Sunbeam Ethical Analysis
Table of Contents
Page No.
Executive Summary 2
Introduction 3
Restructures in Sunbeam 3
Turnaround at Sunbeam 5
Accounting Practices at Sunbeam Corporation 5
Accusations 5
Key Players in Sunbeam’s Scandal 6
Unethical Behaviours 7
Ethical Analysis 7 Stakeholder Theory 7 Deontological Theory 7 Shareholder Theory 7 Utilitarianism Theory 7
Reference 9
Executive Summary
This report is based on Sunbeam Corporation and Albert Dunlap, the CEO from 1996 till 1988. In July of 1996, Michael Price and Michael Steinhardt hired Dunlap as the CEO and chairman of the board for Sunbeam Corporation. As the two original investors who bought Sunbeam from bankrupt Allegheny Internal, Price Steinhardt together own 42 per cent of its stock. Prior to hiring Dunlap they had tried unsuccessfully, to sell Sunbeam. They believe that he was the one person who could turn the company around and increase stock prices and profits. The increase in stock prices did occur, almost instantly. The turnaround took just fifteen months. On July 19, 1996, the day Dunlap was named Chairman and CEO of Sunbeam, the stock jumped 49 per cent. The jumped increased the share price from 12 to almost 19 adding $500 million to sunbeam’s market value. The stock continued to increase and reached a record high of $52 per share in March 1998. The Corporate turnaround specialist Dunlap praised himself for achieving such feat.
Later on, the inevitable was unravelled. It was revealed that Dunlap and his ally had been using bill-and-hold strategy that gave rise to its share price. In the light of the analysis, the inferring themes of Shareholder theory will consider the Executives behaviours unethical and at the same time selfish. Reason being, they all involved in an illicit activities at the detriment of their shareholders. In the words of Gibson (2000), stakeholder
Page No.
Executive Summary 2
Introduction 3
Restructures in Sunbeam 3
Turnaround at Sunbeam 5
Accounting Practices at Sunbeam Corporation 5
Accusations 5
Key Players in Sunbeam’s Scandal 6
Unethical Behaviours 7
Ethical Analysis 7 Stakeholder Theory 7 Deontological Theory 7 Shareholder Theory 7 Utilitarianism Theory 7
Reference 9
Executive Summary
This report is based on Sunbeam Corporation and Albert Dunlap, the CEO from 1996 till 1988. In July of 1996, Michael Price and Michael Steinhardt hired Dunlap as the CEO and chairman of the board for Sunbeam Corporation. As the two original investors who bought Sunbeam from bankrupt Allegheny Internal, Price Steinhardt together own 42 per cent of its stock. Prior to hiring Dunlap they had tried unsuccessfully, to sell Sunbeam. They believe that he was the one person who could turn the company around and increase stock prices and profits. The increase in stock prices did occur, almost instantly. The turnaround took just fifteen months. On July 19, 1996, the day Dunlap was named Chairman and CEO of Sunbeam, the stock jumped 49 per cent. The jumped increased the share price from 12 to almost 19 adding $500 million to sunbeam’s market value. The stock continued to increase and reached a record high of $52 per share in March 1998. The Corporate turnaround specialist Dunlap praised himself for achieving such feat.
Later on, the inevitable was unravelled. It was revealed that Dunlap and his ally had been using bill-and-hold strategy that gave rise to its share price. In the light of the analysis, the inferring themes of Shareholder theory will consider the Executives behaviours unethical and at the same time selfish. Reason being, they all involved in an illicit activities at the detriment of their shareholders. In the words of Gibson (2000), stakeholder