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Examining a Business

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Examining a Business Failure
George Konstantinopoulos
Organizational Leadership - LDR 531
August 09, 2011
Milton Wingert

Examining a Business Failure
The purpose of this paper is to examine a large corporation that has excelled in their perspective industries and then unexpectedly failed, lost industry credibility or was force into bankruptcy. Leadership contrasts will be discussed between the failed companies versus the rebuilt companies. There are many examples that can be used but the TYCO Corporation will be used in this paper as it is a clear example of poor leadership that made unethical decisions. It is difficult to say exactly what the thought process was for each of the executives involved but one can speculate the a major factor was greed and self gratification.
Tyco Corporation is a large company operating in over 100 countries. They are a major player or maker in the electronic components industry, undersea telecommunications systems, fire protection systems, electronic security systems and specialty valve as well as disposable medical products (Obringer, 2005). The three main executive that were involved in the fraud scandal were Chief Executive Officer, (CEO) Mark Koslowski, Chief Financial Officer, (CFO) Mark Swartz, and General Counsel, Mark Belnick.
The fraud occurred when the three executives were accused of giving themselves interest free or very low interest loans by the company. These loans were never approved by the Tyco Board of Directors nor were they ever repaid. They were sometimes disguised as bonuses to the executives (again never approved by the board) and covered up in unethical accounting practices. Both Koslowski and Swartz were also brought up on charges by the Security Exchange Commission (SEC) in September of 2002 for Corruption, Conspiracy, Grand larceny, and falsifying records. Both men had sold over seven

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