Business-Case study on Tyco

A case study on Tyco

Review the following case study from your textbook: Case Study: Tyco. The case study references the six change images discussed in the course materials and seeks to understand how change management strategies can affect turnover. Subsequently, review the Case Analysis Rubric for information on how to write an analysis of a case study. Your case should be of sufficient length to address the issues and at least 3 pages, not including the title page and bibliography. Submit a Word document using correct APA formatting (6th edition).

 

 

Chapter 11 Skills for Communicating Change 345

 

Case Study Tyco

 

It’s not impossible to pay $2,200 for a wastebasket and $6,000 for a shower curtain,103 but when you claim them as company expenses, there will eventually be implications. This was precisely the situation that led to the misappropriation of $600 million that was allegedly stolen from Tyco and its shareholder- 104 a multinational corporation dealing in industries from hospital suppliers to fire sprinklers.105 At the beginning of 2002, it was uncovered that the then-CEO Dennis Kozlowski and his associate, CFO Mark Swartz, were using the company’s funds for inappropriate purposes. The official company stance on the scandal was reportedly, “Yes, they took the hundreds of millions—but the board let them do it.”106 In June 2005, Kozlowski and Swartz were convicted of conspiracy, fraud, and grand larceny107 and sentenced to up to 25 years in jail.108

 

Within the organization, morale was low. There was a sense of frustration among employees109 and when the new CEO, Ed Breen, stepped in to the top role at Tyco in July 2002,110 one of his major

Challenges was changing opinion of the corporation by communicating how the company was changing. The core business at Tyco was strong, so the focus of the change was never mediated by the possibility of bank- ruptcy.111 In this sense, Breen was fortunate, heading up a corporation with a strong operational and financial basis on which to rebuild the company after the tarnished reputation that Kozlowski left behind.112

 

THE WAY TO INTEGRITY AND A CULTURE OF ACCOUNTABILITY In order to change the organization’s practices, Breen initiated a turnaround team to modify unethical behavior.113 The first steps that were taken were symbolic gestures to show his determination to reinvent the company. Although he never openly commented on Kozlowski’s past behavior, his immediate replacement of board members spoke louder than words.114 By the end of 2002, there had been a complete overhaul of the executive team, with every member being replaced.115 Without delay, Breen also made the move from Tyco’s Manhattan office to a standard office in New Jersey—his office overlooked a car park instead of Central Park.116 This symbolized that Breen was serious about changing the company and the leadership style of the past.

 

Through a letter to employees and shareholders, Breen stated that Tyco’s most important

commitment was to reinvent its credibility and integrity. A culture of accountability and good corporate

citizenship was promoted by the company117 and a change in the infrastructure of Tyco was of utmost importance. In order to flourish, it was crucial that the new management team re-create the way in which the organization functioned and the practices that they used.118 This was reportedly initiated through a push to implement six-sigma training to increase the efficiency and quality of the company’s services and products.119 The dilemma was in how to communicate this change and the company’s new ethical stance to the 260,000 employees worldwide.120

 

THE WAY CHANGE WAS COMMUNICATED The main way in which Tyco planned to communicate its new policies in relation to ethical issues was through the development of a Guide to Ethical Con- duct of Employees that outlines the regulations for the organization with regard to harassment, fraud, conflicts of interest, and compliance with laws.121 The Guide was translated into the 26 languages that were spoken in Tyco.122 An advisor from another company that had been through a similar process said, “if you want to change the hearts of the 260,000 people here as to the ethical climate they are working in, you need to bring to life this document.”123 In order to do this, the Guide, which was launched worldwide using a mini–Web site, 124 illustrated problematic situations using vignettes. These vignettes were dramatized by the use of six short videos.125

 

The new code of ethical conduct was implemented in meetings around the globe in May through June 2003;126 more than 2,000 Tyco locations showed the videos alongside of corporate management making visits to Tyco sites.127 As Jorgensen outlines, “To roll out the program, 500 human resources professionals trained approximately 20,000 managers, who, in turn, cascaded the information through the employee base.”128 In conjunction with this, a monthly newsletter pro- vided employees worldwide with a column titled “A Matter of Principle” where they could submit questions on ethical issues, which were then answered