Tyco Tugas

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Business Ethics

Budiman Kusmanto

Maria Anastasia Rosalin

Suryadi Kusmanto

Tyco International

Presented for

Business Ethics Tyco International

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Company BackgroundABOUT Tyco International

Founded in 1960 by Arthur J. Rosenberg

Focusing as investment holding company

on solid- state science and energy

conversion

Acquisition of more than 16 companies

from 1968 1982

Diversify its business segment in 1982 to

three business sectors (fire protection,

electronic, and packaging)

In 1992 Dennis Kozlowski appointed ascompanys CEO

From 1990 2002, Tyco has acquired

more than 1000 companies with over

than $62 billion value

From 1994 2002, Tyco has completed

100 deals with average value of $800

million

In 2002, Dennis Kozlowski resigned as

company CEO

In 2005, Dennis Kozlowski was

sentenced 25 years in prison In 2007, Tyco improved ethical standard

company with Edward Breen as CEO

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Historical Facts


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Tyco Timeline



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Kozlowski Rise and Fall

Tyco earnings grew 25% each year

During 1999, Tycos stock price grew 65%

Debt to Equity ratio nearly double from 25% to 47% in one year (2001)

What now?


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Relationship Chart



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loan forgiveness

program

private stock fund receive $20 mil for

CIT acquisition without

boards knowledge

receive $750k for

supplying Cessna

aircraft

used $2.5 mil in Tyco

fund for home purchase

accepted cashand stock


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What makes TycoBeing Un-Ethical

Theft of more $150 million from the

company

Interest-free or very low interest loans

for employees (sometimes disguised asbonuses)

Selling companys stock without telling

investors

Concealed their illegal actions from eyes

of shareholders and board members

(falsifying business record)

Extravagant company spending Tax evasion

Bribery



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What makes TycoWent Wrong

Wrong and unethical decisions

Lack of control (hedonism)



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Leadership

Lack of internal control system

Weak organizational culture

(larceny / theft and conspiracy)

Management


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Ethical POV

Teleology Egoism Utilitarism



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Deontology Relativist Virtue Ethics

Justice

Ethical Philosophies


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Ethical POV



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Leadership Style And Corporate Culture

Coercive Afflictive

Authoritative ExactingApathetic

Caring IntegrativeHigh

High

Low

Low

Democratic

Pacesetting Coaching

6 Leadership Styles* Concern for Performance

* Daniel Goleman

Concern for People


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Tycos actionNow and AfterChange! Change! Change!

It is a known fact that after Tyco received many negative image from its predecessor from scandalous fraud, lavish spending, and

falsifying book record. However Tyco havent give up on their belief to become the company that everyone including stockholders

could trust, from their new slogan A vital part of your world, Tyco has given its best effort to change.

Edward Breen took the reins at Tyco and

turn a catastrophic mess into a bright

future.

Presence ofStrong Leader

Tyco has given award for making a drastic

changes of replacing board members in

the present of management s scandal.

BoardReplacement

Committed to contribute to a sustainablecompetitive advantage in the market by

integrating minorities to support their growth.

SupplierDiversity

Tyco has published Tyco Guide to EthicalConduct to issue forward and bring out

the companys core values.

Tycos Guide to Ethical Conduct



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www.tyco.com


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ConclusionWhat We Learn

Ethical Leaders are role models for the

organizationals value

An organizations structure is important

to the study of business ethics because

the various roles and job descriptions

that comprise that structure may create

opportunities for unethical behavior

Kozlowski was an example of a

charismatic leader that went wrong way

to fulfill his ambitions and personal

interest which cause stockholders,

employees and company to suffer.



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THANK YOU

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