Running head: Tyco Organization Failure

Tyco Organization Failure

Renae L. Moreland

University of Phoenix

Tyco Organization Failure

Leadership is defined as a process of influencing others to accomplish goals and direct organizations to change and new visions. When the word “leader” is mentioned, people automatically describe this word as a synonym for positional power or boss. I believe that if boss is always categorized with leader, then it has no meaning at all. Simply because being a boss does not always guarantee leadership. A great deal of individuals possess positions of authority and hardly contribute leadership.

A prime example of individuals who were once known as leaders and did not contribute leadership occurred when the Tyco scandal was exposed in 2002. Tyco is a diversified manufacturing and service company involved in fire protection and safety systems, electronic security services, electrical and electronic components, medical products, and engineered products and services. Tyco is a Bermuda based organization whose headquarters are in Bermuda (U.S. Securities and Exchange Commission, 2006).

According to the U.S. Securities and Exchange Commission (2002), “Tyco was faced with scandal when L. Dennis Kozolowski, the Chief Executive Officer and Mark Swartz, Chief Financial Officer, Executive Vice President and Director were indicted by a New York state grand jury for violations of antifraud, proxy statement, periodic reporting, and corporate recordkeeping provisions of the federal securities laws”.

From 1991 until June of 2008, L. Dennis Kozolowski and Mark H. Swartz took hundreds of millions of dollars in secret, unauthorized and improper low interest or interest free loans and compensation from Tyco. Swartz and Kozolowski concealed these transactions from shareholders. They also kept tens of millions of dollars by causing Tyco to avoid repayment of majority of their improper loans. Not only did Kozolowski and Swatrz keep...