Tyco International: Leadership Crisis in Business Ethics.

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Tyco International: Leadership Crisis in Business Ethics. What role did Tyco’s corporate culture play in the scandal? One could almost argue that the Tyco corporate culture is part of the reason for the scandal. When Dennis Kozlowski started at Tyco in 1975, he saw that the CEO that mentored him (Joseph Gaziano) enjoyed a lavish lifestyle that was charged to the company. Kozlowski quickly became accustomed to perks like company jets, cars, vacations and country club memberships. When Gaziano died in 1982, his replacement (John Fort) had some very different ideas and directions for Tyco that were more circumspect and economical. Kozlowski was not on board with the forced paradigm shift and continued to do things his way. He eventually became CFO and continued to butt heads with Fort. Several years later, Kozlowski lobbied to the board members over a large acquisition that Fort felt was too risky. Having dollar signs in their eyes, the board sided with Kozlowski. Fort resigned as the CEO but remained on the board of directors for many years after. Kozlowski became the new CEO of Tyco, continuing their ongoing expansion and take-overs. He was rewarded by the board with an increased salary to 2.1 million and stock. He then rewarded special handpicked board members with millions in stock, homes, interest-free loans and bonuses. Kozlowski and the board set up shop in a swanky Manhattan office but let the public believe that they were located in in Exeter, New Hampshire with the rest of the company. As revenues, mergers and acquisitions grew, so did Kozlowski’s salary. By 1999 he was making 170 million dollars, making him the second highest paid CEOs in the US. The shareholders were thrilled and the workers who suffered through cutbacks were miserable. As someone who has been laid off twice in the past ten years, I often wonder if the

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