Failure at Tyco International, Ltd.
Failure at Tyco International, Ltd.
LDR / 531
January 31, 2011
Clance Doelling
Failure at Tyco International, Ltd. Tyco International Ltd is a diverse manufacturer who grew tremendously in the 1990’s and early 2000’s. The company had big ambitions with an aggressive program of acquisitions during this period where they spent an estimated $62 billion to purchase more than 1,000 companies. However, unbeknownst to the shareholders of Tyco and the world, Tyco was led by a management team and CEO (L. Dennis Kozlowski) that did not use wise or truthful business practices and organizational behavior. In the following paper, I will examine the failure that occurred at Tyco, compare, and contrast contributions of leadership, management, and organizational structures to the failure.
Management Failure Tyco spent the most of the 1990’s purchasing and acquiring new companies, which grew into a large empire. This large conglomerate had big ambitions, and it was said that Tyco would become the next General Electric. However, Tyco did not live up to that title, and unfortunately, due to the misdealing’s of Tyco top executives, and the company had a major setback in June of 2005. Top executives became engulfed in accounting scandals and white-collar crimes. Tyco’s e leader and CEO (Kozlowski) was also accused of mishandling funds, fraud, conspiracy, and grand larceny charges. In 1992, Dennis Kozlowski became the CEO of Tyco International and he helped the company adopt an aggressive acquisition strategy. He was able to increase Tyco revenue 48.7% each year from 1997 – 2001 (Bianco, Symonds, Byrnes, 2002, p. 5.). Kozlowski structured acquisitions as a reverse takeover, which enabled Tyco to assume companies and a network of offshore subsidiaries to shelter foreign earnings from U.S. taxes. This structure benefited Tyco as stocks soared and the company became more profitable to shareholders. Kozlowski spent a lot of money both personally and with business
LDR / 531
January 31, 2011
Clance Doelling
Failure at Tyco International, Ltd. Tyco International Ltd is a diverse manufacturer who grew tremendously in the 1990’s and early 2000’s. The company had big ambitions with an aggressive program of acquisitions during this period where they spent an estimated $62 billion to purchase more than 1,000 companies. However, unbeknownst to the shareholders of Tyco and the world, Tyco was led by a management team and CEO (L. Dennis Kozlowski) that did not use wise or truthful business practices and organizational behavior. In the following paper, I will examine the failure that occurred at Tyco, compare, and contrast contributions of leadership, management, and organizational structures to the failure.
Management Failure Tyco spent the most of the 1990’s purchasing and acquiring new companies, which grew into a large empire. This large conglomerate had big ambitions, and it was said that Tyco would become the next General Electric. However, Tyco did not live up to that title, and unfortunately, due to the misdealing’s of Tyco top executives, and the company had a major setback in June of 2005. Top executives became engulfed in accounting scandals and white-collar crimes. Tyco’s e leader and CEO (Kozlowski) was also accused of mishandling funds, fraud, conspiracy, and grand larceny charges. In 1992, Dennis Kozlowski became the CEO of Tyco International and he helped the company adopt an aggressive acquisition strategy. He was able to increase Tyco revenue 48.7% each year from 1997 – 2001 (Bianco, Symonds, Byrnes, 2002, p. 5.). Kozlowski structured acquisitions as a reverse takeover, which enabled Tyco to assume companies and a network of offshore subsidiaries to shelter foreign earnings from U.S. taxes. This structure benefited Tyco as stocks soared and the company became more profitable to shareholders. Kozlowski spent a lot of money both personally and with business