Business Failure Essay

1031 words - 4 pages

2002 saw an unprecedented number of corporate scandals. In many ways, Tyco is just another case of a failed corporate watch dogging that cause, accounting abuses, and outright greed. Arthur J. Rosenburg Ph.D. Founded in 1960 TYCO which got its start through U.S. government research contracts. In 1962, the laboratory was incorporated and changed the direction of the corporation to commercial applications. In 1964, Tyco went public and grew over the years through the acquisition of many companies. A name change to Tyco laboratories and their first acquisition of Mule Battery Products was in 1965. Other key companies bought during the 1970s and 1980s were Simplex Technologies who manufactured undersea fiber optic cable, Grinelle Fire Protection Systems to with fire sprinkler systems and contracts, and Allied Tube and Conduit for steel pipe and related tubular products manufacturing. The 1990s brought additional companies in Wormald International Ltd., Watts Waterworks, Keystone, Wells Fargo Alarm, and Raychem, among others. Tyco Laboratories changed names in 1993 to Tyco International to reflect their diverse expansion and global presence. In 1997, the merger with ADT truely helped establish Tyco as a large conglomerate. The successful growth of Tyco can be credited to Rosenburg and his aggressive management. Tyco continued the aggressive acquisition of more companies from 2000 through 2008. Tyco moved their corporation from Massachusetts to Bermuda and eventually to Switzerland. In 2006, the Tyco Board of Directors agreed upon a plan to split the company into three separate, publicly traded companies; Tyco Healthcare (now known as Covidien), Tyco Electronics and Tyco International. Tyco has different operations in Asia, Europe, Latin America, and North America and are established in over 60 countries worldwide. (Tyco, 2009)Creating an organizational structure that supports ethical behavior is a must for the success of all companies. The additional need for enforcing ethical compliance standards is demonstrated by large corporate failures even with policies in place. Enron was a company that had established a code of ethics, yet still suffered financial devastation from unethical behavior and corporate misconduct. Insufficient systems to monitor the organization's compliance to ethical standards can have disastrous consequences.Tyco neglected to establish preventive and corrective control procedures for effective corporate governance in their overall business plan. Misconduct and greed at the corporate level eventually resulted in destructive consequences for the company. The organizational structure at Tyco did not have a system of proactive compliance review and that enabled the corporate level scandals to proceed without being noticed. The proper implementation of preventive and compliance policies would likely have alerted the misconduct much sooner. This certainly would have tempered the public outrage and allowed a more expedient recovery of...

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