Management And Org. Structure

It is almost always a team of people doing a task is better off than a person doing it. And if the leader is a narrow-minded, tyrant that has the stubbornness of a 5-year old child and the temper of a grumpy old person constantly on the verge of explosion, it is sure that the autonomy of the company will by out of sync. It was 2 years ago that a CEO had almost single-handedly almost brought a company to its knees, sending shock throughout all corners of Wall Street. He went by the name of “Chainsaw Al.” The near crumble of Sunbeam Corporation, a company that specializes in making household and outdoor goods, laid basically in the personality of Al Dunlap and his style of management, where he was autocratic and the structure was too top-down. When organizational structure is so top-down that information and advice only flow downwards and employees’ suggestions are ignored, problems are bound to occur sooner or later. After his one-man show, conducing chaos and disorder, the board of Sunbeam could no longer stand the horrid situations and fired him.

“You guys are responsible for the demise of Sunbeam! I’m here to tell you that things have changed. The old Sunbeam is over today. It’s OVER!!,” Dunlap screamed at his executives (Byrne 132). “It was like a dog barking at you for hours. He just yelled, ranted, and raved. He was condescending, belligerent, and disrespectful,” recalls Richard L. Boynton, president of the house-hold products division, during their first of many horrifying executive meetings (Byrne 132). Dunlap had made a name for himself on Wall Street by previous reigns as the best CEO there is, by way of a harsh, tyrannical attitude displayed by mass layoffs to cut excess baggage and a military-like atmosphere. A good leader is someone that shows and leads his troops into the direction that is right for the corporation. Dunlap clearly had a clear idea of what direction he wanted Sunbeam to go in, it was his way of leading them towards his vision that was wrong. One of Al Dunlap’s major faults was his use of power, which lead to doubts in his non-programmable decisions and a group of unhappy campers in his office.

Power is the potential to influence people and their behaviors to accomplish something. Al Dunlap had many forms of power that enabled him to lead Sunbeam. First of all, he had legitimate power, power based on the formal position in the organization's hierarchy, because he was picked by the board of directors to be the next CEO. Al Dunlap had the expert power, the know-how of turning a company around since he had saved companies in the past from nearly going into flames such as American Can, Lily Tulip, Crown Zellerbach, and Scott. The last form of power that he withholds is coercive power, which is the ability of a leader to obtain compliance through fear of punishment. Throughout the drama at Sunbeam, this kind of power was the most evident and influential in relation to all the disorder that happened. In Dunlap’s presence, knees were known to tremble and stomachs to churn. Executives say that he would throw papers or furniture, bang his hands on his desk, and shout so ferociously that a manager’s hair would be blown back by the stream of air that rushed from Dunlap’s mouth (Byrne 138). Everyone was so afraid of him, that no one dared to challenge his decisions, even when they became unethical and illegal by standards of any company’s corporate culture. In any company, it is important that information flows from bottom to top and top to bottom to bring out the best transparency in the conditions of the company. People were so intimidated that when confronting him, suggestions for improvement were left at the front door of his office. “In a meeting with Al, you are not there to tell him anything. You are there to listen. If you didn’t hit your numbers, he would tear all over you,” said William Kirkpatrick, an operating manager who worked with Dunlap at both Scott and Sunbeam (Byrne 138). Al Dunlap led by directive behavior, where there was a strong reliance on one-way communication, giving out tasks, and telling followers what to do and often how to do them. Also, having power does not give you the right to disrespect the people under you. Mutual respect is a required common ground in order for harmony to prevail in the company.

As relationships soured and people losing hope, decision making strictly funneled down to Dunlap since he was basically unapproachable. It is almost a known fact that management teams are more likely to make better decisions that one person based on his own perspective. This was evident as time passed during his reign. Dunlap’s restructuring plan called for laying half of the company’s 6000 employees and 87% of its products. A human resources division was cut from 75 to 17 (Byrne 134). These major layoffs led to major shortages of skilled and experienced talent throughout the corporation so that the amount of work needed to be done was impossible. Dunlap’s layoffs also included the firing of computer staff. In the midst of all this confusion, the company decided to upgrade computer systems, but with no back up available. Problems occurred, computers went down for months and orders had to be taken down manually, it was a disaster. “We couldn’t bill our customers. We couldn’t keep track of our shipments. Customers were calling day and night, asking where their orders were. Our customers were irate,” described Donald Uzzi, executive vice-president for worldwide consumer products (Byrne 134). As time passed, managers got fed up with how Dunlap was constructing operations. As his decisions made situations worse, he still expected his employees to make the originally expected number of sales. If Dunlap had a management team that specifically served as his advisors giving him new perspectives on what may be a better way of doing things, such incidents would not likely to have happened.

