Nobody downloaded yet

Whirlpool Credit Scandal - Term Paper Example

Comments (0) Cite this document
Summary
The Whirlpool Corporation is a firm that achieved tremendous growth during the last couple of decades due to its aggressive use of credit contracts to finance the purchase of equipment by its customers…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.4% of users find it useful
Whirlpool Credit Scandal
Read TextPreview

Extract of sample "Whirlpool Credit Scandal"

Download file to see previous pages The financial arrangement was very profitable since the firm was earning an interest rate income of 18% to 22%. The “open end” notes worked like credit cards that are used for a single purchase. The company during the 1990s expanded its business to include the sale of dish antennas. At the time this was a unique opportunity by targeting homes in rural areas that did not have access to cable television. These dish contracts were the focus of controversy. The company claims that the problems were a misunderstanding, but in reality it seemed that the actions of the salesmen of the company were calculated and were performed intentionally to mislead the customers. The root of the controversy was based on the customer’s claim that the salesmen told them that the dish antennas were financed on the three year basis, when in reality the company was offering a financing term of five years. The no money down financing offer that the company offered to finance the acquisition of antennas was an initiative that served a social purpose. It helped a lot of poor and lower middle class citizens in rural regions improve their quality of life. Satellite television provided access to hundreds of channels. Rich people could acquire the Dish antennas by paying cash because the $1124 cost was insignificant to them. The problem with these contracts was that they were deceiving customers by hiding the fact that accumulated interest would increase the contract length to five instead of three years. The end result of the Dish antenna contract was that it hurt the economic well being of poor people by keeping them in debt for an extended period of time. One of the lessons to be learned from this case study is that people should carefully read the terms of the written contracts instead of trusting the word of deceptive salesmen. The economic benefit of the case was that the Whirlpool National Financial Bank created a financial tool that allowed poor people and persons with bad credit access to expensive Dish satellite equipment. The purpose of the “open end” notes was to facilitate the acquisition of satellite television to American citizens of all social classes. The salesmen of the company entered into unethical behavior when they misled buyers into thinking that the Dish equipment debt would be liquidated in a term of three years. The controversy with the financing became a legal matter. The customers were within their right to seek legal action because they entered into financing contracts under false premises. The executive management team of Whirlpool realized that the company was facing a major legal problem. Lawsuits are an undesirable outcome for companies due to the financial costs associated with the legal process and because the news of a pending lawsuit against a company hurts the corporate image of a firm (Referenceforbusiness, 2012). The out of court settlement that Whirlpool signed to resolve the conflict is the first step towards fixing the situation. The firm must now take corrective actions to ensure the problem does not continue to occur. An alternative solution for the company is to restructure its credit offering to eliminate the clause that converted the contract into a five year term. It is not reasonable to charge a customer for five years to acquire a consumer good in the technological industry. The firm should limit its financing terms to a maximum of two years. A way to ensure that the company can keep the monthly payments low for the customers is by lowering the acquisition cost of the Dish antennas. There is more money to be made in the servicing contracts than in sales of equipment. A second solution that should be implemented in conjunction with the first solution identified is to start a new ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Whirlpool Credit Scandal Term Paper Example | Topics and Well Written Essays - 750 words”, n.d.)
Whirlpool Credit Scandal Term Paper Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/business/1449501-ethics-project
(Whirlpool Credit Scandal Term Paper Example | Topics and Well Written Essays - 750 Words)
Whirlpool Credit Scandal Term Paper Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/business/1449501-ethics-project.
“Whirlpool Credit Scandal Term Paper Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/business/1449501-ethics-project.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Whirlpool Credit Scandal

Accounting Scandal

.... The Enron executives pleaded to the “fifth degree” and somehow finally understood the gravity of their consequences. Lastly, the idea of raising high capital by investing in risk venture areas should be avoided. In order to maintain a high credit, Enron relocated its high venture assets into a separate “special purposes entity.” Clearly, the management should be aware of these flaws and do must everything in its power to avoid this for the sake of the company’s ability to thrive in the long run. ***You may add other information (facts) that you believe is important in understanding the  nature of the accounting scandal which you have chosen. Works Cited "The Corporate Scandal Sheet -...
4 Pages(1000 words)Essay

Supply chain management: Whirlpool

...achievements in this regard is the fact that Whirlpool has devised a mechanism to keep their IT budgets and costs down over a long term. Whirlpool has developed its expertise in leveraging the SAP NetWeaver in such a way that it is now able to develop its capabilities and keep the costs down. The fact is that integration of IT in the business model has brought all the departments of the organization closer than ever. Communication amongst the departments has improved, in fact, now the employees of Whirlpool, whether they are from Germany, India, Brazil, US or any other geographic region, are able to label themselves as a part of one global team. Credit in this regard...
6 Pages(1500 words)Term Paper

