Dunlap is famous for his ruthless but seemingly successful turnaround techniques that he has employed: “For much of his career before coming to Sunbeam, Al Dunlap was known as the poster child of corporate restructuring.” Given that the Board was familiar with Dunlap – his reputation and employment history, hiring Dunlap clearly showed they needed a fast and powerful turnaround and Sunbeam was becoming helpless in the struggle to protect its market share in an increasingly competitive industry. Also, Dunlap’s priority focuses largely and explicitly on stockholders and virtually no regards for other stakeholders. Hiring Dunlap meant that Sunbeam’s goals are limited to just maximizing stockholders’ wealth and all other important aspects of the existence of corporation such as ethics, product quality, employee and customer satisfaction are severely impaired. A corporation is not solely an instrument of stockholders, built to cater to stockholders’ wealth, but a coalition between many resource suppliers with a view to increasing their common wealth: supplying goods and services to customers with efficiency (at relatively lower costs or with high quality), providing jobs to employees with suitable skill sets and so on. Thus, Al Dunlap’s shareholder primacy is unreasonable and contradictory to the essential objectives of the corporation. Flawed perspectives led to wrong decisions. In an effort to create the “fast turnaround,” Dunlap fired many employees and shut down many factories to cut costs…
Like I stated earlier, in the beginning Dunlap was able to substantially maximize the shareholders’ wealth of Sunbeam. By 1997 he was able to open ten different factory outlet stores. The main goals of the factories were to increase brand awareness of the company, increase sales, and most importantly maximize shareholders wealth. These changes were all made by Dunlap within in the first seven months of taking over the company. By then the stocks had increased by 284 percent, to about $48 a share.…
Sunbeam’s goals explicitly showed when they hired Al Dunlap July of 1996. Sunbeam struggled in the business world, and faced thick competition. They saw that they needed a big change if their company wanted to stay in business. Al Dunlap had a reputation for turning failing companies into prospering ones. They cared about…
Discussion Questions 1. Evaluate this situation from the view point of David Edmondson’s ethical leadership. What could Radio Shack have done differently? In this world some people want money and power. To gain these two things often people choose the wrong ways. David Edmondson is one of them, because he cheated on his resume. David Edmondson is a fraud that means he is not an ethical leader at all. Because of Edmondson’s cheating his company RadioShack faced losses, so he didn’t do ethical leadership in his workplace. If a manager cheats, lies, steals, manipulates, take advantages of situations, or treat others unfairly that is not an ethical behavior. That is called unethical behavior. We can see lying on David Edmondson’s case, so we can say that he didn’t behave as an ethical leader. According to the text, “Ethical leadership is known as our core values and having the courage to live them in all parts of our life in service of the common good.” Before entering to a company a manager should know what is ethical leadership. If a manager doesn’t know what ethical leadership is, then he/she will never fulfill their job properly. If a manager doesn’t have knowledge about ethical leadership then he will do unethical things in a company. Also, unethical leadership can create many problems, such as ethical lapses and social irresponsibility. To prevent all of these things in an organization we have to give ethics training, independent social audits and also give knowledge about formal protective mechanisms.…
1. Analyze the changes that Al Dunlap had initiated at Sunbeam after being hired from a strategic perspective. Did the changes started by Dunlap allow him opportunities to manage earnings?…
Leadership is the main factor influencing the success of takeovers and mergers because Staff who has strong leadership skills will motivate and insipre other employees to achieve the goals and objectives of the firm. This is well illustrated in the acquisition made by Kellogg’s. One of the key factors influencing the succes of Kellogg’s severals acqusition, was The CEO John a Bryant’s leadership skills as, he held direct responsibility for managing the planning and execution teams for the integration of Keeble Food Company in 2001, this has been a success takeovers in the short term and the long term as he has created many different synergies whose revenue synergy which was just under $4 billion more. This has been made because Kellogg’s is driven by a democratic leadership approach as the company engage discussions with their employees before taking them implanted communication programm to empower his workforce. The business believes in the value of the their employees and therefore rewards them for how well they perform. This allows the firm to have a very motivated workforce and thus a very productive one, it also inspires them to work harmoniously with Keeble Food Company ’s employees and culture and produce synergies. Futhermore, this was the case in the Pringle’s acquisition by Kellog’s. Originaly Procter & Gamble wanted to sell Pringle’s to Diamonds but due to account’s problems, the deal failed. Kellogg’s responded very quickly to that and made an offer to the American company. This show that the CEO of Kellogg’s has reacted very rapidly as he saw an huge opportunity for his firm to growth externally as this merger would help to achieve Kellogg’s…
