The business Tyco was first established in 1960; four years later the company went public and became primarily a manufacturer of products for commercial use. Since then Tyco has grown rapidly with a presence in over 100 countries and over 250,000 employees. During the dates of 1991 to 2001 when Dennis Kozlowski was the CEO of Tyco, the annual sales grew tremendously from $3 billion in annual sales to $36 billion. However, later in 2002 Tyco faced issues with stockholders being extremely cautions after the bankruptcy of Enron, Kozlowski attempted to reassure the public that their accounting was correct. As time passed we learned that Dennis Kozlowski was not being truthful with this statement.
The Fall Of Tyco’s Stock Prices
All was well for Tyco throughout the late 90’s and early 2000’s, but that all came to abrupt change when Tyco saw a 20 percent decrease in stock prices during the middle of January of 2002. The decease of Tyco’s price per share initially dropped due to the loss of investor’s confidence after the bankruptcy of Enron. Kozlowski attempted to reassure the stockholders that Tyco’s accounting was correct and not to worry, but the public did not listen, by February the stock price had dropped 50 percent to $29.90 a share. The loss of confidence from the public also knows as “crisis in confidence” lead Tyco to have borrowed funds. This was the initially reasoning behind the fall of Tyco’s stock prices, however in January of 2002 Tyco withheld information regarding a $9.5 billion dollar acquisition on the companies SEC Filings. Once the SEC began to look deeper into this issue the company witnessed a major decrease of 80 percent stock price.
Ethics of Employees
Mark Belnick was ...
... middle of paper ...
...t and most important thing I learned was to look at how my behavior may affect the people around me. If your actions do not benefit the business and your co works then they are probably not ethical. I also learned to only accept what you have earned. My Kozlowski had not earned the money to buy all the fancy things he had bought in this case; he used money that he took away from the business as well as the stockholders.
In conclusion, this case described a company that started out very strong, but as soon as they seen a decline in stock prices they fell apart. When the stock prices fell the CEO, Kozlowski started making poor choices, such as falsifying financial information and stealing from the business. From my observation, companies that give out large bonuses for reached goals find themselves fighting with executives that put their morals aside for money.
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