Sunday, July 29, 2007

Leadership Scandal: Blast from the Past

In 2005, Ex-Tyco CEO Dennis Kozlowski received 8-1/3 to 25 years in prison for his part in stealing hundreds of millions of dollars from Tyco (CNNMoney). I can remember following the news pertaining to the scandal and thinking -- why did Kozlowski do it? He had everything!

A while back, I took a leadership course and was asked to share my opinion on corporate scandal and the Dennis Kozlowski issue. I was given 5 questions to research and answer. As I answered the questions, I was still asking myself - why did he do it. I'm also asking why are some of today's leaders getting tangled in the web of scandal? Do we need more ethics training? Corporations and some universities are now providing ethics training. I'm not convinced training alone is the answer. What are your thoughts?

Here are my thoughts on the Kozlowski issue...

1. How did his past shape his personality?
Kozlowski's past did shape his personality. His father was a wheeler-dealer type who was an effective persuader. This is definitely a trait he had. Just look at how quickly he rose to the top of the Tyco Company. You don't get this far without the ability to persuade. Also, when you take a look at his locus of control, he knew he was in control of his destiny. Go back to his past and you'll see this. He had a strong personality, was popular and he paid his way through school. His past definitely shaped his personality.

2. Does this case contradict the view that personality is largely genetically derived? Explain
This case does contradict the view that personality is largely genetically derived. Mr. Kozlowksi, by all accounts, was an honest, easy going and hardworking person. As he faced charges, the words "respected and feared" described Mr. Kozlowski. His personality change was in response to the other personality determinants -- environment and situation. To be successful, Kozlowski had to adapt to the corporate environment and situations.

3. What does this case say about corporate ethics?
This says people in corporate are under intense pressure to succeed and ethics are sometimes thrown out the window. Corporations would be wise to provide ethics training to help shape the behaviors of its employees. Employees might not fully understand what’s ethical or unethical; thus making decisions that may be against the will of the company and damaging.

4. In the Movie, "Wall Street," the Michael Douglas character says, "Greed is good." Is this true? How does this apply to Kozlowski?
Kozlowski's greed is what propelled the enormous growth of Tyco. The deals and decisions he made were motivated by his desire to be the best. The situation was a win for the company and Kozlowski. To a certain extent, I agree with the "Greed is good" quote. I don't advocate greed, but I agree that people need motivators to achieve. Those leaders who are successful, believe that they control their destiny.

5. "Kozlowski just did what anybody would do if they had the chance. The people at fault in the story are Tyco's Board of Directors for not controlling their CEO." Do you agree or disagree? Discuss?
When it came to Kozlowski, the board was operating under a halo effect. A halo effect is when we draw a general impression about an individual on the basis of a single characteristic (p139). The characteristic that stood out Kowlowski was his charisma. He was perceived as one with the company. It was this perception of Kozlowski that earned him free rein at the company. Free rein or not, it was the board’s responsibility to have checks and balances in place to protect the company. They were asking for it.

If you are leading others , I suggest you research the topic of corporate scandal and the motivation behind it. Follow the link to read more on Ex-Tyco CEO Dennis Kozlowski.

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