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Business Corporations and their Role in the Industry Essay

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Updated: Dec 17th, 2019

Introduction

Business Corporations define objectives that are used to help in reinforcing the position of business Companies; this leads towards strengthening of some respected positions within the industries which establishes the business above existing competitors. Business ethics and regulations are observed for the purposes of realigning business institutions towards their respectful positions.

The corporate and financial ethics revolves around the company’s key strengths and opportunities, and at the same time assist in preventing any form of weaknesses as well as protecting the company against threats. However, there is a possibility that a company could create competitive advantage through the implementation of appropriate business models (Camardella, 2003, pp. 103-107)

Summary of the author’s overall view-point

The author focuses on the current moral ethics and lifetime decisions which require address in the life of businessmen. The issues pertaining to work place ethics are explicitly addressed within the case study. The author focuses on Tyco’s policies which require revision as a result of numerous scandals experienced annually.

This is since formal auditing used by the company results into some of the harmful implications which incorporates various negative publicity and disastrous results on the side of top management. According to the author, management should be capable of scrutinizing various cost structures within the company for the purposes of settling for less expensive and trusted auditing methods.

Hence, the benefits of bylaws, including clear lines of accountability and long term effects should also help in solidifying the Company’s choices.

Due to some disorganization within the Company’s management and employees it was necessary that instead of using corrupt formal audit report to keep the staff accountable to their duties, the process of reorganizing the staff could more importantly assist in establishing clear rules on accountability (Deming, 1986).

Discussion on the major issues presented in the case

Several issues are presented in the case study all of which focuses on financial management ethics, compensation processes and means, at the same time fraudulent cases facing the company’s top management team. There is also the essence of power struggle amongst the employees.

The central problem in Tyco case revolves around the nature of disconnect in power and authority; this is whereby small group of employees including the CEO and some board members assumed the role of managing various sectors of the Company and maintained control of the staff and policies.

The nature of control of this core group from the top managers, CEO and CFO, determined the outcome of every process within Tyco; this brought lots of conflict within the Company’s management team.

This nature of dominance led to easy articulation of fraudulent activities including customer related services, of which corrective attempts could not be made since even investigative bodies such as PWHC were involved (Chan & Lynn, 1991, pp. 57-87).

Additionally, “sloppy” and “corner-cutting” ways proved second in nature for the top management team who never entertained the grievances of their junior employees. This is clearly depicted on the power struggle saga where one employee was forced to resign from his duties, owing to conflict with one of the board members.

Employees, who attempted to challenge the Company’s fraudulent practices, were immediately silenced. This, in turn, led to an undercurrent of unrest amongst the employees (Stanwick and Stanwick, 2009).

Questions for thought

Research reveals that workers could only be motivated through payment. The theory of scientific management addresses some crucial issues concerning workers. According to the case study there is a perspective that Kozlowski do not naturally enjoy work therefore calling for close supervision for perfect work to be done. This calls for managers at various capacities to develop process breakdown which entails different tasks performed.

This could have made it difficult for the CEO to perform any fraudulent actions since clear records could have prevented his moves.

Despite all these, employees should also be equipped through appropriate training methods and equipments which enable them to perform their duties effectively with respect to ethics safeguarding purchase of equipments within the market. Payment should be made based on delivery, the level of performance and time taken to complete full transactions (Stanwick and Stanwick, 2009).

The term commingling is always used whenever, fiduciary, which presents the person entrusted with the management of funds other than his or her own, decides to embezzle the same funds for individual benefits without clear records from the company. Tyco’s case presents various means where the respective company officials’ including the CEO breaches their fiduciary duties.

Tyco’s top management officials were drawn into several commingling cases; for example Mark Belnick was charged with a case whereby he took loans and bonuses from the company without proper authorization and at the same time purchased apartment in New York using the company’s funds but instead indicated only his name on the assets.

At the same time the company’s funds were used to organize for Kozlowski’s wife birthday which according to the CEO was part of the company’s business function which was not the case. Tyco funds were used by the CEO on some occasions to maintain his residential homes in Florida as well as purchasing some of his personal effects (Stanwick and Stanwick, 2009).

It was not possible for the board to identify the various adjustments since some of its members were also involved in the many scandals within the company. This made it easier for vital information to be blocked from reaching the board for further discussions. The company was focused more so in the mechanistic perspective where they dealt with members collectively rather than individually (Stanwick and Stanwick, 2009).

References

Camardella, M.J., (2003). Effective Management of the Performance Appraisal Process. Employment Relations Today, 30(1), pp. 103-107.

Chan, Y.C. & Lynn, B.E., (1991). Performance Evaluation and the Analytic Hierarchy Process. Journal of Management Accounting Research, (1), pp. 57-87.

Deming, W.E., (1986). Out of the Crisis. Cambridge, Mass: MIT Centre for Advanced Engineering Study.

Stanwick, P.A. & Stanwick, S.D. (2009). Understanding business ethics (1st ed.). Upper Saddle River, NJ: Prentice Hall.

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IvyPanda. 2019. "Business Corporations and their Role in the Industry." December 17, 2019. https://ivypanda.com/essays/business-corporations-essay/.

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IvyPanda. (2019) 'Business Corporations and their Role in the Industry'. 17 December.

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