Final answer:
The behavior of Dennis Kozlowski represents corporate malfeasance, specifically related to agency cost and agency theory. It demonstrates a conflict of interest where the CEO acted against the shareholders' interests. It is distinct from ethical personal economic choices that align with personal freedom and morality.
Step-by-step explanation:
The self-interested behavior exemplified by Dennis Kozlowski, the former CEO of Tyco, who was convicted of paying himself unauthorized bonuses and using corporate funds for personal purchases, is an example of corporate malfeasance. This refers to actions by corporate officials that are in their own interests but against the interests of the shareholders and the corporation itself.
The economic term closely related to this idea is agency cost, which reflects the conflicts of interest between stakeholders, such as owners and managers. Agency cost is a part of agency theory, which deals with issues involving the principal-agent relationship, where the principal (shareholders) hires an agent (CEO/executives) to manage the company, yet the agent's interests may diverge from those of the principal.
It is important to distinguish between self-interested behavior within the bounds of law and personal freedom, which involves making economic choices that are ethical and aligned with both personal goals and the broader good, and the kind of self-dealing and misuse of corporate assets exemplified by Kozlowski. While personal freedom in economic decisions is a moral value, using corporate resources for personal benefit without authorization is considered corporate fraud and a crime.