Supply Chain Management in Whirlpool

...?Supply chain management in Whirlpool The Whirlpool Corporation is the U.S. based manufacturer of home appliances with headquarters in Michigan. Employing more than 80,000 employees, it manufactures and sells a wide range of home appliances under various brand names including Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Bauknecht, etc in around 170 countries. (“Whirlpool Corporation”). It has annual sales of over $19 billion, and with its acquisition of Maytag Corporation in 2006, Whirlpool Corporation surpassed Electrolux and became world’s largest home appliance manufacturer. (“Whirlpool Corporation”). Unlike its...
5 Pages(1250 words)Research Paper

Watergate scandal

...ALL THE PRESIDENT'S MEN All the President's Men is one of the most riveting and well-received books of the 20th century, written in 1974, the bookwent on to win Pulitzer Prize for its original plot and gripping investigative journalism. The book was later made into a movie in 1976 and was equally successful because of some famous names and superb performances. Robert Redford along with Dustin Hoffman played the roles of Woodward and Bernstein, two Washington Post journalists, who brought President Richard Nixon down when he was found involved in Watergate scandal. In 1974, Woodward and Bernstein published what would become the greatest scandal of all times. Richard Nixon and some other members of the...
2 Pages(500 words)Book Report/Review

Whirlpool Corporation

...Question The company faced a number of challenges during the end of the decade 1990. The challenge was to survive and sustain a billion annual growth in a highly competitive home appliances business. The company serves customers in 170 countries and makes a revenue in flow of over $13 billion per annum and stays at the top of the home appliances business across the globe. Whirlpool was under threat and its margins were fast depleting. Three key factors were identified as the root cause of these changes: 1. Materials Management: The Company was besieged by the Asian companies who could make the same products for much lesser cost because of their sourcing comfort. Better sourcing or material management was becoming...
7 Pages(1750 words)Essay

Whirlpool Corporation

...Question Whirlpool had operations in more than 170 countries and had a revenue flow that exceeded $13 billion dollars per annum. The world leader in home appliances business, this is a truly multinational company. During the 1990s the rise of the East Asian tigers had a string of home appliance businesses come from there. The competition was immense and this led to depleted margins for Whirlpool. Whirlpool had to necessarily counter this threat. The main issues that were causing the problem for Whirlpool include the following: 1. Cost of the spares was a major concern for the company since most of the Asian companies could produce the same products with similar features...
7 Pages(1750 words)Essay

Whirlpool Leadership Approach

...Whirlpool Leadership Approach The change of existing organizational practices can result to the improvement of critical organizational sectors. This phenomenon has been made clear in Whirlpool; in the past, the specific organization had failed to develop an effective strategy for recruiting and retaining talent, a term used for describing employees in all organizational departments. The continuous increase of competition in all industries worldwide has led the firm’s CFO, Roy Templin, to review the firm’s leadership approaches, aiming to improve the organization’s processes for attracting and retaining talent; the achievement of this target would help to improve the performance of the firm’s finance sector, which is a key part... of the...
3 Pages(750 words)Essay

Accounting Scandal

...Introduction The Enron Scandal is one of the main scandals that rocked the corporate world in history. The scandal is cited in most corporate governance texts and it explains a lot about the need for strong controls and honesty in financial reporting. The Enron Scandal is credited for acting as a catalyst for the Sarbanes-Oxley Act which sought to put more reporting requirements in corporate entities. Enron involved major issues and matters with dishonest reporting and corporate governance requirement overrides. This paper will examine the Enron scandal and its significance to accounting. It will describe the companys activities and the issues that came up with it. Background of Enron Enron was established in 1985 by a merger... of...
5 Pages(1250 words)Research Paper

Marketing and Advertising of Whirlpool

...Marketing and advertising of Whirlpool Marketing and Advertisement of Whirlpool The marketing effort of Whirlpool is designed to showcase the power of simple chores having the ability to drive greater things that can make a difference in people’s everyday lives. The company is seeking to alter people’s way of mind about the everyday effort they make to keep families running. Hence, the company’s biggest campaign brand efforts, "Every Day, Care". The brand is meant to shift away from the advertisements that are functionally focused on the fundamental emotional benefits that the companys products produce. According to Jon Hall, Whirlpool’s senior manager, the marketing...
1 Pages(250 words)Essay

Whirlpool Corporation

...Whirlpool Corporation Whirlpool Corporation serves as a global leader in the manufacture and marketing of key homeappliances, the company undertakes its operations in about 13 countries and markets its products inn approximately 170 countries, while following major brand names including KitchenAid, Whirlpool, Roper, Ignis, Bauknecht, Brastemp, Inglis, and Consul. The company is also a major supplier of roebuck, Sears, and Co, or various home appliances, which are marketed under the brand name Kenmore (Whirlpool). In its operations, Whirlpool is structured in diverse strategic business units. It comprises of the global air treatment, the microwave oven...
3 Pages(750 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Term Paper on topic Whirlpool Credit Scandal for FREE!

Contact Us