The Management Failure of Tyco International

Management Failure of Tyco International
Felecia Robinson
Organizational Leadership/531
University of Phoenix
April 12, 2010
Alejandro Medina

      Tyco International was founded by Edward Breen in 1960 (Wikipedia, 2007). According to Wikipedia, (2007), Tyco International’s operational headquarters is 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, rumors began to spread about Tyco’s accounting habits. It was said that Tyco was producing irregular financial accounts, but was denied by Tyco’s leaders. Throughout the years of Kozlowski’s leadership, Tyco merged and bought out several companies, making their profits grow beyond 30 billion dollars, but doubled its long term debt by more than 10 billion dollars (Wikipedia, 2007).
            In the event of trying to pull things back together, Kozlowski caused the company more harm. According to Kay, (2002), “The American-based conglomerate Tyco International Ltd. is in deep crisis following a wave of revelations concerning the corrupt practices of the company and its top management.” As things worsened, Kozlowski resigned although the stock was plummeting. A bankruptcy for Tyco International would mean that 240,000 employees would be out of work, which would have sent shockwaves through the economy (Kay, 2002). Acquisitions and financial manipulations lead to huge profits for Tyco over a long period.
          Tyco faced bankruptcy because of failed tricks by its accounting section and fraudulent endeavor by the company’s leaders. Kozlowski was accused of applying millions of dollars to his personal life. His gluttony and misguidance cost the company billions of dollars, him his freedom, and money in court that was unnecessary. Management has the most important job in a company because the success is dependent upon...