Al Dunlap and Sunbeam Corporation

Al Dunlap and Sunbeam Corporation

This research examines ethical issues raised by the tenure of Al Dunlap at Sunbeam Corporation. The plan of the research will be to set forth the circumstances under which Dunlap came to be the chief executive officer of Sunbeam and then to discuss the biblically based ethical implications of his accounting practices and his treatment of employees.

In July of 1996, Mr. Al Dunlap was successfully recruited to the position of CEO of Sunbeam Corporation, a publicly traded manufacturer and distributor of household consumer goods. At the time, Sunbeam “was a bloated, barely profitable shell of a company that had suffered through bankruptcy . . . and a parade of ineffective CEOs” (Sellers, 1998, p. 118). Thus the company seemed an ideal management target for Dunlap, who brought to the position a reputation for putting other ailing public companies into profitable turnaround, including Lily-Tulip, Crown-Zellerbach, and Scott Paper. Dunlap was to describe himself as one whose “specialty has been saving companies on the verge of collapse, but I don’t just pull them away from the brink. I give them strength and systems for surviving the long days and nights ahead” (Dunlap & Andelman, 1997).

The methods Dunlap used to save companies from collapse were controversial because of the human costs associated with them. In a typical turnaround project, Dunlap would restructure companies by means of staff reductions and cost cutting. The intended result for the company would be cost savings on one hand and an increase in stock price and shareholder value on the other. Dunlap’s management fee for accomplishing such result would run to $100 million or so. The Sunbeam project ran more or less true to form between July 1996 and March 1998:

1. Sales rose dramatically, owing partly to promotions funded by a 2500% increase in advertising spending.

2. The stock price of Sunbeam (SOC) rose from $12.50 per share to $53 per share (Lim, 1998).

3. Eigh…

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