Jagannath University

Semester: Fall- 2020

Program: MBA (Eve.)

Assignment No: - 01
Chapter No : 11 (Eleven).
Assignment Topic : Corporate Performance, Governance and Business Ethics.
Course title : Strategic Management.
Course code : FIN-6304.
Batch No : 18th, Section-A.
Department : Finance & Banking,
Program : MBA (Evening).

SUBMITTED TO:
Farzana Nasreen
Lecturer
Department of Finance
Jagannath University, Dhaka

SUBMITTED BY:
Group No-11
SL
Students’ Name Students’ ID Batch No Section Remarks
No
01 Rima Akter M19180203711 18th A
02 Afroja Akter M19180203731 18th A
03 Sayed Rafsun Jany M17100203380 10th B

Date of Submission: 25th December 2020.

Page
SL Table of Content No

i
  Chapter-1 : Introduction 1-3
1.1 Introduction 2
1.2 Objectives of the Report 2
1.3 Methodology 2
1.3.1 2
Type of report
1.3.2 Sources of data collection 2
1.4 Scope of the Report 2-3
 Chapter-2: Closing Case Discussion of Tyco Int. co 4-10
2.1 Case Description: Case study on the rose and fall of Dennis Kozlowski! 5
2.2 Answer of Case Question (1-4) 6-10
2.2.1 1. Under the leadership of Dennis Kozlowski, Tyco grew rapidly for a decade. Why do you think 6
pursued his growth through acquisition strategy? How did it benefit Tyco? How did it benefit
Kozlowski?
2.2.2 2. What do you think leads top managers to engage in accounting manipulation to pad earning, as 7
apparently happened at Tyco?
2.2.3 3. During the period when Tyco’s profit were apparently overstated to the tune of $ 1.5 billion, its 8
account were audited every year by a major independent accounting firm that signed off on
them. Why do you think that the accounting firm did not catch the manipulations Tyco?
2.2.4 4. Why do you think Kozlowski and Swartz, both bright successful businessmen, engaged in the 9
behavior that they did? What motivated them to take such risks? How risky do you think they
thought their behavior was?
2.3 Case summary 10
Chapter-3:
Findings cause of failure of Tyco & possible managerial initiative 11-29
to improve condition.
3.1 Regulatory Findings of Tyco Int. Co. 12
3.2 Possible Managerial Initiative: 12
3.2.1 Corporate Governance: 12
Elements of Good corporate government 12
Golden Rules (Ethics, goals, organization, reporting, strategic management) 14
3.2.1.1 Business Ethics 14
3.2.1.2. Congruence of Goals 14
3.2.1.3 Organization: 14
3.2.1.4. Reporting 14
3.2.1.5. Strategic management: 15
3.2.1.5.1. Position analysis on the basis of---- 16
A Internal analysis and strategic capability & its process 16

B The external analysis and competitive position & Its process 16

B.iii
Porter Five (5) Forces Model Analysis.
17

ii
 Tyco International Porter Five (5) Forces Analysis
18
B.iii.a Threats of new entrants, Strong factor, week factor & possible initiatives 18
B.iii.b Threat of Substitute Products, High threats, low threats, possible initiatives 19
B. iii. c Rivalry among existing firms: High threats, low threats, possible initiatives 20
B. iii. d Bargaining Power of Suppliers, High threats, low threats, possible initiatives 21
B. iii. e Bargaining Power of Buyers, High threats, low threats, possible initiatives 21
B. iii. f Limitations of Porter’s Five Force Model 22
C Stakeholder Analysis 22
C. i Weighting the stakeholders 24
3.2.1.5.2. Formulation of strategy for Tyco Intl. co 26
A Generating strategic options: 26
i. The cost leadership with Advantage & dis advantage 26
ii. Differentiation Strategy with Advantage & dis advantage 26
iii. Focus Strategy 27
B Evaluating and selecting the suitability option 27
3.2.1.5.3. Implementing the strategy 28
3.2.1.5.4. Monitoring & controlling progress: 28
Pictorial presentation of Strategic Management process with golden rules of
corporate governance
29
Chapter-4: Findings and Recommendation Conclusion 30-31
4.1 Findings 31
4.2 Recommendation 31
4.3 Conclusion 31
4.4 Reference & Appendix; 31

iii
 Chapter-1: Introduction

1
1.1 Introduction:
Corporate image, or reputation, describes the manner in which a company, its activities,
and its products or services are perceived by outsiders. In a competitive business climate,
many businesses actively work to create and communicate a positive image to the
customer. Tyco Int. co works on public money so they should have positive image on
public mind so that public can rely on them.
1.2 Objectives of the Report:
 To highlight the role of corporate governance & ethical practices inside the
organization to development a good corporate environment.
 To give a bird’s eye view of Monitoring, Investigation on case study on Tyco int.
company in fall & rise era.
 To relate the theoretical learning with the real life situation.
 To assemble various policies, procedure and practices regarding image of the
organization.
 To formulate recommendations for possible improvement.
 To suggest some remedial strategic application for regaining the lost public image & to
improve the value in financial market & consumers market.

1.3 Methodology:
We have used different types of method, to prepare this report. From our textbook, from
group discussion, taking help from the experienced people, different journals, articles,
visiting different website, and corporate governance academic course. Also use analytical
method like –Five Porters forces model analysis, PEST analysis, Five golden rules in
corporate governance analysis & we related with strategic analysis for Tyco international
company.

1.3.1 Type of report:

This report is exploratory in nature focusing on quantitative analysis and descriptive in
nature using chats graphs and table representation.

1.3.2 Sources of data collection: We have collected data mostly from secondary
sources and a few from primary sources also.
 Different publication regarding corporate syndication.
 Different newsletters.
 Website search on Tyco inter. Company.
 Practical conversation with different people about different corporate incident &
behavioral practice.
 Text book case description on Tyco international company.

1.4 Scope of the Report:

In our whole report, we will focus the role of practicing corporate governance & ethics of
economic growth of a company. In here we have used our analysis both in strategically &
ethically. Corporate governance practice has a significant contribution for a company’s
well-meant. Without a good corporate governance a company fall into a great concern of
goodwill loss fail in smooth operational function that leads a great loss of profit and shorten
its sustainability. A Good governance practice helps to grow a company & help to gain

2
 competitive advantage over its rivals. To complete a reflective & informative report, we
studied different reports & seen a strategic analysis congruent with corporate Governance
ensures sound environment condition and leads a higher profitability to a company. The
study also explains the regulatory aspects of company manager & CEO. And this study is
descriptive in nature. But we have also faced few problems in completing this report:
 Lack of Information: As management systems & function are not disclosed clearly in a
Tyco int. company, there is lack of sufficient information for analysis. For this reason it is
difficult to analyze current situation of these reporting.

