Tyco

It'snotimpossibletopay$2,200forawastebasketand$6,000forashowercurtain,butwhenyouclaim
themascompanyexpenses,therewilleventuallybeimplications.Thiswaspreciselythesituationthat
ledtothemisappropriationof$600millionthatwasallegedlystolenfromtycoanditsshareholders,a
multinational corporation dealing in industries from hospital suppliers to fire sprinklers. At the
beginningof2002,itwasuncoveredthatthethenCEODennisKozlowskiandhisassociates,CFO
MarkSwartz,wereusingthecompany'sfundsforinappropriatepurposes.Theofficialcompanystance
onthescandalwasreportedly,Yes,theytookthehundredsofmillionsbuttheboardletthemdoit.
Withintheorganizationmoralewaslow.Therewasasenseoffrustrationamongemployeesandwhen
thenewCEO,EDBreen,steppedintothetoproleatTycoinJuly2002,oneofhismajorchallenges
waschangingopinionofthecorporationbycommunicatinghowthecompanywaschanging.Thecore
businessatTyco wasstrong,sothefocusofthechange wasnevermediated bythepossibility of
bankruptcy.Inthissense,Breenwasfortunate,headingupacorporationwithastrongoperationaland
financial basis on which to rebuild the company after the tarnished reputation that kozlowski left
behind.
THEWAYTOINTEGRITYANDACULTUREOFACCOUNTABILITY
Inordertochangetheorganization'spractices,Breeninitiatedaturnaroundteamtomodifyunethical
behaviour.Thefirststepsthatweretakenweresymbolicgesturestoshowhisdeterminationtoreinvent
thecompany. AlthoughheneveropenlycommentedonKozlowski'sp[astbehavior,hisimmediate
replacement of board members spoke louder than words. By the end of 2002, there had been a
completeoverhauloftheexecutiveteam,witheverymemberbeingreplaced.Witho0utdelay,Breen
alsomadethemovefromTyco'sManhattanofficetoastandardofficeinNewJerseyhisoffice
overlookedacarparkinsteadofCentralPark.ThissymbolizedthatBreenwasseriousaboutchanging
thecompanyandtheleadershipstyleofthepast.
Throughalettertoemployeesandshareholders,BreenstatedthatTyco'smostimportantcommitment
wastoreinventitscredibilityandintegrity.Acultureofaccountabilityandgoodcorporatecitizenship
waspromotedbythecompanyandachangeintheinfrastructureofTycowasofutmostimportance.In
order to flourish, it was crucial that the new management team recreate the way in which the
organizationfunctionedandthepracticesthattheyused.Thiswasreportedlyinitiatedthroughapushto
implement sixsigma training to increase the efficiency and quality of the company's services and
products.Thedilemmawasinhowtocommunicatethischangeandthecompany'snewethicalstance
tothe260,000employeesworldwide.
THEWAYCHANGEWASCOMMUNICATED
ThemainwayinwhichTycoplannedtocommunicateitsnewpoliciesinrelationtoethicalissueswas
throughthedevelopmentofaGuidetoEthicalConductofEmployeesthatoutlinestheregulationsfor
theorganizationwithregardtoharassment,fraud,conflictsofinterests,andcompliancewithlaws.An
advisorfromanothercompanythathadbeenthroughasimilarprocesssaid.ifyouwanttochangethe
heartsofthe260,000peoplehereastotheethicalclimatetheyareworkingin,youneedtobringtolife
thisdocument.Inordertodothis,theguide,whichwaslaunchedworldwideusingaminiWebsite,
illustratedproblematicsituationsinthisareausingvignettes.Thesevignettesweredramatizedbythe
useofsixshortvideos.
ThenewcodeofethicalconductwasimplementedinmeetingsaroundtheglobeinMaythroughJune
2003;morethan2,000Tycolocationsshowedthevideosalongsideofcorporatemanagementmaking
visitstoTycosites.Inconjunctionwiththis,amonthlynewsletterprovidedemployeesworldwidewith
acolumntitledAMatterofPrinciplewheretheycouldsubmitquestionsonethicalissues,whichwere
thenansweredandpublished.Usingthismodel,Tycoiscreatingacontrollershipguidetoaccounting
standardsforthefirmandhopingtogainmorecredibilitywithinthecommunitythroughreinforcing
lawfulorganizationwidepractices.

