Management Failure of Tyco International
University of Phoenix
April 12, 2010
Tyco International was founded by Edward Breen in 1960 (Wikipedia, 2007). According to Wikipedia, (2007), Tyco International’s operational headquarters is in Princeton, New Jersey, and employs 247,900 employees. Dennis Kozlowski became the CEO in 1992, leading with aggressiveness acquiring several other companies into the organization (Wikipedia, 2007). In 1999, after a stock split, rumors began to spread about Tyco’s accounting habits. It was said that Tyco was producing irregular financial accounts, but was denied by ...view middle of the document...
Management has the most important job in a company because the success is dependent upon their actions.
Kozlowski’s management plan was to turn Tyco International into a large integrated company as GE. Only his plan came with his own benefits as well. No one can ever say what drove Kozlowski to commit such monstrous crimes and put so many people’s jobs in harm’s way. By studying his actions, someone can see that it is easy for a rich person to be corrupted in the eye of money also.
Kozlowski broke federal laws (tax aviation) and state laws during his time as CEO for Tyco. He fraudulently transported money to New Hampshire to avoid paying taxes, stilling money to purchase his apartment, and retrieve loans through the company. Kozlowski pleaded not guilty to the charges in 2002 and a trial was scheduled for June 26th of the same year. He paid a 3 million dollar bond to regain his freedom until the trial.
Kozlowski showed little ethical concern with how his actions would affect the company, or any of the people involved with the company. According to what has been written in pertaining to his criminal history with Tyco International, Kozlowski had to have made his actions a part of his plan from the beginning. When he began his reign in 1992 as the CEO of Tyco International, he began his deceit through aggressively merging smaller companies and buying out others. The deceit took place when the financial paper trail was doctored to claim the funds as asset instead of spent monies.
Kozlowski’s actions were not only damaging illegally and ethically; his social responsibility was damaged too. Because it is a company’s social responsibility to do the right thing for the society; the society was not taken into regard. A bankruptcy for Tyco International would have meant the depletion of jobs for over more than 240,000 people. That is not to mention the shareholders who counted on him to be honest in the financial reports. Not all the 27 years of Kozlowski’s reign as CEO for Tyco International was corrupt. He managed bravely and enterprisingly the first few years of his time there (Business Week, 2002). Managers have to be aware of legal, ethical, and socially responsible planning. By implementing a plan in regard to these characteristics, a manager can avoid future failure.
After the company’s fall, they had to rebuild with a strategic plan. A person of interest in the rebuilding of the trust in Tyco was Michael Useem, a sociologist who interviewed Kozlowski during his greater days before the fall of Tyco (Business Week, 2002). In the same article, Business Week, (2002) said, “Under Kozlowski, he says, Tyco's culture discouraged subordinates from questioning top executives and discouraged contact between directors and...