 Inexperience: Furthermore, we are addressing such an analysis on ethical issue and

corporate governance practice for the first time in post-graduation level. So, inexperience
is one of the main factors that constituted the limitation of the study.
 Analytical Barrier: Analytical problem of data is another important barrier that was faced
during the preparation of this study. Tyco organization has their descriptive case on the
unethical practice by former executives which present the lake of interest in corporate
governance practice. However, corporate governance practicing is mostly an internal
analysis & implementation inside a corporation. We had to relate the case analysis with
Michel porter’s five forces analysis which is an external analysis. So it is difficult to
accumulate and internal issue analyze with its external effect.

Even we could not accumulate all the available facts. However, we have tried our best to
prepare our report as good as possible within these limitations.

3
 Chapter-2: Closing Case Discussion of Tyco
Enterprise

4
  Closing Case (ch-11)

 Case study on Tyco: The rose and fall of Dennis Kozlowski!

 2.1 Case Introduction:

Under the leadership of Dennis Kozlowski, who became CEO of Tyco in 1990, the
company’s revenues expended from $3.1 billion to almost $40 billion. Most of this growth
was due to series of acquisitions that took Tyco intro a diverse range of unrelated business.
Kozlowski was initially lauded in the business press great manager who bought undervalued
asset and then enhanced their value by imposing tight financial controls at the acquired
companies. Certainly both profits and the stock price advanced at a healthy clip during much
of the 1990s.Tyco financed the acquisitions by taking on significant debt commitments,
which by 2002 exceeded $ 23 billion. As Tyco expanded some questioned the company’s
ability to service its debt commitments.
Others claimed that management was engaging in “accounting tricks” to pad its books and
make the company appear significantly more profitable than it actually was. Tyco’s defender
pointed out that its account were independently audited every year, and the outside
accountants had detected no problems, These criticisms, which were ignored for some time,
were finally shown to have some validity in 2002. When Kozlowski was forced out by the
board and subsequently charged with tax evasion by federal authorities.
Among other changes, authorities claimed that Kozlowski treated Tyco as his personal
treasury, drawing on company funds to purchase an expensive Manhattan apartment and a
world-class art collection that he obviously thought were befitting of the CEO of a major
corporation. Kozlowski even used company fund to help pay for an expensive birthday party
for his wife-which included toga -clad ladies, gladiators, a naked woman-with exploding
breast birthday cake and a version of Michelangelo’s David that peed vodka! Kozlowski was
replaced by a company outsider, Edward Breen. In 2003, after a special audit requested by
Breen, Tyco took a $1.5 million charge against earnings for accounting errors made during
the Kozlowski era (i.e. Tyco’s profits had been overstated by $1.5 million during
Kozlowski’s tenure). Breen also set about dismantling part of the empire that Kozlowski had
built, divesting several businesses.
After a lengthy criminal trial in June 2005, Dennis Kozlowski and Mark Swartz, the former
chief financial officer of Tyco, were convicted of 23 counts of grand larceny, conspiracy,
securities fraud, and falsifying business records in connection. With what prosecutors
described as the systematic looting of millions of dollars from conglomerate (Kozlowski was
found guilty of looting $90 million from Tyco). Both were sentenced to jail for a minimum of
eight years. As for Tyco, in 2006, CEO Ed Breen announced that the company would be
broken up into three parts, a testament to the strategic incoherence of the conglomerate that
Kozlowski built.

5
  Answer of Case Question (1-4)

 2.2.1 Case Discussion Question No: 1

Under the leadership of Dennis Kozlowski, Tyco grew rapidly for a decade. Why do you
think pursued his growth through acquisition strategy? How did it benefit Tyco? How did it
benefit Kozlowski?

 Answer:
 Actually Dennis Kozlowski, CEO of Tyco in 1990 as well as former chief financial
officer of Tyco, was engaged in “accounting tricks”. To pad its books and make the
company appear significantly more profitable than it actually was, Kozlowski lauded in
the business press as a great manager who bought undervalued asset and then enhanced
their value by imposing tight financial controls at the acquired companies. He also tried to
show up that company’s revenues expended from $3.1 billion to almost $40 billion which
most of this growth was due to series of acquisitions that took Tyco intro a diverse range
of unrelated business. Generally; Tyco financed the acquisitions by taking on significant
debt commitments, which by 2002 exceeded $ 23 billion. Moreover Kozlowski showed in
its pad books that companies’ profits had been overstated by $1.5 million. These
criticisms were finally revealed after 2002 and charged with tax evasion by federal
authorities.

 Tyco Enterprise was not benefitted to for long time. In contrast Enterprise Tyco was
charged a $1.5 million against earnings for accounting errors made during the Kozlowski
era (Since Tyco’s profits had been overstated by $1.5 million during Kozlowski’s tenure)
after a special audit requested by Edward Breen in 2003.

 That unethical business practices did not bring any benefit to Dennis Kozlowski for long
time. In contrast, it is seen that Tyco financed the acquisitions by taking on significant
debt commitments, which by 2002 exceeded $ 23 billion. It is observed that Dennis
Kozlowski used to have companies fund for his own best interest instead of stockholder’s
best interest. After a criminal trial in June 2005, Dennis Kozlowski was convicted of 23
counts of grand larceny, conspiracy, securities fraud, and falsifying business records in
connection. With what prosecutors described as the systematic looting of melons of
dollars from conglomerate where Kozlowski was found guilty of looting $90 million from
Tyco. Dennis Kozlowski was sentenced to jail for a minimum of eight years.

6
 2.2.2. Case Discussion Question No: 2
What do you think leads top managers to engage in accounting manipulation to pad earning,
as apparently happened at Tyco?

 Answer:
Leads top managers like CEO can use their authority & control over corporate fund to satisfy
their desire as the cost of return to stockholder & aiming to maximize risk capital
providers/shareholders return. The boards of directors are the centerpiece of corporate
governance system who are directly elected by stockholders. They keep valuable information
about the company’s activities. Without such valuable information the board cannot
adequately perform its monitoring function. But top managers’ desire for greater income,
power, job securities, and status lead them to engage in excessive Job-consumption and
corporate scandals. They eventually get engaged in buying and attaching with many new
businesses, in an attempt to increase the size of company through diversification & engaged
to Empire building. Although this poor business practice depress the companies long-run
profitability and thus shareholders return by long seeking the right balance between
profitability and growth.

An inside director are senior employee of the company such as CEO are full time employee
of the company.
On the other hand outside directors are not full time employees of the company. Many are
them fulltime professionals who hold position on the board of several companies. They need
to maintain reputation as competent under incentive to perform their task as objectively and
effectively as possible.

