The Sunbeam Board Of Directors

1488 Words6 Pages
This case attempts to study and analyze the decisions of the Sunbeam Board of Directors (BOD) during Albert Dunlap’s stint as the Sunbeam’s Chief Executive Officer (CEO). This analysis will comprise the CEO hiring and his shareholder primacy view, first year and second year CEO compensation package review and will conclude the BOD’s decision to fire the CEO. In July, 1996 Sunbeam was a dying brand, which struggled to survive in the increasingly competitive market-place and needed a savior.(case p. 2) Sunbeam’s BOD brought in Al Dunlap to turnaround this ailing firm, based on Dunlap’s proven ‘restructuring and downsizing’ track record. “For much of his career before coming to Sunbeam, Dunlap was known as the poster child of corporate restructuring (case p.1).” Self-serving CEO’s (Dunlap’s) short-sighted and flawed shareholder primacy view Dunlap focused largely and explicitly on shareholder primacy and practically lacking consideration for all other stakeholders of the firm, which reflected in his “take-no-prisoners” (case p.1) management style during his tenure as Sunbeam’s CEO. Dunlap’s goals were limited to just maximizing stockholders’ wealth by adopting fast turnaround tactics and all other salient characteristics of the very existence of corporation such as product innovation, product/service quality, employee and customer satisfaction and corporate ethics were completely neglected. Mr. Dunlap’s adaptation of shareholder-theory was based on historic view of

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