xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxSunbeam is company that is gutted by management in an attempt to find a buyer for the charred company and cut themselves loose from then havoc they had wreaked. It began in 1897 as the Chicago Flexible Shaft Company, manufacturer of agriculture implements. With innovation of electricity, it began producing toasters and irons, and changed its name to Sunbeam Corp. In 1960 Sunbeam felt a need to merge with Oster Co. and later Allegheny International in 1981 due to increasing pressure for household electrical goods (Jackson 2006). The lavish lifestyle of Robert Burckley, CEO of Allegheny, saw the company’s profits soon turned into loses and was fired in 1986.The new management instituted an aggressive downsizing program by cutting the company’s jobs and sold off a number of the product lines.
This saw the company filed for bankruptcy in 1988. However, Sunbeam emerged from bankruptcy under the control of Michael Price and Michael Steinhardt who contributed $60 million each and renamed the business Sunbeam-Oster with Kazarian as the CEO. Kazarian did not remain in the position for long before being replaced by Roger Schipke due to his intense workaholic behavior (Jackson 2006).
At this point the company’s profits fell quickly and steadily. Sunbeam required a leader who could turnaround the losses into profits. Price proposed Al Dunlap who had then sold Scott Paper to Kimberly-Clark at a huge profit. Al Dunlap’s history – both personal background and his business history of downsizing businesses was a warning sign to be on the lookout for unsustainable profits in Sunbeam. He applied a carrot and stick system that brought division among the management and the subordinates. Al Dunlap was considered such a celebrity CEO that had turned struggling companies around.
However, during his term in Sunbeam he was known to emotionally abuse employees by being disrespectful and even violent. He could shout ferociously at managers, throw papers and bang his hands on his desk. Dunlap lied to the Wall Street assuring them that the company was making progress and that it would continue in the same trend for a long time. Another ethical consideration that was of great concern was the leadership of Kazarian’s and Ronger Schipke.
Kazarian‘s work holism seemed to be too intense for some employees and was fired and replaced by Roger who on the other hand was more reserved and too gentle. He was a good example of ethically neutral or “silent” leaders who are not strong leaders either ethically or unethically. Such leaders don’t provide explicit leadership and employees perceive them to be silent on ethical issues. On a moral dimension a neutral leader may be perceived to be more self-centered than people- oriented. He may also be thought to focus on the bottom line without setting ethical goals.
Employees are likely to interpret such silence to mean that management does not care on how business goals are met (Jackson 2006). It is evident that there are several issues that are considered to be the main causes of the collapse of Sunbeam Corp. These issues included ethical consideration been practiced within the company, incorporation of a new CEO which was later followed by new management team. It was from these issues that question arises in regard to how one would move an old established bureaucratic organization by way of innovating it into a more competitive company, how much effort and time should be incorporated while coming up with a proper planning strategy, which ethical consideration are need so as to boost the operation within Sunbeam and finally how a company should be able to maintain morale among employees as a way to improve a company performance (Brinkmann 2002).
In this study will focus on ethical considerations used by Sunbeam that led to its collapse and what should be done to prevent future reoccurrence of the same.
The sizzling saga of Sunbeam will be our central case study in learning various outcomes in relation to ethical considerations.