Critics of the existing governance system charge that inside director often dominate the
outsiders on the board. Because Inside director can use their position within the management
hierarchy to exercise & control over what kind of information and agenda the board receives.
Because insiders have intimate knowledge and control over information, they may be in
better position than outsiders to influence boardroom decision making, which may help
themselves to information asymmetry between principals and agents. Consequently they can
present information in a way that puts them in favorable light. Those unethical prices exactly
happened to Tyco enterprise by Dennis Kozlowsk and Mark Swartz.

Under corporate law The Board of Director shall work to represents the interest and act as an
agent on behalf of principal holders /shareholders of the company. The board can be held
legally accountable for the company’s action. BOD position in the apex of decision making
within company allow it to monitor corporate strategy decision and ensure that they are
consistent with shareholder interest. If board sense is that corporate strategies are not in the
best interest of stockholders, it can apply sanctions, such as voting against management
nomination to the board of director or submitting its own nominee. In addition the board has
the legal authority to hire fire and compensate corporate employees including most
importantly CEO. The board is also responsible for making sure that audited financial
statement of the company present a true picture of financial institution. Thus the board exist
to reduce the information asymmetry between stockholders and manager and monitor and
control management action on behalf of stock holders.

7
In 2002, the Surban oxley act (SOX) passed in the USA tighten rules corporate government
reporting and corporate governance. However; separating the role of chairman and CEO
limits the ability of corporate insider and particularly that of the CEO, to exercise control
over the board. Or chairman role goes to outsider or Board of director’s a minimum portion
of mandatory holding of stock could be a possible solution of this matter.

 2.2.3. Case Discussion Question No: 3

During the period when Tyco’s profit were apparently overstated to the tune of $ 1.5 billion,
its account were audited every year by a major independent accounting firm that signed off
on them. Why do you think that the accounting firm did not catch the manipulations Tyco?

 Answer:
The trading companies are required to file financial statement by Security Exchange
Commission (SEC) that oversees the financial market and accounting standard setting bodies,
according to generally Accepted Accounting Principles (GAAP) under standards setting
bodies Financial Accounting Standard Board (FASB) in USA. Many countries outside of
USA may follow another accounting standards namely International Financial reporting
System (IFRS) issued by International Accounting Standards Board (IASB). The purpose to
consistent, detailed and accurate information about how efficient and effectively the agents of
stockholders (managers) running the company.
To make sure that manager do not misrepresent the financial information the accounts be
audited by an independent and accredited accounting firm to ensure a faithful representative
accounting statement to investors. Such information enable a stock holder to calculate the
profitability to take the decision; Return on Invested Capital [ROIC= Net Income ÷ (Equity +
Debt)] where investors will take the decision on invest or not compering to that of
competitors ROE.

But sometimes a fair and accurate auditing report by a reputed auditors may mislead the
investors decision if there is created so much off balance sheet partnership by CFO or other
managers for their personal interest to hide the true state from public review known as
‘Gaming of financial statement’. That practice was done by Dennis Kozlowsk and Mark
Swartz. This intended false representation of financial statement is considered as direct
violation of fiduciary duty. In recent year the practice of gaming financial statement by
managers to present a distorted picture of their company’s finance investor’s has been
observed frequently. The typical motive has been to inflate the earning or revenues of a
company, thereby generating investor enthusiasm and propelling the stock price higher,
which gives managers an opportunity to cash in stock option grants for huge personal gain.
Obviously the expense stockholders who have been mislead by reports.

Sarban Oxley Act (SOX) set up a new oversight board for accounting firm, required CEOs
and CFOs to endorse their company’s financial statements, and barred companies from hire
the same accounting firm for auditing and consulting service.

8
2.2.4. Case Discussion Question No: 4
Why do you think Kozlowski and Swartz, both bright successful businessmen, engaged in
the behavior that they did? What motivated them to take such risks? How risky do you
think they thought their behavior was?

 Answer:
The answer to this question depends on a few generalizations are mentioned below:

a. Personal Ethics & business ethics: First it is important to recognize that business ethics
are not divorced from personal ethics, which are the generally accepted principals of right
and wrong governing the conduct of individuals. As individual, we are taught that it is
wrong to lie and cheat and right to behave with integrity and honor and standard for what
we belief to be right and true. The personal ethics code that guides our behavior come
from a number sources, Including i) our parents, ii) our school, iii) our religion and iv) the
media. Our personal ethical codes will exert a profound influence of the on the way we
behave as business people. An individual with a strong sense of personal ethics less likely
to behave in an unethical manner in a business setting; in particular, he or she is less
likely to engage in safe dealing and more likely to behave with integrity. Personal ethical
fundamental might absent in the philosophy of Kozlowski and Swartz. So that their desire
for greater income, power, job securities, and status lead them to engage in excessive Job-
consumption and in unethical business practices.

b. Unrealized Ethical Behavior: Secondly, Many studies of unethical behavior in a

business setting have come to the conclusion that business people sometime do not realize
that they are behaving unethically, primarily because that simply fail to ask the relevant
question; i) Is this decision for action ethical? Instead, they apply a straight forward
business calculation to what they perceive to be a business decision, for getting that
decision may also have an important ethical dimension. However, the fault here lies in
processes that do not incorporate ethical considerations into business decision making.
Those decisions were probably made on the basis of good economic logic. Kozlowski and
Swartz were very much fond of gaining self economic benefit rather than shareholder and
stakeholders interest.

c. Business Environment: Unfortunately, the climate in some business does not encourage
people to think the ethical consequence of business decision. This brings us to the third
cause of unethical behavior in business; and organizational culture de-emphasis business
ethics and considers all decision to be purely economic ones. Tyco enterprise business
environment most probably was assumed well until the joining of Swartz as a CFO in that
company. Unethical job consumption attitude and practice by previous executive Swartz
might directly or indirectly influence Kozlowski to focus on gaining his personal interest
like Swartz.

d. Unrealistic Goal: A related fourth cause of unethical behavior may be pressure from top
management to meet performance goals that are unrealistic, which can be attained by only
cutting corners of acting in an unethically manner. An organization culture can
“legitimatize “behavior that society would judge as unethical. Particular when this is

9
 mixed with a focus on unrealistic performance goals, such circumstances, there is a
greater than average probability that managers will violate their own personal ethics and
engage in behavior that is unethical. By the same token, an organizational culture can do
the opposite and reinforce the need for ethical behavior. We can get to observe that
Dennis Kozlowski, CEO of Tyco, was engaging in such activities to represent himself a
highbred & unrealistic target achiever although the Enterprise did not impose on them
any unrealistic target. Kozlowski himself was engaged with making his own benefit and
reputation by “accounting tricks”. He tried to appear company significantly more
profitable than it actually was, for this Kozlowski lauded in the business press as a great
manager who bought undervalued asset and then enhanced their value by imposing tight
financial controls at the acquired companies. Just for showing him an extra ordinary &
unrealistic goal achiever. He also tried to show up that company’s revenues expended
from $3.1 billion to almost $40 billion which most of this growth was due to series of
acquisitions that took Tyco intro a diverse range of unrelated business. Generally; Tyco
financed the acquisitions by taking on significant debt commitments, which by 2002
exceeded $ 23 billion. Moreover Kozlowski showed in its pad books that companies’
profits had been overstated by $1.5 million.
These criticisms were finally revealed after 2002 and charged with tax evasion by federal
authorities. Moreover After a criminal trial in June 2005, Dennis Kozlowski was
convicted of 23 counts of grand larceny, conspiracy, securities fraud, and falsifying
business records in connection. Dennis Kozlowski was sentenced to jail for a minimum of
eight years.

