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Tyco International - Case Study Case Study

No major decision regarding future mergers, acquisitions or investments should be taken by a single executive. All significant activities and fund usage should be approved by the Tyco board during general meetings. The number of these meetings should be of at least one or two per week. The conglomerate should also analyse and re-establish their priorities. In this order of ideas, they should place decreased emphasis on profit maximization and focus on actions that give the company a good reputation. As such, they should place increased emphasis developing and implementing programs in the benefit of the investors, the employees, the stock holders and the consumers.

2.e) the Sarbanes-Oxley Act of 2002 was developed as a response to the multitude of accounting scandals that were tormenting American companies, such as Enron, WorldCom or Tyco. The act is aimed to "To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes."

In the case of Tyco, the implementation of the Sarbanes-Oxley Act will reduce the possibility of further scandals because it will provide appropriate audit controls; it will strictly define the rights and responsibilities of the board members and other managers; it will implement better financial disclosures; it will forbid conflicts of interest; and it will install new rules and penalties regarding fraud and the company's taxes.

2.f) Given the recent management history at Tyco, as well as the past leadership of Joseph Gaziano, a tendency towards excessive spendings of corporate funds for personal benefit becomes obvious. As such, the United States Securities and Exchange Commission might find it difficult to trust the new board at Tyco. On the other hand, given their precarious status, the new executives should present an impeccable business behavior. In other words, the critical situation at Tyco could be the actual guarantee of appropriate actions, accurate accounting, adequate investments, mergers...

The opposite images of the corporation were entirely due to the management style and the organizational culture. During the leadership of Rosenberg, Fort (and hopefully Breen), Tyco registered satisfactory revenues and had a good reputation. Under the leadership of Gaziano and Kozlowski, the company was met with large profits and expansions, but its image suffered severely. The two groups of executives based their actions on opposing values.
3.b) Jeanne Terrile "wrote a less than favourable review of Tyco's rapid acquisitions and mergers" and David Tice "questioned whether Tyco's use of large reserves in connection with its acquisitions was obscuring its results." They were both silenced. The SEC examined the accusations made, but only fined the earnings per share for 1999.

3.c) the fraudulent actions of CEO Kowloski hurt the community as he and his accomplices left numerous individuals unemployed; they stole the state's and consequently the needy's money throughout embezzlement, and they stole the stock holders' money. They also led to a loss of trust in large corporations and have forced investors to become more selective of their financing choices.

Bibliography

Tyco International: Leadership Crisis

M-Tech IDM Suite Supports Sarbanes-Oxley Compliance, M-Tech Identity Management, http://mtechit.com/cgi-bin/emaildoc?document=mtech-sox.pdf&newsession=c944818abf29b29b349f5f51d793ddf4,last accessed on October 8, 2007

Official Website of Tyco International, http://www.tyco.com/,last accessed on October 8, 2007

Tyco International: Leadership Crisis, Kozlowski's Tyco Empire

M-Tech IDM Suite Supports Sarbanes-Oxley Compliance, M-Tech Identity Management

Tyco International: Leadership Crisis, Kozlowski's Tyco Empire

Sources used in this document:
Bibliography

Tyco International: Leadership Crisis

M-Tech IDM Suite Supports Sarbanes-Oxley Compliance, M-Tech Identity Management, http://mtechit.com/cgi-bin/emaildoc?document=mtech-sox.pdf&newsession=c944818abf29b29b349f5f51d793ddf4,last accessed on October 8, 2007

Official Website of Tyco International, http://www.tyco.com/,last accessed on October 8, 2007

Tyco International: Leadership Crisis, Kozlowski's Tyco Empire
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