Case Study

Case Study

Case 1: THE RISE AND FALL OF DENNIS KOZLOWSKI

1. Rogue means a dishonest person. Koslowski was described as a dishonest person because he became so unhinged by greed and started spending the company’s business money luxiriously. He was not genuine to his shareholders and thus left many debts behind after his fall from the business company.

2. Kozlowski’s behaviors are described as good, bad and ugly. First, they are good because when he was a CEO of Tyco International, he made the company a corporate giant in terms of growth. At its peak, Tyco had already emerged with 200 sudsidiary companies in a year under good leadership. This led Tyco’ value to increase 70-fold thus Kozlowski had to be remembered as the greatest businessman in the world. Secondly, his behaviors were bad because he became dishonest. He was then accused as a criminal together with his former financial officer for stealing $170 million from the company. They squandered money through manipulated purchases of stock within the company. Lasty, his behaviors are ugly because his actions  almost led to fall of the company where he had worked for 27 years. This made the value of the company’s stock to drop dramastically for about $90 billion.

3. The explanations are both internal and external. On the external side, we focus on Kozlowski’s bad and ugly behaviors that made the company to make losses. In addition, the case of making illegal transactions and bad managerial misconduct are external aspects that affect business.Consequently, his behaviors are internal because he had good leadership qualities at first thus added value to the company making it a corporate giant in terms of growth.

4. To understand the behaviour of Kozlowski, one needs to focus on the events that shaped his personality. This is because we can be able to tell his behavior well and how he came to change. Following his events, his mother worked in Newark police department and his father was a wheel-dealer. His father was a deceiver and an effective persuader who used to tell lies though he had a stong personality. This could actually contributed to Kozlowski’s behaviors. Kozlowki was an easygoing child in school, which led to him being elected as a classs politician and this contibuted to his good behaviors. However, his demeanor disappeared after he had already worked for 27 years in Tyco company.

Case 2 : THE COLLAPSE OF ENRON

1. During the collapse of Enron, nobody was helped and many stakeholders were largely absent due to conflict of interest issues. Stakeholders and shareholders were hurt and thus started pointing out flaws in the system that led to the fall of Enron corporate. The stakeholders were mostly impacted by Enron’s management both internally and externally. Enron pointed out their problems and made actions to ensure that this problem will never happen again but Enron’s actions did not make any change because of conflicts of interests.

2. The external causes of the collapse of Enron included; First, weak and ambiguous banking standards, which was due to many companies making a bundle investment in partnerships. Wall Street made selling of the partnerships to initial public offerings together with its crucial set up that led to the collapse of Enron Corporative. Secondly, the management culture that was facilitated through a corporate culture encouraged fraud instead of focusing on real value thus led to rising of price. Lastly, accounting problems because the corporate ignored to make their financial statements publicly but instead they made imaginary transactions between the company and its subsidiaries.

3. The internal causes of the collapse of Enron included; first, bankrupt scandal especially many of the stock selling could go undetected and unpunished until it was too late. Secondly, the non-transparency of economic statements that did not depict its operations with the financial analysts and shareholders contributed to its fall. Lastly, risk management due to its dogmatic environment and its poor business plan thus the collapse of Enron.

4. The companies should put more strict standards on separation level and audit committees. It should have their independent directors to guide them. In addition, the government should clearly define the financial systems and the method of auditing. Lastly, criminal investigations on cases of bankrupt should be taken into consideration to avoid cases of fraud and mismanagement of finances.