Sunbeam: Balance Sheet and Shareholders Wealth

This case focuses on David Sokol, an executive who has made a “name” for himself in recent years within the energy industries. After becoming recognized as a successful “turnaround” agent for troubled companies, Sokol was hired in 1992 to serve as the chief operating officer of JWP, Inc., a large, New York-based conglomerate. At the time, JWP had an impressive history of sustained profits and revenue growth that was being threatened by the company’s far-flung operations and unwieldy organizational structure. Unknown to Sokol, JWP’s impressive operating results over the prior few years had been embellished by the company’s

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

When Knudstorp became the CEO, the company was with negative cash flow and the real risk o which would have even led to a breakup of the company.

The primary objective of the manager is to please the stockholder by maximizing stockholder wealth.

Decisions were made very quickly and efficiently as the power lies at one source. This helped him deliver the targets by deadlines. Primary objective of any organization is to increase shareholders’ wealth, so Dunlop’s main focus was to align managers’ interest with that of shareholders’. Before taking any major decision after joining Scott paper and Sunbeam, Albert Dunlap bought shares of that company in order to gain investors confidence. That was good approach. It shows how much confidence he had in his decision making. He transformed 115 year old company ‘Scott paper’ from loss making entity to profit making. One of the good things about his restructuring strategy was that he focused on introducing new, innovative products and spending significantly on

On July 11, 2013, a new leader was introduced in the Market Basket organization, Arthur S. Demoulas. The Market Basket community was informed that ASD gained control of the board of directors and had set an agenda. His agenda, alone, indicates what type of leader ASD would turn out to be. Arthur S. Demoulas set out with an agenda to fire Arthur T Demoulas, slow growth, take on debt and increase profits through price increases while increasing the wealth of the shareholders by stripping cash reserves. (Admin, 12/31/2013 Good Riddance 2013; retrieved: www.wearemarketbasket.com). As new CEO, the very first act was to distribute $250 million in profits to the nine family shareholders. The Boston Globe stated it best when they stated “it was an uncharacteristic act of greed for a firm known for its generous treatment of its workers and concern for price-conscious shoppers” (8/27/2013 Market Basket’s Decent into Greed; Retrieved: www.bostonglobe.com). ASD’s leadership style differs vastly from that of his predecessor. In fact, I’m not even sure how I would categorize ASD aside from greedy and self-centered. He does not

These acts were a violation of the Securities Act of 1933. The objectives of the Securities Act of 1933 are that investors obtain accurate reports of a company's commerce and to prevent misleading securities sales (USSEC, 2007). Although, the USSEC cannot guarantee the information provided by each company; the Securities Act of 1934 grants authority to the USSEC with disciplinary authorization (USSEC, 2007).

Through out his tenure at Sunbeam,Al Dunlap’s advocated profit by firing many employees and shutting down many factories.If we look at it in the short term ,this approach seems very attractive as it brings in quick short term

1. Get the right management team. As Dunlap assumes office, he retained only one senior executive from Sunbeam’s old management team. Dunlap first hire was Russ Kersh, a former employee of Dunlap, as executive vice president of Finance & Admin. The new management team also

Dunlap is famous for his ruthless but seemingly successful turnaround techniques that he has employed: “For much of his career before coming to Sunbeam, Al Dunlap was known as the poster child of corporate restructuring.” Given that the Board was familiar with

To maximize shareholder value through a systematic, disciplined, reliable, ethical, and ongoing process of supply of goods or services.

From my perspective, Sunbeam’s board made a wise decision in firing Al Dunlap, and it was an example of effective corporate governance as the decision stopped Dunlap to further impair tone at the top in Sunbeam and further generate agency cost within Sunbeam. According to SEC litigation release No. 17001, during Dunlap’s tenure in Sunbeam, Dunlap was involved in applying improper earning management such as channel stuffing and “cookie jar”

Following are the changes that Al Dunlap initiated after being hired by Sunbeam Inc and the probable opportunities that Dunlap used to manage earnings:

Jim Collins and his research team have done a wonderful job identifying what it takes for a company to go from good to great. I found this book extremely interesting and would like to share several of my thoughts. The study looks at companies that appeared on the Fortune 500 from the years of 1965 to 1995, looking for those that, for 15 years, either tracked or underperformed the stock market, followed by a transition, and subsequently returning at least 3 times the stock market for at least 15 years. The eleven companies included in the

Nevertheless if companies operate in weak markets and fail to create growth and profit the concept of maximization of shareholder wealth is also an opportunity for self-regulation and security against threats for a company. This approach is in particular useful for safeguarding against difficulties arising from wrong or misguided leadership within a corporation. Shareholders of a company have the strongest interest in a company’s success because they often invest a lot of capital in the business and require revenues for their deposit (Moore, 2002). As a matter of fact, they become more