 2.3. Case summary: In this case study we take a close look at the government
mechanisms of Tyco int. company that its former two greedy executives were so much
busy at gaining personal interest instead of valuing other stakeholders interest. They
practiced unethical behavior in the corporation and destroyed good governance system of
the company. As a result company generally may fall in losses its productivity, rate of
return on equity capital (ROIC) of different investors (risk capital providers & creditors).
Company may also loss its goodwill in the marketplace and potential investors, potential
buyers & lost image to suppliers. However; we have seen the legal initiatives were also
taken against two former executives (Kozlowski and Swartz) for their unethical corporate
practice.

10
  Chapter-3:
Findings cause of failure of Tyco & possible
managerial initiative to improve condition.

11
 3.1 Regulatory Findings of Tyco Int. Co.
It is observed that Kozlowski was replaced by a company outsider, Edward Breen in 2003.
But already Tyco has established a very negative face in public media about the bad
incident of former executives by Kozlowski and Swartz which will generally lead to reduce
consumers & investor attraction toward Tyco enterprise. This goodwill loss also might lead
to fall its productivity and destroy corporate structure inside the organization. Tyco is now a
depressed organization which is under legal accusation of huge amount of financial penalty
and huge debt obligation. In this situation Tyco seems in going towards at the door of
possible liquidation or bankruptcy day by day. At this situation the new executive need to
take some necessary initiative to protect companies’ interest at any cost. Stockholders,
customers, employees are the prime stakeholders, has affected so much for this company
incident. Some strategic initiative that should have been taken by Kozlowski and Swartz
and should be followed by Edward Breen to protect Tyco’s decline, are discussed in later
part of this report.

3.2 Possible Managerial Initiative: To regain the positive face in market, Tyco should
establish good corporate governance & ethical practice (following 5 golden rules in
corporate governance & ethics) inside the organization by strategic management approach,
which can helps Tyco to fulfill all stakeholders interest & to analyze its current position in
market that will help to understand Tyco’s competitive advantage over its’ rival by Internal,
External, & Shareholder analysis. Good Corporate Governance must be in Bones &
Bloodstream that in turn replicated in the outlook of the Organization that is Culture &
Public Image.

Senior officer of Corporate Governance at IFC, Dr. Garvey said

“A firm with good Corporate Governance can attract a) higher investment premiums b)
have cheaper access to debt, c) can outperform its peers in the long run and d) Gain better
access to multilateral investors.” which are most important for firm to generate profit &
maximize wealth as well as maximum return of investments for stakeholders including
stock holders (risk capital providers), creditors, employees, customers etc.

 3.2.1 Corporate Governance: Corporate governance is the system of rules, practices

and processes by which a company is directed and controlled. Corporate governance
essentially involves balancing the interests of a company's various stakeholders, such as
shareholders, management, customers, suppliers, financiers, government and the
community. Corporate governance meets some obligation to society, employees, investor &
managerial obligation to company. Its prime objective is to reduce agency problem and
ensure a good & transparent agency relationship among principle & agents in all level of
business. It also focuses on Accountability, Transparency, Equality & Weighting
participation by different parties. however;

Good corporate governance elements:

1. A long term strategic goal can be achieved for Tyco through
a. Good business management: The board of Tyco needs to install all systems and
procedures to run the business effectively. To full fill the long term goal via successful

12
implementation of strategic plan (ex; formulate a properly developed strategy covering the
next three years to achieve). The directors of Tyco should take main concern about
Marketing/image, production/operation/comparative performance, financial structure,
personal/organization(division or duties: Leadership)

b. Good relation with shareholders: Company Tyco needs to establish special

mechanism to deal properly with the interest of the remote shareholder. (Relation between
board and, founder director or shareholders)

Example: Producing transparency in reporting. Using financial standard in reporting,

maintaining ethical behavior, avoiding material misrepresentation can ensure sound
reporting system.

2. Consider & care about the employees, past, present & future: Management of Tyco need
to concern about employees interest so that they do not agree to meet any unethical practice.
Like
• A three years resource plan
• A well define job description
• Generous remuneration packages
• Recruitment process
• Training & development
• Health & life assurance and pension agreements
• Internal communication
3. Take account of the needs of the environment and the local community: Tyco need to
take a concern about the effect of local community with companies operation.
• In General Terms: Clean operating system, Waste disposal
• In Specific Terms: Planning of Particular project.
4. Work to maintain excellent relations with both customers and suppliers: Management of
Tyco should work to increase profitability with maintain good relation with other
stakeholders. Like;-
• Attracting the customers: How to keep the existing customers and how to build a
relationship with them; how to attract new ones etc.
• Suppliers: Getting credit from important suppliers and building a reputation for
reliability.

5.Maintain proper compliance with all applicable legal and regulatory equipment: The
Company Tyco should concern about-

• An experienced professional to handle compliance with employment Law.

• A health and safety manager to cover the excess of legislation in this area.
• Auditors of the ability and size able to give the best professional advice for the
company’s specific needs and uncover major problems.
• Establish a good control system where no executive would get any scope to personal
gain.

13
Golden Rules of Corporate governance: A good practice of corporate governance ensures a
good Management function. It can help Tyco to formulate the strategic management. So a
good corporate governance practice by Tyco can be ensured by following ‘Golden Rules’ in
management process. They are Ethics, Congruence of goal, organization, Reporting &
strategic management. Described below:

 3.2.1.1. Business Ethics: According to Andrew Crane, “business ethics is the study of
business situations, activities, and decisions where issues of right and wrong are
addresses”. It is important for Tyco that employee should not only concentrate for their
profit but also for their ethical in order to build a good relationship and loyalty among
their customers and clients. Ethics represents a set of norms of standard behavior guiding
the employees to exercise on moral standard of honesty, loyalty and trust that have a
significant value in terms of the efficiency and effectiveness with which a business can
run effectively & increase its lifetime for a long term because of honesty, loyalty and co-
operation. Ethical issues included;

• Corporate social responsibility. Environmental/human right issue.

