Tyco Failure Essay

1162 words - 5 pages

2002 saw an unprecedented number of corporate scandals such as Enron, Tyco, Global Crossing, Halliburton, AOL Time Warner and a list of others. In many ways, Tyco is just another case of failed corporate governance, accounting abuses, and outright greed.Tyco was founded in 1960 by Arthur J. Rosenburg Ph.D. and was supported 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 expanded over the years with diverse growth through the acquisition of multiple companies. A name change to Tyco laboratories and their first acquisition of Mule Battery Products was in 1965. Among other key companies acquired during the 1970s and 1980s were Simplex Technologies who manufactured undersea fiber optic telecommunications cable, Grinelle Fire Protection Systems to manufacture 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 established Tyco as a large conglomerate. The successful growth of Tyco can be credited to Rosenburg and his aggressive management. Tyco continues the aggressively 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 approved a plan to separate the company's portfolio of businesses 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 detective, preventive, and corrective control procedures for effective corporate governance in their overall business plan. Misconduct and greed at he corporate level will eventually result in destructive consequences for the company. 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...

Find Another Essay On Tyco Failure

Tyco Fraud Essay

3507 words - 14 pages explained as a finder's fee for the Tyco acquisition of CIT. In June 2002, Kozlowski was being investigated for tax evasion because of his failure to pay sales tax on $13 million in artwork that he had purchased in New York with the company funds.At the same time, Kozlowski resigned from Tyco "for personal reasons" and was replaced by John Fort. By September of 2002, all three (Kozlowski, Swartz, and Belnick) were gone and charges were filed against

Corporate Governance Benchmarking Paper

6684 words - 27 pages job security without repercussions.In the scenario, Hugh McBride has not directly hid information but does suggest to his colleagues to handle accounting alone and 'flower up' biographies of the potential board members (University of Phoenix, 2010). Accounting practices for McBride will be jeopardized if employees execute Hugh's suggestions as did employees of Tyco and Enron. Failure to adhere to regulatory accounting practices Generally Accepted

Health Law

796 words - 4 pages and cannot be waived; minimize competition with partners, as well as ensuring accountability for those that do violate the authority of their respected positions. Laws such as the Sarbanes-Oxley Act was legislated and implemented as a result of such fiduciary violations which included organizational officers from such corporations as Enron, Tyco, and WorldCom. In addition to ‘duty of loyalty”, corporate governance is also governed by effective

Fundamentals of Business for Managers

1237 words - 5 pages What brought about Enron's collapse?The lack of corporate values brought about Enron’s collapse. Enron's failure can also be attributed to the arrogance and greed. The company's bankruptcy was brought on by dishonesty and fraud. But in fact Enron's bankruptcy was an event of greater cultural import than either the Left or the Right perceives. It represented the failure of corporate values.Enron traded energy, at first. It was good at

Contingency Theory

1156 words - 5 pages organizations profits. The economy plays in the part of how money is made. The turnover ration plays a role for hiring and layoffs. An organization can not run productively understaffed. Therefore, there can be no set way to run a business according to the books. The third factor is the leadership factor. Contingency as it relates to a business falls under leadership. The types of leadership in place greatly affect the success or failure of

Sarbanes - Oxley Act of 2002 and the Effect on the Business Environment

2856 words - 11 pages The Sarbanes - Oxley Act of 2002 is the most important piece of legislation since the 1933 and 34 securities exchange act, affecting everything from corporate governance to the accounting industry and much more. This law was in direct response to the failure of corporate governance at Enron, Tyco, and WorldCom. The Sarbanes - Oxley seeks to bring back the confidence in all publicly held corporations to the shareholders, while placing more

Examination of Leadership Theories Past and Present

1447 words - 6 pages characteristics of a person, not necessarily doing the right thing. As we look at trait leaders in comparison to transformational leaders, one would have to wonder if some of the “great” chief executive officers of Enron, Anderson, and Tyco, just to name a few, possessed trait leadership qualities or some other type of leadership other than transformational. Transformational approach should be a requirement for the current and upcoming leaders of our

Team Leadership

2198 words - 9 pages The arrival of the new millennium brought with it a tsunami of corporate scandals. Just as the publicity from one wave of discredited companies (Enron, WorldCom, Tyco, Adelphia) subsided, another wave rose to take its place (Health South, Strong Mutual Funds). All of these cases of moral failure serve as vivid reminders of the importance of ethical leadership. In every instance, leaders engaged in immoral behavior and encouraged their followers

Pathology of failure in governance VS the board's real strategic contribution.

3148 words - 13 pages IntroductionThe wave of corporate malfeasance has dominated the business news and attracted attention of a growing number of governments, regulatory bodies, professional organizations and legislators across the globe in recent years since collapses and scandals occurred at some famed multinational firms like Enron, WorldCom, Adelphia, and Tyco in U.S.A, HiH in Australia, Brenner Vulkari and Metatlgesellschaft in Germany, BCCI in the UK, Parmalat

This paper exaplins the recent scandal with Martha Stewart and it talks about other recent scandals and how they relate to Martha's situation.

2137 words - 9 pages attempting to distract the public's attention from its failure to charge the politically connected managers of Enron and WorldCom who may have swindled the public out of billions of dollars (Masters)? No matter what the reason, Martha Stewart is going on trial for one of America's biggest insider trading scandals.Recently, there have been many corporate accounting scandals. Enron's scandal was one of the biggest of the century. Kenneth Lay, former

Corporate governance: Role of institutional investors

2998 words - 12 pages examining their own practices and are following good governance practices. For investors it's a good reason to cheer.The growing dominance of equity holdings by institutional investors both domestic and international has brought their activities into limelight as owners of the companies as well as monitoring authorities. The recent debacles like Enron, WorldCom, Aldelphia, and Tyco International have only reinforced the need for active institutional

Similar Essays

The Management Failure Of Tyco International

1402 words - 6 pages The Management Failure of Tyco International Tyco International was founded by Edward Breen in 1960 (Wikipedia, 2007). According to Wikipedia, (2007), Tyco International’s operational headquarters is located in Princeton, New Jersey, and employs 247,900 employees. Dennis Kozlowski became the CEO in 1992, leading with aggressiveness acquiring several other companies into the organization (Wikipedia, 2007). In 1999, after a stock split

Management Planning Document Essay

963 words - 4 pages " through contingency planning (Bateman & Snell, 2007). Thus, leadership is extremely important in business; finding innovative methods to streamline the production and processes of manufactured goods is fundamental. Quite possibly, due to high pressure to perform and succeed top-level managers are sometimes weakened to make irresponsible decisions. Some ethical and moral issues have derailed successful conglomerates and caused their failure

Critical Thinking Application Essay

1272 words - 5 pages governance employees know what is expected of them as well as place a sense of worth upon the employees therefore; the employees maintain a positive image of the company. Without governance Tyco would not have a clear picture for their employees and hence the failure of being the leader within the industry as the employees would not strive to be successful for the company.According to Tyco's vision statement to be the first choice of the customer and

Business Failure Essay

1031 words - 4 pages 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 social acceptance and confidence.One of the contributions to failure by Tyco management was not planning initial stages of oversight needed to ensure