Tyco's Fall

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Adam
Business Ethics

Case 4.13 Pg 218 – Tyco's Fall

Tyco's stock price began to fall when they reported a 24% decrease in earnings. In evaluating the market observers comment is that it makes you question what is next? When a CEO steps down for tax evasion it make you wonder what else is behind the curtain. When the leader of a huge company like Tyco displays unethical practices in his person life what has he done in his business life. How much trouble is the company really in? This would make investors step away from the company until it became apparent that nothing is wrong with the company.

Even though Mr. Belnick was acquitted of all his charges does not mean that he was acting ethical. Mr. Belnick's actions in receiving loans and spending the funds on personal uses not related to Tyco was unethical and one of the downturns the company. I think the biggest change that Mr. Belnick could make to his credo is to establish a higher level of morals in knowing the difference between right and wrong. Mr. Belnick knew in taking the “KELP” loans tat he would not be using them in the appropriate fashion.

Ms. Prues ethical credo was no better than her co-workers and performed unethical decisions in her position at Tyco. Ms. Prue still received over thirteen million dollars in loans and loan forgiveness. Ms. Prue eventually gave testimony in return for immunity from prosecution. In a way I feel like if Tyco was not brought down then she may have kept up on her unethical decisions. Once she knew that she could face prison time she chose a way out that would keep her safe and out of jail. Hopefully this was a steep lesson for her to learn in ethical decisions.

The loans could probably go on so long because the people who were in charge of extinguishing these problems were all in on it. Also, If one thing is covered up then it builds and builds until their a bunch of things that need to be covered up. It is sort of like a house of cards, if one card...
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