fraud and sentenced to spend time in prison. WorldCom activities did not align with the company's overall mission and goals. The actions taken by management were not in the best interest of the customer instead they were consumed with acquisitions and increasing the value of WorldCom Shares. The management also should have considered general accounting practices during their strategic planning. Furthermore, create procedures that protect all stakeholders within the firm.

They created an environment and had the departments and individuals competing with each other. Employees and divisions were constantly under pressure to deliver the required results, at times at each others' expense. Since a person's job was at risk if he didn't deliver, there was often the temptation to lie and deceive in order to meet the requirements and stay employed. Since all of this flowed down from, and then bubbled back up to the very top of the company to the executives who had set expectations with investors, the same temptations and the same behaviors existed at all levels within the company. Each department within the company had firm financial goals to meet. Whenever possible, individuals had specific financial goals. This behavior created a culture of selfishness, greed, and "results at all costs." In the end, it bred lies and deception. This culture resulted in the massive accounting fraud that has been uncovered. (Sarno)

Costco Wholesale Corporation is in an industry where there are several of dynamic competition from huge chains such as Wal-Mart or Sam’s Club and Target, and yet it could maintain a competitive and profitable stance. Effective strategic planning is essential part in operating any business in relation toward adapting to organizational and operational adaptation to changing markets. Through inquiries, the influence in the recent economic trends, provide strategies that have use or could use in the adaptation to changes in the market related to issues of economic trends, such as recession and economic downturn. Costco Company’s research paper will further discuss the tactics that has

1. Assess Interco's financial performance. Why is the company a target of a hostile takeover attempt?

On March 15, 2005 former CEO of WorldCom, Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. An internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. Later a second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings and understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees.

The Industrial Revolution reshaped the world and expedited how business was conducted through the use of railroads and steam engines. Department stores soon evolved after and revolutionized how shopping was done and centralized a variety of merchandise at one central location (Tayan, 2003). With the introduction of 20th century operational management strategies such as Just in Time (JIT) and Lean Manufacturing, companies had to alter its operational efficiency and the way it conducted its business in order to grow and stay competitive. Costco Wholesale Corporation entered the wholesale club industry in the early 1980s (Tayan, 2003). The idea behind a wholesale club was to maximize profits by minimizing operational costs

Question 1 Summarize 1 one page how you would explain Enron’s ethical meltdown: Enron was an energy company founded by Kenneth Lay in 1985 through a merger of vast networks of natural gas lines. Enron specialized in wholesale, natural gas, and electricity, and made its money as a wholesaler between suppliers and customers rather than actually owning any. Enron in fact didn’t own any assets, which made their accounting procedures very unusual. The lack of accounting transparency at Enron allowed the company’s managers to make Enron’s financial performance better than it actually was. The organizational culture at Enron was to blame for it’s ethical meltdown. Enron’s accounting scheme slowly began to erode its ethical practices, which soon led the culture of Enron to become a more aggressive and misleading business practice. Enron reported profits from joint partnerships that were not yet attained in order to keep stock prices up (or make wall street happy). As this was happening employees began to notice the ethics in senior management (leadership) deteriorating, and soon after they to would follow in their footsteps. Senior management thought they were saving their company from financial ruin and though lying was ok if it meant saving the company. Investors would surely sell their stocks if they really knew the situation the

This research paper will explore the fraud at Tyco and focus primarily on accounting and auditing issues related to the fraud. One thing worth noting about this case is that fraudulent financial reporting was not at the core of the fraud, which was the case with majority other big frauds at the time, such as Enron and Waste Management. On the contrary, fraud consisted of misappropriation of assets, and fraudulent financial reporting came as a consequence of trying to hide misappropriation of assets and the use of corporate money for personal benefit.

A key factor to Enron’s fall from grace, was due to the foibles of its corporate leadership, in particular, how certain executives were willing to overlook unethical behavior in lieu of profits. For example, Ken Lay, Enron’s Chairman, espoused the ideals that Enron had higher level of morals than the average company (Gibney, 2005). However, on several instances, he failed to enforce or show that level of commitment. In the Vahalla case, he allowed traders that were involved in manipulating and gambling the company’s earnings to continue their operations, despite being warned of their fraudulent behavior (Gibney, 2005). His justification, at the time, was that Vahalla was the only part of the company that was making any money (Gibney, 2005).

Under financial pressure, Minkow started to commit fraud. He forged credit card applications, staged theft, used bogus financial statements, and used his networking skills to entice wealthy investors. The most serious fraud he made was inflating the value of the company’s insurance restoration contracts (Knapp, 2006).