Failure Within Tyco
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- Date Submitted: 03/20/2011 02:46 PM
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Failure within a Large Organization – Tyco International Ltd.
Tyco International Ltd.(Tyco) originally founded in 1960 as a laboratory after going public in 1964 the company rapidly acquired other companies. Tyco continued to grow acquiring other businesses, eventually Tyco’s stock was listed in the New York Stock Exchange. Tyco International grew into a multinational company in 1986 when it divided its subsidiaries into Electrical and Electrical Components, Healthcare, and Specialty Products, Fire and Security Services and Flow Control. Tyco’s growth into already existing operations gave them a leading market share in all of the four sectors (tyco.com).
The purpose of this paper is to examine how organizational behaviors theories could explain the failures of executive management.
The Tyco Company
The 2002 Tyco corruption scandal involved four top executives; L. Dennis Kozlowski, CEO, Mark Swartz, CFO, Frank E. Walsh Jr. Director and Tyco Board Member, Mark Belnik, Chief Corporate Counsel and Executive Vice President. Tyco International was based in Bermuda with annual revenues of approximately $36 billion at the time of the fraud scandal employing over 250,000 employees in over 100 countries (Maremont & Cohen, 2002). They were a leading conglomerate in the world with one of the largest paid CEO’s, Dennis Kozlowski in the world (Maremont, 2003).
Unethical Practices – Fraud
The Tyco International fraud scandal first came to light in 1999, but in 2002 the news broke publicly when the Securities and Exchange Commissions filed an investigation against Tyco and their executives. The investigation was prompted by many red flags including the incorporation of the company in Bermuda to avoid paying taxes. Ultimately Tyco International violated Federal Securities laws by overstating their financials by approximately one billion dollars, smoothing the reported earnings, hiding sizeable amounts of executive compensation and large amount of...
Tyco International Ltd.(Tyco) originally founded in 1960 as a laboratory after going public in 1964 the company rapidly acquired other companies. Tyco continued to grow acquiring other businesses, eventually Tyco’s stock was listed in the New York Stock Exchange. Tyco International grew into a multinational company in 1986 when it divided its subsidiaries into Electrical and Electrical Components, Healthcare, and Specialty Products, Fire and Security Services and Flow Control. Tyco’s growth into already existing operations gave them a leading market share in all of the four sectors (tyco.com).
The purpose of this paper is to examine how organizational behaviors theories could explain the failures of executive management.
The Tyco Company
The 2002 Tyco corruption scandal involved four top executives; L. Dennis Kozlowski, CEO, Mark Swartz, CFO, Frank E. Walsh Jr. Director and Tyco Board Member, Mark Belnik, Chief Corporate Counsel and Executive Vice President. Tyco International was based in Bermuda with annual revenues of approximately $36 billion at the time of the fraud scandal employing over 250,000 employees in over 100 countries (Maremont & Cohen, 2002). They were a leading conglomerate in the world with one of the largest paid CEO’s, Dennis Kozlowski in the world (Maremont, 2003).
Unethical Practices – Fraud
The Tyco International fraud scandal first came to light in 1999, but in 2002 the news broke publicly when the Securities and Exchange Commissions filed an investigation against Tyco and their executives. The investigation was prompted by many red flags including the incorporation of the company in Bermuda to avoid paying taxes. Ultimately Tyco International violated Federal Securities laws by overstating their financials by approximately one billion dollars, smoothing the reported earnings, hiding sizeable amounts of executive compensation and large amount of...