Tyco International: Management Planning Analysis
Traditionally, along with leading, organizing and controlling, planning is one of the main functions of management. As a function, planning has to answer five questions; where does the company want to go, why they want to go there, how they will arrive at their destination, what is needed to go there and finally, how they will know when they have reached their goal. In this paper I will explore how Tyco International, Ltd. has used the planning function to recover from a scandal and to begin again to build a new future. Planning is the foundation that lays out the goals of a company however; factors such as ethics, technology, legal issues ...view middle of the document...
Executives at the top of Tyco had to redefine the internal structure and develop new internal controls in place. They address the ethical concerns of the employees, the shareholders and the public by first coming up with a new vision that would express who they are now and it states as follows (Tyco International, Ltd, 2008):
To be our customers’ first choice in every market we serve by exceeding commitments, providing new technology solutions, leveraging our diverse brands, driving operational excellence, and committing to the highest standards of business practices—all of which will drive Tyco’s long-term growth, value and success.
As reported in an article by Knowledge@Wharton (2005), Edward Breen, the CEO who replaced S Kozlowski, “He fired 290 of the company's top 300 executives. Then he turned around and fired the board that had just hired him. He closed Tyco's posh Manhattan offices and moved to West Windsor, N.J. He ordered consolidations throughout the company, paid down debt and, lately, has begun to focus on growth rather than simple survival.” By restructuring the company’s governance mechanisms, forming a new board of directors independent of the company and developing a new reporting structure they have made immense strides toward rebuilding their reputation (Jorgenson 2005).
Even the culture within the company has changed as a result of pressure from the shareholders and society. Tyco’s leaders have created a very ethical top-down organization that was led by huge ethical reforms at the top-management level that pass these values down the chain of command. From a business standpoint, they have planned to focus on their most profitable water market segments, to expand geographic bases from their core businesses in Europe and the Pacific and will simplify their business through product portfolio rationalization.
Social responsibility needs to be a focus of Tyco’s tactical planning if its middle management is to translate the strategic goals that are applicable to their department within the organization. For example, the Technology director works with the CIO to plan the purchase of new technologies, in budgeting, and forecasting the company’s future needs. In June 2007, Tyco announced that it would be splitting its company into three separate entities, one for health care, electronics, fire and security products. This will enable them to have better governance because this will create separate a board of directors and senior management for each company instead of one giant company. More recently, Tyco agreed to pay the SEC $50 million fine as a result of the inflated profits claims. They are planning...