An infamous contradictory of the “social responsibility of business” would have to be the Tyco scandal that occurred in 2002. Tyco, a widely known manufacturing company of products ranging from health care products to electronics, was shocked to discover that former CEO, Dennis Kozlowski, was stealing millions of dollars from the company for his own personal use. With great craftsmanship within the field of deception, Kozlowski along with the Chief Legal Officer, Mark Belnick, and CFO, Mark Swartz worked together to provide each other ambiguous loans while falsifying the records to hide the traces.
This incident was estimated to be a loss of $600 million for Tyco.
Deception, fraud, and clearly no ounce of respect for the company were continuing themes for these executives’ behaviours. Were they not paid enough initially? Was there a heart-wrenching tale of injustice behind their actions? How is it ethical to go ahead and betray every ounce of trust and confidence that someone has instilled upon you? Do these men not feel the wrath of their conscience throbbing within and screaming with guilt and shame?
It boggles my mind to know that Kozlowski was the top paid executive at Tyco, yet he wanted more. It seems that his greed had no limit and when the easy money became tangible, all sense of values, morals, beliefs was silence. This situation is not a matter of trying to cut corners for the company to get ahead, but rather well trust leaders destroying the company from within. At least with the former suggestion I can try to understand the pressures, reasoning and need for the leader to take his team to the next level.
The main ethical issue here is how much power is too much power? How does one segregate the power to govern and make decisions that are honourable from flirting with that voice that says it’s okay to have a moment of weakness? Tyco’s CEO, CFO, and the Chief Legal Officer were probably all honourable men at some point in their reign in the company, but through the budding temptation and the process of discovering the type of power that they each possessed: referent, information, and legitimate, all ethical decision-making was silenced.
“Only people can have responsibilities.” That claim was sadly mistaken for this unfortunate incident. The greed within these men’s eyes prevailed and the social responsibility that they had to upkeep was discarded.
For Tyco, their leaders didn’t “stay within the rules of the game”. Instead, they were performing a marionette puppet show filled with lies and shame. It is hard to believe that the CEO, Dennis Kozlowski, was once praised for being one of the best managers around.
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