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Decision-making process in business - Essay Example
Author : bricecrist
Pages 2 (502 words)
The turnaround at Sunbeam could not maintain momentum. The three purchases of Coleman from Ronald Perelman, Signature Brands (Mr Coffee), and First Alert (smoke and gas alarms) made by Sunbeam initially pushed share prices up. However the same purchases caused the downfall…
Sales of electric blankets were unusually high at this time. Sales of grills were also unusually high during the fourth quarter. These financial bungling unfolded the actual state of affairs in Sunbeam.
Al Dunlap's four step plan impacting financial, personnel, core business and strategy of Sunbeam had elements of controversy. The changes they brought about were fundamental and drastic. They failed to foresee the long term impact of their actions. They did not cater to the rule that balance is the key to most successes.
As for public relations, Al Dunlap's arrogance that his Mean Business policies were accountable for Sunbeam's turnaround caused investors and the public to question Sunbeam's integrity. Dunlap aired his views that his "Dream team" sees opportunities where others see impossibilities.
Al Dunlap's management team performance was flawed from the beginning. They failed to: (1) consider that cost cutting on a mass scale is counter productive, (2) realize that cutting down such a huge amount of jobs is actually downsizing business, and (3) categorize core business as profit making exercise rather than link each product with Sunbeam and sell off those that did not fall within the five categories of core business.
The lessons that could be learnt from the outcome are that one must exercise more caution and care in turning around companies. ...