• Support for local community/ society in general. Honesty/ transparency.
• Fair treatment of staff. Customers feeling toward company. e.t.c
 Personal ethics & organizational ethics could be different for anyone. Corporate
governance role is to adjust those ethical dilemmas. Moreover it works to adjust Board
members ethical expectation with stakeholder’s ethical expectation.

 3.2.1.2. Congruence of Goals: A goal is precise & measurable desire future state that a
company must realize if it is to attain its vision or mission. An appropriate set of goals
properly reflecting the expectations of all stakeholders, weighting different stakeholders’
claim and focusing on their interest of Tyco.
 Corporate governance work to adjust companies agreed goal and stakeholder’s goal.

 3.2.1.3 Organization: An appropriate organization means the adoption of a proper

structure, effective communication channel, defining responsibility, leadership role,
management ability etc.

 Sources of conflict: Failure to ensure proper blend of interests of various stakeholders

within an organization and maintain open channel of communication with all of them.

 Corporate governance work to use appropriate organization, proper communication

channel, delegation of authority, strong leadership, a desired organization, which is
essential for Tyco.

 3.2.1.4. Reporting: Tyco need to have a system ensuring that information being passed
through communication channels is sufficient and accurate enough to satisfy all
stakeholders thereby confirming accountability and transparency.

14
 Source of conflict: Window dressing, Material Misstatement, Information Asymmetry,
With Board disclosure & Stakeholders’ Inference

 Corporate governance work to use financial standard in reporting, maintaining ethical

behavior, avoiding material miss representation, to ensure sound reporting system.
 3.2.1.5. Strategic management: strategy is a set of action related with company
missing and vision that manager take to increase the company’s performance. A
Strategic Management can be defined as a process having a clear and achievable goal, a
feasible strategy to achieve it, creating an organization appropriate to deliver, a sound
reporting system. It helps organization to maximize profit & wealth as well as to find out
a sustainable competitive advantage by strategy for strategy leadership, formulation &
strategy implementation.

 Sources of conflict: It fails, when management become failure to manage conflicts

among various interested groups in strategic management process.
 Managing the conflict by Tyco: Using stakeholder analysis, value chain analysis,
competitive environment analysis with ethical standard, and a balanced strategy can be
adapted or need to change previous strategy completely.

 Strategic Management Process on following Ethical standards of good corporate

governance.

 Strategic analysis process has described below in details;

15
Strategic Analysis includes; 1) Position Analysis. 2) Formulating Strategy. 3)
Implementation. 4) Monitoring, Strategic analysis on the line of ensuring good corporate
governance for Tyco Company is described below;

 3.2.1.5.1. Position analysis: It helps Tyco company to understand current position by the
Internal and external competitive environment analysis. It also helps to find out its
strength, weakness & stakeholders interest to set a suitable & achievable business goal
relating to company mission and vision. For a growing company the position analysis is
must to understand its competitive advantage which involved with A) Internal analysis,
B) External analysis & C) Stakeholder analysis. However; The position analysis are
described below in details:

A. Internal analysis and strategic capability: Generally it is done for several types of
purpose for company are described below:-

 Understand existing and potential resources available.

 To evaluate the business’s strategic capability.
 To assess its potential strengths and weaknesses.
 To identify opportunities for short-term performance improvement within the
existing strategy.

 Process of Internal Analysis for Tyco:-

i Review all ii. iii. Analyze iv. Compare v. Assess
value chain. balance of vii. Strategic
available Highlight and
resources capability of Internal
resources key benchmark
(use of resource Competitive
resources
(Product Balance advantage
(These are (Past
the building (Those which Cost efficiency performance People balance
Organizational/ (Identify key issues:
blocks of are likely to Industry
cultural balance)
yield Best practice)
the competitive
Effectiveness of 1. Strengths
company’s advantage) whole operation
operation) &
Control over 2. weaknesses)
resources)

B. The external analysis and competitive position for Tyco: The external Analysis
process that is made to:---
 Understand business environment of Tyco:
---current industry structure
---the nature of the competitive forces
 Evaluate the organization within Tyco’s industry structure:
---the business relative to competitors
---the ‘drivers of change’
 Summaries the key issues and assess Tyco’s competitive position
---opportunities and threats

16
 ---potential sources of competitive advantage
---short-term improvement potential within the existing strategy

 Process of External Analysis for Tyco:-

Nature of the Influences on Structure of Competitors Competitive

Strategic
market-place the competitive and the position
capability of
marketplace environment marketplace
External
(static vs (Host Competitive
changing) [Porter’s 5 Force] -Competitor company &
[PEST] analysis advantage
P= Political Rivals)
 Barriers to -Closest
E=Economical competitors (Identify key
S= Socio entry issues:
cultural  Power of 3. Opportunities
T=Technological buyers/sellers &
Analysis  Threat of 4. Threats)
Scenario substitute
planning.  Degree of Market
competitive segmentation
rivalry

To understand the opportunities & threats for Tyco, The new management should follow
entire external analysis process. But we would like to address here only Porter’s Five (5)
Forces Model Analysis which is belongs to the no iii) level of external analysis process.

iii) Porter Five (5) Forces Model Analysis in details:

Porter Five (5) Forces Model was proposed by Michael E. Porter in 1979. The purpose was to
assess and evaluate the competitive positioning and strengths of business organizations. The
model has three horizontal competitive forces (Threat of Substitute Products or services, the
threat of new entrants and rivalry among existing firms) and two vertical forces (Bargaining
power of buyers and bargaining power of suppliers).
These forces shape the competition within any industry. The overall industry competitiveness
declines when these forces reduce profitability. Porter found SWOT analysis. Many new
companies use the Porter Five (5) Forces Model to decide whether it is profitable to enter in a
particular industry.

Here is the pictorial presentation of the Porter Five (5) Forces Model:

17
  Tyco International Porter Five (5) Forces Analysis
Application of this model can help Tyco International to determine the industry
attractiveness and understand its competitive positioning in the market. The analysis could
have used by former executives & can be taken by new management to make some
strategically wise decisions that could improve the performance of Tyco International and
ensure long-term survival & defend from profitability loss. Forces are described below;

 B.iii.a. Threats of new entrants /Risk of Entry by Potential Competitors for Tyco:
Threat of new entrants reflects how new market players impose threats to the existing
market players like Tyco. In the mean-time there has much possibility to entrance of new
potential competitor which could be threat for Tyco int.com to loss significant brand
loyalty. However;

 Here are some factors that represent the high threat of new entrants for Tyco
International:

 If the industry will be profitable and barriers to enter the industry will be low & existing
regulations support the entry of new players it will attract more players and hence, the
threat of new entrants will be high.