Questions:
1)
DescribehowtheturnaroundteammayhaveusedGerardandTeurfs'transformationskillsto
overcomethefrustrationsofemployees.
2)

Tycousedvignettestocommunicatechangesinethicalbehavior.Writeavignettethatcouldbe
usedbyTycotoassistinovercomingtheculturalchangebarriersthatcompanieslikeTyco
faced.

3)

UsingFordandFord'sfourtypesofchangeconversations,describehowTycowouldgothrough
theprocessofcommunicatingchangetoitsstaff.

4)

ImagineyouaretheCEOofTyco.TheformerCEOisstillontrialforfraudandyouaretrying
to rebuild the company's corporate reputation. Write a script for your address to the
shareholdersafter18monthsintheposition.Payattentiontotheappropriateuseofmetaphors
inyourchangeconversationtothisgroup.

5)

Roleplaythisscriptinclass.Whatlessonsemergefromthisexercise?

ans1.The turnaround team would have used Teurf and Geralds transformation skills as it would
have enabled them to listen to their employees more, it would create a more productive dialogue
and also community building for change (Gerschel, A & Polsky, L 2010). The use of these
transformational skills would have overcome frustrations as it produces an open atmosphere of
trust, it discloses misinterpretation and it enables the employees to listen and emerge new
perceptions. By using these transformational skills the employees will be free to provide their
opinions to the senior and they can be able to trust them because they will be having an open
communications system whereby the opinion of each and every one of them is considered as
important and given great value. With this skills in use the employees frustrations will be over and
they will be ready to change into the new environment knowing that they can trust their seniors
and be able to questions those places that they misunderstood.
2. The vignette that would be used by Tyco in order to assist in dealing with cultural change barrier
that them company was facing was by interpreting the ethical guidelines into the 26 languages
which are spoken in Tyco. In order to avoid cultural barriers interpreting the ethical guidelines
would be very important because each and every person who worked with the company would be
able to understand all the guidelines in their different languages. Another important way in which
the vignette would be made in order to avoid the cultural barriers is by making sure that the
guidelines are the same for each and every one and that there is no one who is discriminated by
these guidelines either in form of gender, race, ethnicity or religion. The international issue that
needs to be taken into account is the languages whereby the guidelines need to be written in the
26 languages that are spoken in Tyco so that each and every person is able to understand the
guidelines clearly in order to avoid misunderstanding.
3. Ford and Ford four types of change conversation do not view communication as a tool for
producing organizational intentional change but argue that change can occur through four types of
conversations that is initiative, understanding, performance and closure (Ford, J 2009). Using Fords
four types of conversations, Tyco would have started by initiative conversations which are to start
change. By starting change, Tyco would have started by initiating that they need to gain financial
control of the company. In order to do this the company would have changed all the practices that
were affecting the profitability of the company and make sure that they initiate new initiatives. The
second change conversation is understanding which is producing awareness. In order to
communicate change to the staff, Tyco would have made it known to the staff the reason as to why
they needed change and how the company was going to do in order to incorporate change
4. It is important to let the staff be aware of why the company needs change so that they can be
performing their responsibilities towards accomplishing a certain objective. The third conversation
is performance which generates action. By communicating performance, Tyco will be able to
explain to the staff the actions that they are supposed to perform so that the change can be
achieved. This can be done by letting the staff members know what they need to work towards
achieving so that their actions can be directing to implementing the change in the company. The
fourth conversation is closure which provides completion. Tyco would have explained to the staff at
what point the change would be achieved and when the completion was to be reached.