The Accounting Malpractices of Sunbeam - Essay Example

At Sunbeam, he attempted the same strategy and did nothing creative about it. In order to cut short the time frame to correct the company's book, he resorted to sales and accounting frauds and the debt financing of three acquisitions to increase the turnover and asset base of the firm. The celebrity CEO was also followed closely by the media who was highly skeptical of his style of aggressive and inhuman decisions. The over-ambitious CEO was overpowered by the media who alerted the shareholders and the authorities about his way of functioning and the glorification of the company destined to doom.

The senior management of the company also did little to control the massive information leakage once the media opened the lid of the mismanagement can. The CEO had cut over half of Sunbeam's jobs soon after he took over. The share price shot up to over US$ 53 in 1997 from a mere US$ 12. Many shareholders had already sold their stake in the company. But growing public concern led to the CEO himself being victimized in the end. The board of directors fired Duncan to save their embarrassment and filed for closure. 3. Identify ethical issues that Dunlap's management team may have created by adopting a short-run focus on financial performance.

What lessons could be learned from the outcomeDunlap's management team had overlooked the primary aim of all businesses - to create social wealth. He had specialized in the short run concept after he discovered the pleasure of making money by selling off his previous firms to high bidders who bought the revived companies to add to their wealth. But in the process of streamlining a sinking firm, he had thrown overboard a large chunk of its employees and the beneficiaries of its functioning.