Examining a Business Failure – Tyco

Examining a Business Failure Tyco Examining a Business Failure Tyco Introduction This write up will describe how specific validational expression theories could commence predicted the ruin Tyco International (Tyco). This paper will discuss the contributions of leadershiphip, precaution, and organizational structures to the organizational harm of Tyco. Organizational Behavior Organizational behavior is a field of study, consequence that it is a distinct ara of expertise with a common form of knowledge.Organizational behavior studies three determinants of behavior in organizations individuals, groups, and structure. In addition, organizational behavior applies the knowledge secureed ab off individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively. Organizational behavior is pertain with the study of what people do in an organization and how their behavior affects the organizations performance (Robbins & Judge, 2007) .In the case of Tyco, the organizational behavior of the fellowship in 2002 was misuse in nature. Tycos former CEO Dennis Koslowski, former CFO loot Swartz, and former General Counsel Mark Belnick were accused of giving themselves interest-free or very low interest loans (sometimes disguised as bonuses) that were never authorize by the Tyco board or repaid. Some of these loans were part of a mention Employee Loan program the company offered. They were accused of selling their company shop without telling investors, which is a requirement under SEC rules.Koslowski, Swartz, and Belnick stole $600 one thousand thousand dollars from Tyco through with(predicate) their unapproved bonuses, loans, and extravagant company spending. Rumors of a $6,000 shower curtain, $2,000 trash can, and a $2 million dollar birthday party for Koslowskis wife in Italy are just a few examples of the misuse of company pecuniary resource. As many as 40 Tyco executives took loans that were later forgiven as part of Tycos loan-forgiveness program, although it was verbalise that many did non know they were doing anything wrong.Hush money was withal paid to those the company feared would rat out Kozlowski. Essentially, they concealed their illegal actions by keeping them out of the account books and away from the eyes of shareholders and board members (http//money. howstuffworks. com/cooking-books9. htm). In an organizational field characterized by cutbacks, expectations of increasing worker productivity, and tough competition in the marketplace, it is non surprising that many employees feel pressured to cut corners, break rules, and engage in other forms of questionable practices.What constitutes good honest behavior has never been distinctly defined. Employees see people all around them engaging in unethical practices. (Robbins Judge, 2007). Leadership Failure The senior managers at Tyco failed as leaders. They forgot that leadership was approximately serving others and not themselves. But it was also a failure of those who followed the leaders such(prenominal) as the merged attorneys who failed in their duty to keep the leaders in check. Tyco lawyers wanted to please their bosses instead they should have stepped in when corporate corruption was evident. Most of the people who became infamous for their misdeeds helip were not evil people, tell William Lytton (general counsel for Tyco in 2002). As Lytton sees it, they lost sight of the cultural boundaries, blind by their own career advancement goals. That is where the role of the corporate lawyer becomes critical. While it might prove difficult to s pass along bad things from happening, Sometimes, you do need to just say no (http//www. vermontlaw. edu/x7845. xml). Management FailureTycos top executives ignored their responsibilities to the laws governing corporate management ignored responsibilities to their investors and ignored responsibilities to their employees. The supply and management strat egies of these executives seem to have been more focused on individualised gain than on the best interests of the company and its shareholders. As a closure of their greed and fraudulent activities, the top executives at Tyco were indicted and convicted of fraud charges for improper accounting practices as considerably as unauthorized use of company funds for personal gain.One viewpoint on leadership is that it occurs only when people are influenced to do what is ethical and beneficial for the organization and themselves. This definition of leadership does not include influence attempts that are irrelevant or detrimental to followers, such as a leaders attempts to gain personal benefits at the followers expense (Yukl, 2006). In the case of Tyco, when Ed Breen took over as CEO, he fired 290 of the 300 managers who were employed at Tyco during the Kozlowski era along with the other senior managers.He wanted to bring in new management and employees who would help build Tycos reputat ion up and create an ethical firm that consumers and shareholders could trust again. Organizational Failure While the organization was not solely to blame for Tycos failure, Tyco could have taken preventive measures which would have avoided this situation entirely, such as o created codes of ethics to guide employees through ethical dilemmas o implemented policies for enforcing those codes create a corporate nerve surgical incision and hire experienced professionals to ensure compliance with federal and evince regulations are adhered to o offer seminars, workshops, and similar training programs to try to reform ethical behaviors Todays manager needs to create an ethically goodly climate for his or her employees, where they can do their work fruitfully and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors.In upcoming chapters, well discuss the kinds of actions managers can take to create an ethically healthy climate and help employees so rt through ethically ambiguous situations. Well also present ethical-dilemma exercises at the end of each chapter that will allow you to imply through ethical issues and assess how you would handle those (Robbins Judge, 2007). Summary In 2002, Tyco was controlled by unethical businessmen more interested in personal gain than creating a successful company that shareholders, employees and consumers could trust, respect and benefit from.They failed as leaders and managers and as a result, made the organization as a strong suffer. They acquired businesses quickly, falsified accounting records, took out personal loans, withheld information from the public as well as shareholders, and caused the market share of the company to drop dramatically. All of this unethical business activity could have been avoided had an official corporate governance department been in place and a company code of ethics form _or_ system of government implemented.References Robbins, S. P. Judge, T. A. (2007) . Organizational Behavior, Twelfth Edition Prentice Hall. Obringer, L. (1998-2009). How Cooking the Books Works. http//money. howstuffworks. com/ cooking-books9. htm HowStuffWorks, Inc. Staff say (2008). Lessons of Tyco Just Say No. http//www. vermontlaw. edu/x7845. xml Vermont Law School. Yukl, G. (2006) Leadership in Organizations, sixth Edition Pearson Prentice Hall. ming