Tyco

|Tyco International | |AC504 Ethical Issues in Business and Accounting | |Unit 1 Assignment | |Heather Friday | ABSTRACT Tyco International, Ltd is a large manufacturing company based in Switzerland that manufactures a variety of products ranging from electronics to healthcare supplies in three separate companies: Tyco Healthcare, Tyco Electronics, and a combination of Tyco Fire and Security and Engineered Products. Tyco provides security solutions, fire protection and flow control services. Tyco’s security solutions designs, installs, and monitors security systems. Tyco’s flow control designs, manufactures and repairs valves, pipes, fittings, and automation and control products while the fire protection department designs, manufactures and installs fire detection and suppression systems. Tyco International Ltd. Scandal In the Tyco scandal, three of their top executives were accused of fraud and theft in 2002. The three executives indicted are former CEO Dennis Kozlowski, former CFO Mark Schwartz, and former general counsel Mark Belnick. In September of 2002, the former executives were accused of giving themselves interest-free or low interest loans for the purpose of purchasing property, jewelry and other inappropriate personal possessions. They didn’t stop there though; Kozlowski and Schwartz were also accused of issuing bonuses to themselves or other employees without approval from the board of directors. These bonuses were used as a loan forgiveness system for those who had borrowed loans or used as a form of bribery to silence the inquiries of suspecting employees. Kozlowski, Schwartz, and Belnick were also charged with insider trading. This turn of events called for Tyco to make the transition to an ethical workplace and began this process by hiring Edward Breen as their new CEO and integrating the following ethical principles into Tyco’s governance: 1. Presence of strong leaders  2. Web of accountability- the need to surround yourself with people who will challenge you and ask good questions in order to help you make ethical decisions all the time. 3. Behavior tracking process- including company morals and ethics in all managerial and leader assessments. In an effort to allow employees the comfort of asking questions and expressing concerns, Tyco established ConcernLINE. ConcernLINE is a confidential hotline for employees where they are allowed to voice their concerns and come forward with issues they have noticed. Although Tyco is still working to perfect its ethical office environment, they are definitely on the right path. In the future, In the future Tyco hopes to expand and look at using other tools, such as the interview process, to determine if candidates fit in the company’s culture and ethical environment. References: 1. MERCED, M. J. (2010, May 25). Tyco International Ltd. News - Company Information - The New York Times. Times Topics - The New York Times. Retrieved March 16, 2013, from http://topics.nytimes.com/top/news/busines. 2. Securities and Exchange Commission vs. Tyco International Ltd.; http://www.sec.gov/litigation/complaints/2012/comp-pr2012-196.pdf; Retrieved March 16, 2013. ----------------------- 1