OB written 7

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Clemson University *

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May 7, 2024

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1 Organizational Behavior-Written Assignment-7 Leadership Crisis of Tyco Business School, University of the People BUS 5113: Organizational Behavior Dr. Narjerah Delk May.26.2021
2 Organizational Behavior-Written Assignment-7 Introduction Tyco, the well-known company with more than forty years of market field was founded by Arthur J. Rosenberg in 1960. However, it was found to be elaborated in corruption by the CEO, CFO and the Board of Directors in 2002. This problem occurs due to behavioral corporate governance. It also led to an emphasis on the ethical aspects of corporate leadership and conduct. The issue was found that by executing efficient ethical plans and the Tyco has survived after the corruption scandal (ROMERO, 2020). Answers to the Questions: (1) The brief summary of the corruption case. Tyco Corporation has earned 48.7% in profit with the guidance of CEO Kozlowski between 1997 and 2002. However, the four main segments of the company has split in 2002. Later that year, the top management of the company together with the CEO, CFO and several members of boards of directors were responsible for the corruption of the company. "They were guilty in circumstances ranging from grand larceny, falsifying documents, fraud and stealing money from the company and selling information regarding the stock options. The total estimated loss to be more than $420 million was found to have occurred. It caused of massive loss to stakeholders and conversation of several corporate governance and conduct problems.
3 Organizational Behavior-Written Assignment-7 2).The reasons why this case is considered a case abuse of leadership power, unethical behavior, and corruption of the company The Chief Executive Officer (CEO) Kozlowski and Chief Financial Officer (CFO) Schwartz with the other authorities like Board of Directors were abused the leadership power in the company. According to the information, they have misused their leadership power to gain insider information and sold stock to cause loss of 430 million dollars (Sorkin, 2002). CEO Kozlowski has given false information about frugal behavior of the company to a business magazine and misled the public. In point of fact, the Manhattan office of the company had full of unnecessary expenses. This behavior was unethical and also lying to the public. The CEO Kozlowski personally reorganized firm on his own way and selected Schwartz in the CFO position of the company. CFO Swartz was knowing about CEO Kozlowski's illegal actions but he never questioned him and always withheld information about those illegal actions. Lastly, the CEO was sentenced for stealing $170 million from Tyco Company and selling 430 million dollars of stock in an illegal way. The Chief Financial Officer Swartz was also sentenced for falsifying company documents. Moreover, one of the Board of Directors was sentenced with grand larceny to stolen $26 from Tyco. Also, he was trying to involve to the federal investigation. Many of members of director board has used unethical conduct purposely to hide vital information regarding these cases. In fact, many boards of directors made savings in other companies. Also, one of directors has used company funds to purchase a home.
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