18
 If building a distribution network were easy for new players.

 Retaliation from the existing market players is not a discouraging factor.

 If consumers intend to have alternative new brands due to weak brand loyalty or lack of
customer responsiveness from Tyco.

 Alternatively; the low threat of new entrants considers the following situation for Tyco
are described below;

 When Entry in the industry requires substantial capital and resource investment. This
force also loses the strength if product differentiation is high and customers place high
importance to the unique experience.

 Tyco International will face the low threat of new entrants if existing regulatory
framework imposes certain challenges to the new firms interested to enter in the market.
In this case, new players will be required to fulfill strict, time consuming regulatory
requirements, which may discourage some players from entering the market.

 The threat will be low if psychological switching cost for consumers is high and
existing brands, Tyco can establish a loyal customer base.

 New entrants will be discouraged if access to the distribution channels is restricted.

How Tyco International can tackle the Threat of New Entrants?

 Tyco International can develop brand loyalty by working on customer relationship

management. It will raise psychological switching costs.
 Tyco International can follow cost reduction strategy to gain economic of scale.

 Tyco int. can develop long-term contractual relationships with distributors to widen
access to the target market.

 Tyco International can also find out an investment in research and development
activities, introduce innovative products/services to set strong differentiation basis.

 B.iii.b. Threat of Substitute Products or services for Tyco: Substitute products are the
products from different business or industries can satisfy similar customer need. The
availability of substitute products or services makes the competitive environment
challenging for Tyco International. High substitute threat shows that customers can use
alternative products/services from other industries to meet their needs. Various factors
determine the intensity of this threat for Tyco International.

 The Threat of Substitute Products or services increases to Tyco, when;

 A cheaper substitute product/service is available from another industry.

 The psychological switching costs of moving for substitute products are low.
 Substitute product offers the same or even superior quality and performance as
offered by Tyco International’s product.

19
 However, this threat is substantially low for Tyco International when;

 The switching cost of using the substitute product is high (due to high psychological
costs or higher economic costs)

 Customers cannot derive the same utility (in terms of quality and performance) from
substitute product as they derive from the Tyco International’s product.

 How Tyco International can tackle the Threat of Substitute Products or services?

 Tyco International can reduce the Threat of Substitute Products or services by clearly
emphasizing how its offered product/service is better than the available substitutes.

 It should provide convincing reasons to the customers by offering a better experience

and high value for money.

 It can raise switching costs by working on loyalty.

 Lastly, it can improve the quality, maximize value for money and set strong
differentiation basis to discourage customers from using the substitute product.

 B.iii.c. Rivalry among existing firms: The Rivalry among existing firms shows the
number of competitors in the same industry that give tough competition to the Tyco
International. High rivalry shows Tyco International can face strong pressure from the
rival firms, which can limit each other’s growth potential. Profitability in such industries
is low as firms adopt aggressive targeting and pricing strategies against each other.

 There are some factors that increase the Rivalry among existing firms for Tyco
International
 The company will face intense Rivalry among existing firms if market players are
strategically diverse and target the same market. when their number or size is large.
 The rivalry will also be intense if very few customers exist for a large number of
producer /service provider exist in market that lead a declining demand.
 The rivalry will also be intense if customers are not loyal with existing brands and it is
easier to attract others’ customers due to low switching costs.
 If high fixed cost generated inside Tyco to operate the company.
 Competitors with equal size and offering undifferentiated products with slow industry
growth tend to adopt aggressive strategies against each other.
 These all factors make the Rivalry among existing firms a major strategic concern for
Tyco International
 The Rivalry among existing firms will be low for Tyco International if;
 There are only a limited number of players in the market

 The industry is growing at a fast rate.

20
  The products are highly differentiated, and each market player targets different sub-
segments

 The economic/psychological switching costs for consumers are high.

 The exit barriers are low, which means firms can easily leave the industry without
incurring huge losses.

 How Tyco International can tackle the Rivalry among existing firms?
Tyco International should focus on the implicit needs and expectations of its customers to
strengthen the differentiation basis.
 It should raise switching costs by developing long-term customer relationships.
 The organization should also invest in research and development activities to identify
new customer segments.
 In some cases, collaborating with competitors can be mutually beneficial. The
organization can look for this option as well.

 B.iii.d. Bargaining Power of Suppliers for Tyco: Suppliers are the organizations that
provide input such as material and labor into the industry.

 These suppliers are most powerful for Tyco when;

 The product supplied is vital to the industry and has few substitutes.
 When industry is not important customer to the supplier.
 Switching costs for companies in the industry are significant
 If supplier start to use their inputs in forward integration to produce and compete
with companies already in the industry.
 When suppliers are few and demand for their offered product is high, it strengthens
the suppliers’ position against Tyco International.
 If the employees of Tyco International are not well educated, do not have adequate
market knowledge and lacks the price sensitivity, it automatically strengthens the
suppliers' position against the organization.

 Contrarily, the bargaining power of suppliers will be low for Tyco International if:
 Suppliers are not concentrated
 Switching costs are low
 Product lacks differentiation
 Substitute products are available

 Tyco International is highly price sensitive and has adequate market knowledge

 There is no threat of forward integration by suppliers.

 How Tyco International can tackle the Bargaining Power of Suppliers?

 Tyco International can strengthen its position against suppliers by decreasing the
dependency on one or a few suppliers. It will increase its price sensitivity.

21
  Developing the long-term contractual relationships with suppliers from different
regions not only lowers their bargaining power but also allows Tyco International to
improve its supply chain efficiency.

 Finally, Tyco International can find the alternate ways of producing the product if
product demand is high enough and the firm has required competencies and
expertise.

 However, it requires detailed cost-benefit analysis to determine its feasibility.

Product redesign and diversification of the product lines can also help the
organization reduce the suppliers’ power in the market.

 B.iii.e. Bargaining Power of Buyers for Tyco: Industry buyer may be the consumers or
end users who ultimately uses the product or intermediaries that distribute or retails the
products. These buyers are most powerful. This force directly influences the Tyco
International’s ability to accomplish the business objectives. Strong bargaining power
lowers profitability and makes the industry more competitive. Whereas, when buyer
power is weak, it makes the industry less competitive and increase the profitability and
growth opportunities for Tyco International

 There are some factors that increase the bargaining power of buyers:
 A more concentrated customer base increases their bargaining power against Tyco
International
 Buyer power will also be high if there are few in number whereas a number of sellers
are too many.
 Low switching costs (economic and psychological) also increase the buyers’
bargaining power.
 In case of corporate customers, their ability to do backward integration. Backward
integration shows the buyers' ability to produce the products themselves instead of
purchasing them from Tyco International.
 Consumers’ price sensitivity, high market knowledge and purchasing standardized
products in large volumes also increase the buyers' bargaining power.
 Some factors that decrease the bargaining power of buyers include;
 If any customers’ group generally influence lower portion of purchasing.
 Buyers inability to integrate backwards,
 Low price sensitivity, lower market knowledge,
 High switching costs and purchasing customized products in small volumes.