Leadership where people work upon fear and intimidation is not the best kind of motivation to bring the best out of employees. The whole autonomy of the company is thrown off balance where there is just not a happy working environment. Dunlap can be categorized as an “extreme” achievement oriented leader where he set high goals for his employees to achieve, so high they were basically impossible. Often you would hear Dunlap or Kersh(Dunlap’s right hand man) say after giving an employee a revenue and profit number, “We don’t want any bull*censored*. Your life depends on hitting that number” (Byrne 138). And with Dunlap’s infamous bad temper, not meeting the numbers means an encounter more serious verbal abuse. The pressure was most felt by people who had to actually report to him. As these people felt the heat around the corner, they felt the need to pass the pressure and intimidation down the chain of command. So like dominos, the morale of employees just began to fall as everyone as numbers became harder and harder to achieve. Through means of fear and pressure, these people were clawing for solutions just to meet their set goals to keep their job. This included unethical acts and debatable illegal accounting procedures. Commissions were withheld from independent sales representatives, bills went unpaid, and some vendors were forced to accept partial payment. In terms of accounting, the company sold discounted products if they were bought six months before needed, which meant booking of future sales in the present. Everybody’s goal was just to meet the number to avoid the wrath of Dunlap.

Dunlap also made his managers guilty for not making the numbers since he had handed out huge stock options upon his arrival to Sunbeam, making them millionaires almost immediately. These options, in a way, widened Dunlop’s employees’ zone of indifference, pushing themselves to do things beyond standard corporate culture and their own set of morals. Dunlap has always had a way of making his employees feel guilty for not meeting his demands. One employee recalled him saying, “You are being paid to work here, and you can become rich because I’ve given you all these options. And you’re letting me down. I’m working hard for you on the Street, and you’re letting me down” (Byrne 138).

Dunlap basically did not work with a group or team to help him on nonprogrammable decisions that were critical in the company’s success. But he did have a right hand man, Russell Kursh, who was the Chief Financial Officer who had major control over the accounting books making it easy to alter them. Eventually, bad decisions and terrible sales also finally caught up to Dunlop who seemed to have an unwavering and unconquerable conscience. “The day to day atmosphere at the company has really deteriorated. Al is no longer in touch with the business and what’s going on at the company. Al isn’t talking to people. He has cut himself off,” said Fannin, Sunbeam’s general counsel (Byrne 128). Around mid-June, the board Dunlap carefully selected himself decided to give him a taste of his own medicine, asking him to leave, believing he was guilty of hiding the true condition of the company. The stock price explains the highly intense roller coaster ride while it landed at 8 13/16 the day Dunlap was fired, lower than the level it traded when Sunbeam announced Dunlap’s hiring(mid-1996), compared to a high of 52 in early March 1998.

Great leaders lead their troops with a charisma that have his employees want to follow him into battle and die under his command no matter how hard the war is. Great companies have employees that love their organization and are willing to go the extra mile to make the company a more profitable one. Leaders do not get respect when they abuse the powers they have. With the organization granting him power, he took it to bad use by implementing his narrow-minded decisions that only displayed his perspective of situations. The scene is even worse when his personality contains a temper with a short fuse, an ego stiffer than concrete, and a mouth that has a snap more ferocious than a crocodile. Also, I believe that his whole goal of improving the company came from the wrong starting point, which was solely the shareholders. He simply went out of the way to please his shareholders at the expense of treating his employees like child laborers in Burma. I believe the key to success always starts with happy employees who respect their leader.

The factors of a bad leader, no team work, a bad personality, and the wrong purpose for improvement lead to a bad situation that had no ending of continuous problems since not many people had the power to control him, besides the board of directors which he had hand-picked himself. Dunlap’s firing turned way overdue mainly because many people had relationships with Dunlap that went way back in times. And even when he did get fired, many did not want to be the one announcing his departure. Dunlap’s firing was bound to happen sooner or later since nothing he had done profited the company. Feeling betrayed by Sunbeam and his board, one of his last quotes at a leadership lecture in Australia was “If you want a friend, buy a dog. I’ve got two” (Byrne 149). Even after all the chaos he caused, he is still so stubborn and caught up in his ego to realize what he had done wrong at Sunbeam. Admitting to one’s mistake is one of the first steps towards improvement and success. It is no wonder why he’s still unemployed today.


Byrne, John A.. 1999 October 18. “Chainsaw.” BusinessWeek, 128-149.

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