As a president of the company, Murray spent less time on planning strategies for the company. He trusted his managers too much to run their respective office. Furthermore, as a landscaping manager, Derek Sinclair had no working experience and poor attitude on his job. Some staffs even stole and sold company’s supplies to customer in the purpose of personal profit.…
First, after Al Dunlap was hired, Dunlap wanted to surround himself with loyal executives, such as Mr. Kersh, and fired the existing senior managers. This strategy make Dunlap easily get consensus for his points. Second, his immediate strategy was to aggressively cut the costs by eliminating excessive staffs, divest unprofitable divisions and consolidate headquarters as well as production facilities.This strategy could result in lower cost, higher profits. Then he turned his strategy to growth and expansion of core business after the downsizing strategy. This strategy focused on growing the core business by product differentiation to diversifying through both concentric and conglomerate acquisitions. Also company announced a huge restructuring charge…
There has been a tremendous focus within the media in the past decade about the ethics of leadership within corporations. Corporate scandals and government corruption seems to be all too common these days. Lately, we have heard an abundance of stories in reference to top executives within multi-million dollar companies found guilty of conspiracy, theft and fraud; also known as unethical or pseudo-transformational leadership.…
In April 1996, Sunbeam hired Albert J. Dunlap as its CEO. Dunlap led the company in a corporate restructuring. This restructuring provided a hefty reserve to protect against future earnings shortfalls. The restructuring reserve included the following: 1) $18.7 million of items that benefited future periods, 2) $12 million in litigation reserves which did not met the criteria of a loss contingency, and 3) $21.8 million in a cooperative advertising reserve which was approximately 25 percent higher than the previous year without a proportional increase in sales.…
This report discusses and illustrates the role of the internal and external environments, ethics and social responsibility in a modern organization. The main case study used is Madoff Securities, the US finance company that collapsed last year after a web of fraudulent and unethical activities were exposed. The discussion blends theory and facts, from which…
John Francis Welch, Jr., also known as “Jack”, became the CEO of General Electric in 1981 and maintained this title for the next 20 years until his retirement in 2001. He was widely known as a “national business hero” because he had a different approach on management that provided increasing results. For this very reason, many also despised his tactics. He was very aggressive in cutting out the weak, because he believed that it was holding back the company. One of the main principles that General Electric emphasized was loyalty. After Welch took over, loyalty meant next to nothing. He led General Electric to become a highly profitable and successful firm, but a major question is how successful he was as a…
Jeffrey Skilling is brought in as the new CEO and immediately imposes his own principles about handling profits and projects. Skilling adopts a management practice that engages the company in projects without examining whether the projects have the capacity to be successful or not. This is indeed, a trait that has the capacity to taunt the image of the company in respect to the management of its assets and resources. In essence, this portrays Enron as a profit making company, even if it is not…
“Prosecutor Sean Berkowitz said, „the jury sent and unmistakable message: You can‟t lie to shareholders. No matter how rich and powerful, you must play by the rules‟.” (Msnbc.com news, 2006) The former statement made by Mr. Berkowitz occurred during the trial of Ex-Enron executives Kenneth Lay and Jeffrey Skilling. These executives were convicted of fraud and conspiracy after the demise of the company in 2001. In this case, being an in-authentic leader lead to the loss of “$60 billion in market value, almost $2.1 billion in retirement savings and 5,600 jobs”. (Msnbc.com news, 2006) The results of the trial would have an effect on the guiding principles of leadership in organizations forever. In organizations today it may seem difficult to believe that authentic leadership still exists. The media thrives on leaders such as Ex-Enron CEO Kenneth Lay and Ex-WorldCom CEO Bernard Ebbers, who have been convicted in corporate scandals which has lead to the ultimate down fall of their organizations. Therefore authentic leaders aren‟t usually the center of attention. As a…
One of them being, the highly publicised trial of Ramalingam Raju of erstwhile Satyam Computers, by the end of which the company not only lost its face in front of its loyal customers the world over but also led to its takeover by Tech Mahindra.…