Subject category:
Strategy and General Management
Published by:
IBS Research Center
Length: 20 pages
Data source: Published sources
Topics:
Manufacturing and services company; Fire and security; Electronics, health care, engineered products and services; Market leader; Unethical accounting practices; Governance issues; Change of leadership; Break up or spin-off; Organisation restructuring; Dennis Kozlowski; Edward Breen; Six Sigma; Turnaround; Corporate culture
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Abstract
In 2006, Tyco International Limited was a US$40 billion diversified manufacturing and services company which operated in four business segments: (1) fire and security; (2) electronics; (3) health care; and (4) engineered products and services. Tyco shifted its operations to Bermuda when it operated from New Jersey while its administrative and executive functions were conducted from New York and New Hampshire. Tyco had operations in more than 100 countries and employed 260,000 people worldwide in 2006. Dennis Kozlowski became Chief Executive Officer (CEO) in 1992 and left the company in 2002 charged of unethical accounting practices, governance issues and fraud against the company''s shareholders. In August 2002, Edward Breen became the CEO and brought about major changes at Tyco. He rescued the company from a liquidity crisis and reduced the debt to US$10 billion by January 2006 from US$ 28 billion in 2002. He brought about the turnaround of the company by improving the operations efficiency through Six Sigma and closing the unproductive units. The case discusses why a conglomerate restructured itself through spin-off strategy to focus on its core business and increase its stock price by gaining the investors'' confidence. The case highlights whether a three way split was the solution for Tyco''s operational problems and whether it makes the job easier for the company. The leadership of Breen and the strategies adopted by him have helped overcome the financial crisis. The emphasis of the company has changed to have more focus on achieving core competence.
Location:
Industry:
Size:
Revenues (2006) USD40 billion
Other setting(s):
2005-2006
About
Abstract
In 2006, Tyco International Limited was a US$40 billion diversified manufacturing and services company which operated in four business segments: (1) fire and security; (2) electronics; (3) health care; and (4) engineered products and services. Tyco shifted its operations to Bermuda when it operated from New Jersey while its administrative and executive functions were conducted from New York and New Hampshire. Tyco had operations in more than 100 countries and employed 260,000 people worldwide in 2006. Dennis Kozlowski became Chief Executive Officer (CEO) in 1992 and left the company in 2002 charged of unethical accounting practices, governance issues and fraud against the company''s shareholders. In August 2002, Edward Breen became the CEO and brought about major changes at Tyco. He rescued the company from a liquidity crisis and reduced the debt to US$10 billion by January 2006 from US$ 28 billion in 2002. He brought about the turnaround of the company by improving the operations efficiency through Six Sigma and closing the unproductive units. The case discusses why a conglomerate restructured itself through spin-off strategy to focus on its core business and increase its stock price by gaining the investors'' confidence. The case highlights whether a three way split was the solution for Tyco''s operational problems and whether it makes the job easier for the company. The leadership of Breen and the strategies adopted by him have helped overcome the financial crisis. The emphasis of the company has changed to have more focus on achieving core competence.
Settings
Location:
Industry:
Size:
Revenues (2006) USD40 billion
Other setting(s):
2005-2006