The Price of Unethical Behavior

Topics: Sociology, Corporate governance, Dennis Kozlowski Pages: 4 (1452 words) Published: August 21, 2013
The Price of Unethical Behavior

The Price of Unethical Behavior
Tyco International as a whole was no different any other company in that it contained a chief executive officer (CEO) that wanted to achieve success. But at some point that success turned into greed. Dennis Kozlowski began working for Tyco in 1975 and was named the CEO in 1992. Kozlowski had a reputation for being aggressive in his field and during his tenure at Tyco was named one of the “Top 25 Managers of the Year” and became one of the highest-paid CEOs (Kaplan, 2009, p. 14). Along his rise to the top, Kozlowski became subjected to a lavish lifestyle of extravagant vacations, company jets and cars, and memberships. During this rise, he also treated himself to a “$31 million Fifth Avenue apartment, a vintage yacht, a Renoir, and a Monet” (Kaplan, 2009, p. 15). However, in 2002, Kozlowski’s world began to crumble around him. He was initially accused of tax evasion, but this accusation by the Manhattan district attorney led to a broader investigation into Kozlowski’s practices. As a result of this investigation, Kozlowski resigned as the CEO, was indicted for looting hundreds of millions of dollars, and was convicted on a range of felonies that led to an eight to 25 year sentence (Kaplan, 2009, p. 15).

Dennis Kozlowski, over the course of roughly 25 years made a huge impact on Tyco International, but he did not run the company alone. Tyco was comprised with a chief financial officer (CFO) and board of directors. With a CFO and a board of directors in place, how was Kozlowski able to loot millions of dollars? And how did his unethical behavior continue for as long as it did?

Unethical behavior has multiple definitions. Jones defined unethical behavior as “either illegal or morally unacceptable to the larger community” (as cited in Gino & Bazerman, n.d., p. 709). Although some individuals report observed unethical behavior, others may become susceptible to peer influence...

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