Dennis kozlowski net worth

376 Part 4 Implementing Strategy PRACTICING STRATEGIC MANAGEMENT Small-Group Exercise: Evaluating Stakeholder Claims Break up into groups of three to five people and appoint one group member as a spokesperson who will communicate your findings to the class. Discuss the following: 1. Identify the key stakeholders of your educational institution. What claims do they place on the institution? 2. Strategically, how is the institution responding to those claims? Do you think the institution is pursuing the correct strategies in view of those claims? What might it do differently, if anything? 3. Prioritize the stakeholders in order of their importance for the survival and health of the institution. Do the claims of different stakeholder groups conflict with each other? If claims conflict, whose should be tackled first? Article File 11 Find an example of a company that ran into trouble because it failed to take into account the rights of one of its stakeholder groups when making an important strategic decision. Strategic Management Project: Module 11 This module deals with the relationships your company has with its major stakeholder groups. With the information you have at your disposal, perform the tasks and answer the questions that follow: 1. Identify the main stakeholder groups in your company. What claims do they place on the company? How is the company trying to satisfy those claims? 2. Evaluate the performance of the CEO of your company from the perspective of (a) stockholders, (b) employees, (c) customers, and (d) suppliers. What does this evaluation tell you about the ability of the CEO and the priorities that he or she is committed to? 3. Try to establish whether the governance mechanisms that operate in your company do a good job of aligning the interests of top managers with those of stockholders. 4. Pick a major strategic decision made by your company in recent years and try to think through the ethical implications of that decision. In the light of your review, do you think that the company acted correctly? The Rise and Fall of Dennis Kozlowski Under the leadership of Dennis Kozlowski, who became CEO of Tyco in 1990, the company’s revenues expanded from $3.1 billion to almost $40 billion. Most of this growth was due to a series of acquisitions that took Tyco into a diverse range of unrelated businesses. Kozlowski was initially lauded in the business press as a great manager who bought undervalued assets 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. Chapter 11 Corporate Performance, Governance, and Business Ethics 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 defenders pointed out that its accounts 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 charges, 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.