System of Inquiry-Target Corp.

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System of Inquiry:

Sears, Roebuck, and Co.

Dirk Hopstein

University of Phoenix

PHL323, Ethics in Management

March 4, 2010



Sears, Roebuck, and Company (Sears) opened its doors in the 1800s and expanded rapidly due to the goods and services it provided. During Sears' rapid growth, it was also gaining an impeccable reputation with the public. Sears had a large U.S. market share until the 1980's when it had to start competing with Wal-Mart. Even though Sears attempted to regain some of that market share by lowering prices, their earnings kept declining. It was in 1991, when Sears introduced its productivity incentive plan, which caused Sears to not only lose more revenue but the public trust. Add to that, lawsuits which began with the State of California to be sold by 41 other states due to complaints of faulty workmanship and overselling products and services in their auto care centers which customers did not need.

This paper reviews the Sears Auto Center scandal I will discuss the facts, symptoms, and root causes of the problems, what worked, what did not work, and review 7 crucial questions about the Sears case study. I will conclude with alternatives and recommendations regarding what Sears could have done to have a better outcome than the one which created their scandal.

In 1992, the big question asked was what was going to be the long term impact from this scandal. If I take today's current events in business scandals, I think I can sum it up as a huge impact. Sears decided in one campaign to increase production and revenue and capitalize on greed. Today, it is not uncommon for companies and organizations to...