Business Failure

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Option 1: Examining a Business Failure

Research a business failure that occurred at a large organization such as Tyco International Ltd., Chrysler LLC, Daewoo Motor America, WorldCom, or Enron.

Write a paper of no more than 1,050 words, describing how specific organizational-behavior theories could have predicted or explained the company’s failure.

Compare and contrast how leadership, management, and organizational structures contributed to the failure.

Organizational Behavior
      Organizational behavior is a field of study, meaning that it is a distinct area of expertise with a common body of knowledge. Organizational behavior studies three determinants of behavior in organizations: individuals, groups, and structure. In addition, organizational behavior applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively. Organizational behavior is concerned with the study of what people do in an organization and how their behavior affects the organization’s performance (Robbins & Judge, 2007).       In the case of Tyco, the organizational behavior of the company in 2002 was unethical in nature. Tyco's former CEO Dennis Koslowski, former CFO Mark Swartz, and former General Counsel Mark Belnick were accused of giving themselves interest-free or very low interest loans (sometimes disguised as bonuses) that were never approved by the Tyco board or repaid. Some of these "loans" were part of a "Key Employee Loan" program the company offered. They were accused of selling their company stock without telling investors, which is a requirement under SEC rules. Koslowski, Swartz, and Belnick stole $600 million dollars from Tyco through their unapproved bonuses, loans, and extravagant "company" spending. Rumors of a $6,000 shower curtain, $2,000 trash can, and a $2 million dollar birthday party for Koslowski's wife in Italy are just a few examples of the misuse of...
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