Case Study 4 Tyco International - Business and Professional...

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Business and Professional Ethics Case Study 4: Tyco International The Tyco International scandal set the standard in the new millennium for fraudulent activities and unethical behavior by worldwide corporate business. While Tyco began in the 1960s as a holding firm, and developer of medical supplies and technology, as they grew they began to expand their horizons. In 1964 Tyco moved into the commercial sector to become a publicly traded company. During this phase they acquired another 16 companies by 1968. From 1973 to 1982 the company grew from $34 million to $500 million dollars, and was then divided and recognized as three separate business sectors: Fire Protection, Electronics, and Packaging. Through the acquisitions and rise of Joseph Gaziano as CEO they company made the moves for growth and expansion leading up to 1982 when Gaziano was diagnosed with cancer. Dennis Kozlowski was an auditor for SCM when he was invited to meet Gaziano in 1975. He was entranced by the CEO. He led a lavish lifestyle: private jets, a private helicopter, and three luxury apartments filled with the most outlandish items Kozlowski had seen. Kozlowski came from simple beginnings, so wealth and success fueled his passion to succeed. Gaziano ran the business fast and wild. He wanted the wealth and growth to be a reflection of his success and his genius. He was able to earn some of that credibility. Nearing the end of his run as CEO, before he fell ill, he attempted to acquire some successful companies and failed miserably. This tainted the perception of the company and his reputation. In 1982, when
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Gaziano fell ill and had to step down as CEO, John Fort III began to run Tyco. Kozlowski became concerned when this change occurred because Fort was a polar opposite of Gaziano. He immediately came in and eliminated outlandish ventures and expenses, the lavish luxury of business Gaziano has accustomed the Tyco people to, and decided that growth was no longer a concern. Tyco’s number one concern now was profitability and to “increase earnings per share.” Under Fort, Kozlowski began to thrive as well. He was driven to succeed and made himself the true definition of a “business man”. Under Fort he assumed leadership of Tyco’s
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