Dunlaps aim for ailing companies Essay Example | Topics and Well Written Essays - 750 words

Dunlaps aim for ailing companies - Essay Example During 1997, Sunbeam's management also showed hoax guaranteed sales, improper bill and hold book sales and also resorted to other fraudulent practices. Out of the net income of US$ 189 million, it is estimated that at least US$ 62 million was from fraudulent accounting practices followed by the company. Dunlap was a management expert who specialized in quick fix solutions for ailing companies. Critics say that he specialized in streamlining the bottom-line of the ailing firms by firing employees and resorting to other cost cutting measures. This would make the company more profitable in the short term, but add to difficulties since such measures would equally strip the company of both talent and capability to compete in the international environment. They point to the fact that most of Dunlap's previous firms have been put up for sale after the dramatic recovery they staged and have never been capable of outdoing its competition on its own. Dunlap's aim has always been to improve the performance of the company on the books and then sell it off at higher prices as the stock value escalates in the expectation of higher returns. At Sunbeam, he attempted the same strategy and did nothing creative about it. In order to cut short the time frame to correct the company's book, he resorted to sales and accounting frauds and the debt financing of three acquisitions to increase the turnover and asset base of the firm. The celebrity CEO was also followed closely by the media who was highly skeptical of his style of aggressive and inhuman decisions. The over ambitious CEO was overpowered by the media who alerted the shareholders and the authorities about his way of functioning and the glorification of the company destined to doom. The senior management of the company also did little to control the massive information leakage once the media opened the lid of the mismanagement can. The CEO had cut over half of Sunbeam's jobs soon after he took over. The share price shot up to over US$ 53 in 1997 from a mere US$ 12. Many share holders had already sold their stake in the company. But growing public concern led to the CEO himself being victimized at the end. The board of directors fired Duncan to save their embarrassment and filed for closure. 3. Identify ethical issues that Dunlap's management team may have created by adopting a short - run focus on financial performance. What lessons could be learned from the outcome Dunlap's management team had overlooked the primary aim of all businesses - to create social wealth. He had specialized in the short run concept after he discovered the pleasure of making money by selling off his previous firms to high bidders who bought the revived companies to add to their wealth. But in the process of streamlining a sinking firm, he had thrown overboard a large chunk of its employees and the beneficiaries of its functioning. His focus was always the small community