 How Tyco International can tackle the Bargaining Power of Buyers?

 Tyco International can manage the bargaining power of buyers by increasing and
diversifying their customer base.
 It can be done by introducing new products, targeting new market segments and
adopting the product diversification strategies. Marketing and promotional strategies
can also be helpful in this regard.
 Building loyalty by embedding innovation and offering excellent customer experience
can raise the switching costs, which will ultimately reduce their bargaining power.
Tyco International can adopt these strategies to strengthen its competitive positioning in the
market.

22
 Limitations of Porter’s Five Force Model: Porter, who presented the model in his work
Competitive Strategy: Techniques for Analyzing Industry and Competitors, developed it
because he felt that the SWOT (strengths, weaknesses, opportunities, and threats) analysis
was not specific enough for the requirements of industry. There have been criticisms of
the Five Forces model from economists, who put forward examples of other forces that
may affect an industrial scenario, such as government regulations.
Porter implicitly dismissed these criticisms, saying that these were not “forces” as such,
but only aspects that affected them. Business managers use the Five Forces model mainly
to initiate an analysis of competitiveness. They depend on other frameworks to develop
their strategies. All said, the attractiveness of an industry to a company depends on the
type and quality of the company’s organizational and financial resources. In the corporate
jungle, it is the fittest that survives.

C. Stakeholder Analysis for Tyco: The groups of people, who have stake on company
Tyco, are stakeholders group. All stakeholders are in exchange relationship with the
company. They have right to get timely & accurate information about their investment in
accounting statement. Such as

• Customer has right to get fully informed about the product & service which they wish
to purchase
• Employee – Have the right to work in a safe working condition.
• Suppliers who provide raw material to company Tyco has right to be respected.
• Stockholders have residual claiming right etc

The table below shows the different role of both internal & external stakeholers with their
expectation as exchange relationship with company Tyco.

Exchange Relationship

Provide to company Expect from company

Stakeholders Group

Internal Group

Stockholders Risk capital Maximum ROIC

Employees Labor & skill Salary, job satisfaction, good
working environment.
Managers Control Management Remuneration
function
Board Plan, formulate & Remuneration
Members implement strategic goal.
Customer Revenue High quality, reliable product, value
External Group

of money
Supplier Input Revenue & dependable buyer
Creditor Fund Interest income/ ROI
Government Rules & regulation for Company to adhere the rules
business practice & fair
competition
Union Productive employees Benefit to their member’s
contribution proportion to company
Local Local infrastructure Want company that are responsible
Communities citizen

23
 General National infrastructure Seek Some assurance such as;
Public Improved quality of life
Company existence
 Stake holder analysis for Tyco: Tyco need to analyze its stake holder interest & wait from
different angle because; A good corporate governance is about treating all stakeholders
fairly.

Whole Stake holder Analysis process in one diagram

Stakeholder Analysis is a process to---

1. Identify who is stakeholder.
2. The stake holder interest & concern.
3. Claim stakeholders are likely to make on the organization
4. Understand the goal of stakeholder.
5. Stakeholders who are most important/ Identify stakeholders most critical to survival
6. Identifying the resulting strategic challenge.

Such an analysis enables a company to identify the most critical to its survival to make sure
their satisfaction is paramount. But all stake holders do not carry the same wait, most
company consider equity holder, customer & employees as the prime weighted and their
satisfaction as main among all. They have strong impact on company operation. However;

Tyco Company should value its stakeholders 50

and treat all stakeholders fairly. %
Companies must identify the most important
stakeholders and give highest priority to 30
pursuing strategies that satisfy their needs. %

Management of Tyco also should do Qualitative 20

and quantitative research to obtain from the %
stakeholder groups how they feel the company
is delivering on following the four elements ?
----ethics, goal ,organization, reporting. ?
!
They can follow

24
Questionnaire-based research: Tools of stakeholder survey or Discussion-based interviews.

Analyze the several question from stake holder’s viewpoint to company on basis of
golden rules of corporate governance;

Ethics-- dose the company behaves responsibly towards all its stakeholders?

Goal-- dose the company’s goal reflect the expectations of all the stakeholders?

Organization-- Dose it protects the interest of its various stakeholders and has open
channels of communication with them?

Reporting-- is there information being passed through these channels which is sufficient
and accurate enough to satisfy all the stakeholders?

 C. i .Weighting the stakeholders —

All stakeholders have power and influence. Some of them are very strong and some of
them are weak. So, Management of Tyco have to measure weight, power and influence.
They can use power/influence matrix to address the stakeholder.

Propensity to Act
High Low
Will Act May Act Unlike to Act
Has power A1 A2 A3
High
Could get
Ability to B1 B2 B3
power
influence
Low Can’t get
C1 C2 C3
power

The stakeholders belongs to the group-

key stakeholders including key directors, major institutional shareholders and key
Group-A1
customer.
Group- A2 Significant shareholder, can call EGM and migrate to A1
Group- A3 Minor inactive shareholder
Group-B1 Trade unions, suppliers
Group- B2 management and key staff of a subsidiary company, loan provider
Group- B3 small bond holders, potential shareholder (minor group)
Group- C1 Environmental group
Group- C2 Consumers, staff
Group- C3 Pensioners of the company.

25
Next Step is to map the weight in chart

 After position analysis Tyco should check

the goal of the organization in the light of-

Necessary strategic capability need to

achieve for company Tyco.
Feasibility the nature of market
place.
Expectations of all the
stakeholders

Finally Tyco either confirm the existed

Goal or change the goal.

 3.2.1.5.2. Formulation of strategy for Tyco Intl. co: Strategic formulation has 2 part
they are Generating strategic options and Evaluating and selecting the suitability option are
described below:

A. Generating strategic options: The

management of Tyco needs to generate strategic
option after previous analyzed data for getting a
suitability strategy for company. Three strategic
option Cost leadership, differentiation &
focus strategy are described below;

26
 i. The cost leadership. The goal of the cost leader option is to increase efficiency and
lower the costs relative to its rivals. It helps to protect from industry competitors by cost
advantage. Company is less affected by increased prices of inputs. Even if there are
powerful suppliers, they cannot fall in price of inputs. And so as powerful buyers. Because
purchasing in large quantities increase bargaining power over suppliers. Company gain
Ability to reduce price to compete with substitute products. Low costs and prices provide a
barrier to new entry in the industry.
But company fall in problem if competitors may lower their cost structures,
If competitors may imitate the cost leader’s methods and if cost reductions may affect
demand.

ii. Differentiation Strategy:

It creates a product that customers perceive as different or distinct in an important way. It
focuses on Quality, innovation, responsiveness to customer needs. A differentiator strives to
differentiate itself along as many dimensions as possible. A differentiator segments its
market into many niches. A differentiated company concentrates on the organizational
functions that provide the source of differentiation advantage.

