Tyco International: Leadership Crisis
Tyco International: Leadership Crisis
Case Study #14
Ethical Decision Making
LDR
Case Study Prepared by:
Tyco International: Leadership Crisis
Tyco International, one of the most notorious scandals of this decade. Tyco International is a diversified manufacturer that had a big ambition in the late 1990s: to become the next General Electric. The company provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products. On September 12,2002, Two of Tyco International top executives, CEO L. Dennis Kozlowski and CFO Mark H Swartz were arrested and charged with misappropriating more than $170 million from the company. Another executive and general counsel was charged with concealing $14 million in personal loans. Tyco survived the scandal under the new leadership of the CEO Edward Breen. Breen implemented a corporate code of ethics and installed a corporate ethics program that is a role model for how one can clean up corporate misconduct.
The man behind the scandal Dennis Kozlowski, CEO. Dennis Kozlowski was born November 16, 1946 in Newark, New Jersey. He grew up in a Polish neighborhood and was the first one from his family to attend College. Kozlowski started his career in Tyco in 1975 as an internal auditor, becoming the CEO in 1992. The company massively expanded during Kozlowski’s years as the CEO. Wall street had a nickname for Kozlowski – “Deal-a-month Dennis”. (case study) His strategy worked. By the year 2000, Tyco’s revenue was $28 billion year. Kozlowski saw himself as Jack Welch, the former CEO of General Electric, bold leader who focused on winning. Kozlowksi saw himself as guru, he wanted to show the way to buy old boring companies that were not worth that much and by “hard work, rolling up your sleeves and being tough on expenses turning them into something profitable and valuable”. The company has a modest headquarters in New Hampshire, with a
Case Study #14
Ethical Decision Making
LDR
Case Study Prepared by:
Tyco International: Leadership Crisis
Tyco International, one of the most notorious scandals of this decade. Tyco International is a diversified manufacturer that had a big ambition in the late 1990s: to become the next General Electric. The company provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products. On September 12,2002, Two of Tyco International top executives, CEO L. Dennis Kozlowski and CFO Mark H Swartz were arrested and charged with misappropriating more than $170 million from the company. Another executive and general counsel was charged with concealing $14 million in personal loans. Tyco survived the scandal under the new leadership of the CEO Edward Breen. Breen implemented a corporate code of ethics and installed a corporate ethics program that is a role model for how one can clean up corporate misconduct.
The man behind the scandal Dennis Kozlowski, CEO. Dennis Kozlowski was born November 16, 1946 in Newark, New Jersey. He grew up in a Polish neighborhood and was the first one from his family to attend College. Kozlowski started his career in Tyco in 1975 as an internal auditor, becoming the CEO in 1992. The company massively expanded during Kozlowski’s years as the CEO. Wall street had a nickname for Kozlowski – “Deal-a-month Dennis”. (case study) His strategy worked. By the year 2000, Tyco’s revenue was $28 billion year. Kozlowski saw himself as Jack Welch, the former CEO of General Electric, bold leader who focused on winning. Kozlowksi saw himself as guru, he wanted to show the way to buy old boring companies that were not worth that much and by “hard work, rolling up your sleeves and being tough on expenses turning them into something profitable and valuable”. The company has a modest headquarters in New Hampshire, with a
Cited: 1. Tyco 's cost tyrant. 2001. Strategic Direction 17, no. 5 (May 1): 9-11. http://www.proquest.com.dbgw.lis.curtin.edu.au/ (accessed October 17, 2007). 2. Louis Lavelle in New York (2002, November). REBUILDING TRUST IN TYCO Wharton 's Mike Useem aims to overhaul the corporate culture. But was he too close to the problem? Business Week,(3809), 94-96. Retrieved October 17, 2007, from ABI/INFORM Global database. (Document ID: 242526061). 3. 2007 Tyco International, Ltd. - Board Governance Principles 4. Ferrell, Fraedrich, Ferrell “Business Ethics”, 7th & 8th Edition, Ethical Decision Making. 5. Bloomberg Business week: “Solving Tyco’s Identity Crisis”, Feb. 7, 2008.