Management Planning at Tyco
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Management Planning at Tyco
David Heinauer
University of Phoenix
MGT/330
July 27, 2010
Instructor: Willetra Brittian
Management Planning at Tyco
Over the past decade, corporate greed has come to the forefront of the national news in America. Corporations such as Enron, WorldCom and Global Crossing have become synonymous with corporate greed and corruption. In 2002 Tyco joined these companies when its Chief Executive Officer and Chief Financial Officer were accused and later convicted of looting the company of $170 million in loans for themselves with no formal approval or knowledge to shareholders (Kemmerer & Shawver, 2006). Tyco’s Board of Directors started the planning that would eventually turn the corporation around. Through effective management planning Tyco will avoid bankruptcy and become a respectable, profitable company.
Tyco’s corporate social responsibility was to restore shareholder and consumer confidence in the company. Tyco tackled this responsibility head on by overhauling its executive ranks, replacing every senior executive by the end of 2002. The Board of Directors hired Ed Breen as Tyco’s new CEO. Breen’s first order of business was to personally hire the over 60 senior executives, making it clear upfront that the highest standards of business practices and ethics would be expected by everyone (Pillmore, 2003). Additionally, investors expressed interest in replacing the board members with more operations minded members. The board members at the time had mostly a financial background and Breen’s new strategy for the company was operationally focused, a substantial shift from the financially focused strategy of the past. Breen also recognized that he could improve shareholder confidence with a new board. Though it was difficult, Breen successfully convinced the board to step aside and shareholders selected new board members (Pillmore, 2003). The executive planning to replace all senior management and the board helped Tyco...
David Heinauer
University of Phoenix
MGT/330
July 27, 2010
Instructor: Willetra Brittian
Management Planning at Tyco
Over the past decade, corporate greed has come to the forefront of the national news in America. Corporations such as Enron, WorldCom and Global Crossing have become synonymous with corporate greed and corruption. In 2002 Tyco joined these companies when its Chief Executive Officer and Chief Financial Officer were accused and later convicted of looting the company of $170 million in loans for themselves with no formal approval or knowledge to shareholders (Kemmerer & Shawver, 2006). Tyco’s Board of Directors started the planning that would eventually turn the corporation around. Through effective management planning Tyco will avoid bankruptcy and become a respectable, profitable company.
Tyco’s corporate social responsibility was to restore shareholder and consumer confidence in the company. Tyco tackled this responsibility head on by overhauling its executive ranks, replacing every senior executive by the end of 2002. The Board of Directors hired Ed Breen as Tyco’s new CEO. Breen’s first order of business was to personally hire the over 60 senior executives, making it clear upfront that the highest standards of business practices and ethics would be expected by everyone (Pillmore, 2003). Additionally, investors expressed interest in replacing the board members with more operations minded members. The board members at the time had mostly a financial background and Breen’s new strategy for the company was operationally focused, a substantial shift from the financially focused strategy of the past. Breen also recognized that he could improve shareholder confidence with a new board. Though it was difficult, Breen successfully convinced the board to step aside and shareholders selected new board members (Pillmore, 2003). The executive planning to replace all senior management and the board helped Tyco...