Tyco International Case Study Summary

1.0 Summary of the Case Study

A Tyco International company is one of the international companies who had involved in the corporate scandal and corporate excess that finally lead to the fall of the company during the David Kozlowski’s era. Some of the boards of directors of Tyco International found guilty on several wrongdoings like misuse the company’s assets for personal use, stole more than $430 million through fraudulent stock sales, grand larceny, fabricating business record and others.

David Kozlowski being appointed as the Chief Executive Officer (CEO) of the Tyco International after Fort resigned as CEO due to the disagreement between him and Kozlowski. Due to enthusiasm of Kozlowski in managing the company and able to revived the Kendal

Besides, most of the culprit also was fired and resigned from the Tyco International like CEO and CFO of Tyco which is Kozlowski and Swartz found guilty on 22 out of 23 counts of grand larceny, conspiracy and forging business record and violating of business law. They need to pay $134 million to Tyco and imprisoned 8 to 25 years.

After resignation of Kozlowski, Edward Breen was appointed as CEO. In order to combat with the problems created by previous CEO, Breen had restructuring again the company. He had reviewing the company’s accounting and corporate governance practice within the company. At the annual meeting, the shareholder elected new board of directors. Besides, company also hired Eric Pillmore as Vice President of Corporate Governance to nurture the ethical conducts among employees. Finally, under Breen’s era, Tyco able to stand up again as it able to make comeback and remove the negative reputation and image.

1.1 Tyco International History

Gaziano in 1973. Besides according to Tyco (2015), Tyco was listed in the New York Stock Exchange (NYSE) in 1974 and Tyco had a larger and more various corporations with sales topping $500 million and a net worth of nearly $140 million that was contributed by the acquisitions of Simplex Technology, Grinnell Fire Protection Systems, Armin Plastics and the Ludlow Corporation.

In 1982, Gaziano died and was replaced by the John. F. Fort and under him Tyco divided the company into three business sections comprise of Fire Protection, Electronics, and Packaging. But in year 1986, Tyco had reorganized again the company into four fragments which are electrical and electronic components, healthcare and speciality products, fire and security and flow control and able to acquisition of Grinnell Corporation, Allied Tube and Conduit, and the Mueller Company (Tyco, 2015).

In 1992, due to disagreement of Fort and L. Dennis Kozlowski that led to resignation of Fort, Kozlowski became the new CEO of the company. Under the Kozlowski’s empire, the company changes its name to Tyco International Ltd. In 1990s many of company acquired by Tyco which are Kendall International, AT&T Corp., Keystone International Inc., and Bermuda-based ADT Limited. In year 1998, another acquisitions include American Home Products ' Sherwood-Davis & Geck division and United States Surgical Corporation and Raychem Corporation is also