Differentiation Advantages:

• Customers develop brand loyalty

• Company can charge premium price
• Increased revenues = superior profitability
• Powerful suppliers are not a problem because the company is geared more toward the
price it can charge than its costs

• Differentiators can pass price increases on to customers

• Powerful buyers are not a problem because the product is distinct

• Differentiation and brand loyalty are barriers to entry

• The threat of substitute products depends on competitors’ ability to meet customer

needs

Differentiation Disadvantages:

• Difficulty in maintaining long-term distinctness in customers’ eyes

– Agile competitors can quickly imitate

– Patents and first-mover advantage are limited

• Difficulty of maintaining premium price

Focus Strategy: Serving the needs of a specific market segment. After choosing a market
segment, a focused company positions itself using either Low-cost OR differentiation

 Why Focus Strategies Are Different?

27
  The focuser is protected from rivals to the extent it can provide a product or service
they cannot.
 The focuser has power over buyers because they cannot get the same thing from
anyone else.
 The threat of new entrants is limited by customer loyalty to the focuser.
 Customer loyalty lessens the threat from substitutes.
 The focuser stays close to its customers and their changing needs.

B. Evaluating and selecting the suitability option: The management of Tyco need to
select appropriate strategic option for its business goal. Strategic option should be selected
after previous analyzed data and suitability with company goal and other facts.

• Cost Leadership and

Differentiation Strategic
Choices: Using robots and
flexible manufacturing
cells reduces costs while
producing different
products.
• Standardizing component
parts used in different end
products can achieve
economies of scale

• Limiting customer options reduces production and marketing costs

• JIT inventory can reduce costs and improve quality and reliability

• Using the Internet and e-commerce can provide information to customers and reduce
costs

• Low-cost and differentiated products are often both produced in countries with low
labor costs.

Company must select the appropriate option valuing ability and relating company capability

3.2.1.5.3. Implementing the strategy: The action stage of strategic management.

Task of putting strategies into action to improve Tyco’s efficiency and effectiveness by
considering its organizational design, structure.
The main activities we need to perform are----

1. Allocate the necessary resources.

2. Plan if any necessary organizational changes.

3. Write the business plan with detailed financial forecasts and budgets.

28
 4. Build in a system to enable the strategy to be kept on course or appropriately
modified.

5. Project-manage the whole process.

6. Set up a long-term strategy evaluation process to monitor the effectiveness of the

strategy.

7. Consistent with company culture.

8. Consistent with maximum profit.

9. Implement the strategic plan to corporate level, business level & operational level.

3.2.1.5.4. Monitoring & controlling progress:

It is the final and practical stage for Tyco in its strategic management process. Monitoring
& controlling is a set of action or incentives to motivate employees to work towards
increase efficiency, quality, innovation, responsiveness, to customers.

Efficiency: It can be measured by the level of production cost, productivity of labor,

productivity of capital,

Quality: can measured by number of rejected, the number of defective product return
from customer, and the level of product reliability overtime.
Innovation: can be measured by number of new product introduced, the percent of
revenue generated from new product.
Responsiveness to customer: can be measured by number of repeat customer defection
rate, level of on time delivery to customer, & level of customer service.

Balance Approached model

Monitoring & controlling help to

reduce scope of agency problem
between different management levels in
Tyco.

Process:
1. Established standard & target
against which performance can be
measured.
2. Create system for measuring &
monitoring performance on a regular
basis.
3 Compare actual performance with established target.
4 Evaluate result & take corrective action if necessary

Monitoring & controlling are formal target setting measurement and feedback system that
helps manager to evaluate about a company. Monitoring & controlling ensures the proper
strategic & corporate governance practice in all level of Tyco towards achieving its strategic

29
 goal. I gives specific feedback about how well an organization & its members are
performing building competitive advantage.

 Pictorial presentation of Strategic Management process with golden rules of corporate

governance

30
  Chapter-4: Finding, Recommendation and
Conclusion

4.1 Finding: For the growth of a company a strategic management that consider to
multiple stakeholder interest is necessary. To smooth operation of company, strong ethical
management system is essential which was absent in Tyco. In this report we have tried to
take a close look on case study of company Tyco’s, government mechanisms that former
manager did not followed strategies which could lead to maximize shareholder value who
provide the risk capital to the enterprise. The report observes very low activities of employee

31
participation in decision making in Tyco. Powerful executives intentionally use to provide
false information to take some extra advantage. Also found lacking of good governance
practice inside companies. Since Investors are generally getting influenced by other
investor’s decision, Kozlowski tried to catch up by spreading false rumor using this tricks.
However; two former greedy executives were busy at making their own benefit. The Entire
report has made on different strategically analysis on Tyco in very shortly considering every
strategically process but Tyco need to analyze details for its operation which was not possible
due to information limitation of company Tyco’s full profile.

4.2 Recommendation: Tyco need to pay attention to other internal & external
stakeholder’s interest for balancing the need of different parties to set an achievable strategic
goal. . In addition strong ethical principal amplification on strategic decision making is vital
which Kozlowski and Swartz did not follow. However; in the implementation state the strong
monitoring strategy is also recommended to take. After all company Tyco should make a vast
analysis to find its distinctive competencies to find out its competitive advantage. The new
management of Tyco should establish a good corporate governance practice inside the every
level of its business.

4.3 Conclusion: A sound management system leads to a growing economic condition for
every company. A number of strategically measures are required to be undertaken in this
respect. Good governance mechanisms recognize this truth. To conclude; we would like to say
that, Tyco still has a strong capability to face business challenge. Tyco is a well established
company for a decade so its new management would be able to do a perfect analysis to set its
strategy and meet the goal by congruence practice of corporate governance. After all, we have got
a nice and practical experience by making this analysis on such a topic. Tyco would be able to
succeed to implement the knowledge what we have learnt from the course in the classroom. We
wish that Tyco can successfully do their business and maintain the growth for a longer time.

4.4 References
1. www.assignmentpoint.com
2. https://www.coursehero.com/
3. https://www.case48.com/
4. http://www.strategicmanagementinsight.com/index.html
5. http://projects.bus.lsu.edu/independent_study/vdhing1
6. http://projects.bus.lsu.edu/independent_study/vdhing1/
7. Text Book

32