Corporate Ethics and Leadership

Over the years, the names Enron, WorldCom, and Adelphia have become indistinguishable with corporate self-indulgence and corruption. Tyco, in an indignity of classic greed, has boldly redefined and projected these reactions to their apex. As the pressing need for control in this seemingly lawless corporate environment has become evident to all, we must consider whether this exodus from ethical actions is simply a firm specific morality issue, or if it is a broad social movement.

In this paper, I will describe how specific organizational behaviors could have predicted and played a part in a company’s failure. I will compare and contrast the contributions of leadership, management, and organizational structures to the organizational failure. Also, in this paper, we will discuss how the responsibility for ethical conduct rests on the organization.

The organization I have chosen is Tyco, a corporation of various businesses acquired through acquisitions. Tyco’s largest division is electronics (connectors, conduits, and printed circuit boards); the fire and security services division is the world leader in security and fire-protection systems; the health care group makes bandages, crutches, and respiratory care equipment; the telecommunications division makes undersea fiber-optic cable. Tyco attained CIT, the financial services division, but three months later sold the acquisition. Tyco has been an aggressive acquirer of companies and the company made 700 acquisitions worth $8 billion (Makamson, 2000).

Tyco raised eyebrows when in 1997 it incorporated in Bermuda, specifically to avoid U.S. corporate taxes. A large amount of mergers that have been behind Tyco’s expansion have provided the company with complex, but legal, tax evasion methods. Although there had been constant gossip about Tyco’s accounting of its mergers, an informal Securities and Exchange Commission investigation into its accounting of acquisitions begun in December 1999 ended in July 2000...