THE RISE OF DENNlS

THE RISE OF DENNlS
Read Case Study 20, “Tyco: I’m Sure That It’s a Really Nice Shower Curtain.” Summarize the overall viewpoint of the author, and discuss the major issues presented in the case. Review the Questions for Thought. Answer these three questions using the busine
THE RISE OF DENNlS._KQZLQWSKI
On .’»’l.a’_v 18, 2002, Tyco CEO Dennis Kozlowslci, who had received his degree in ac-
counting and finance from Seton Hall University in 1968, gave the comrnencement
address to St. Ansel1n’s College in Manchester, New Hampshire. He talked about the
difficult decisions that the graduates would have to address during their lifetime. He
stated that the graduates would have questions that would test their moral standards.
He told the students that the questions would get tougher and the potential conse-
quences would be more severe, so his advice was to do not the easy thing, but the right
thing.l Less than two weeks later, on June 1, 2002, Dennis Kozlowslci, who had
worked at Tyco since 1975, announced to the board of directors for Tyco Interna-
tional that he was the subject of a criminal investigation in New York for evasion of
sales taxes on a painting he had purchased in Manhattan. The board of directors de-
manded that he step down as CEO ofTyco, and he did on June 3, 2002. ‘l3rco told the
media that Kozlowski had resigned for “personal reasons.” By resigning and not being
fired, Kozlowski was no longer eligible for a severance package that was valued at ap-
proximately $120 million. Previous Tyco CEO John Fort took over as interim CEO.
Fort, ‘.I.’_vco’s CEO from 1982 to 1992, had stopped using the company jet and sold off
the prcsident’s house and other corporate-held apartments during his first reign. In an
ironic example of déj E1 vu, Fort, who was on the board of directors of Tyco, had to ad-
dress the same issues in 2002 that he dealt with in 1982.2

THE FINANCIAL TROU.BL_ES._B.ECiIN…..

It was not a pleasant time for Tyco because it had lost $86 billion in market capitaliza-
tion because of concerns investors had about the company’s strategic focus. In addition,

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