Scott Paper Company
Scott Paper Company is a $4.7-billion company that produces paper and personal care products. Scott was founded in 1841 by two brothers, E. Irvin and Clarence Scott who opened and operated the business out of Philadelphia, Pennsylvania. The brothers started the company as a means of improving sanitary conditions and marketed the first roll of toilet tissue. (Gilson, Cott, 2006)They gained worldwide recognition and success for their paper products that met the everyday needs of all individuals.
In 1993, after a series of unsuccessful business ventures, lost revenues and lagging stock prices, the Board of Directors hired a professional restructuring agent named Albert J. Dunlap. Dunlap was known for his ability of restoring profitability and turning around companies. Al Dunlap came in and made the decision to eliminate 1/3 or 11,200 employees and sell 2.4 billion dollars of unnecessary businesses. He also moved the company from Pennsylvania to Florida and finally merged with Kimberly Clark.
This case study will examine the ethical tactics used by Mr. Dunlap in restructuring the world's largest producer of tissue products.
Symptoms of the Problem
Scott Paper had tired product lines, unprofitable business ventures, slow revenues and their stock price was falling as well. (Trevino and Nelson, (2004))These are all signs that the business was in trouble. The board of directors recognized that something had to be done to rejuvenate the business. Having a good product and a needed product is not always a guarantee that the business will stay on top, especially when your competitors are making use of marketing tools and adding new product lines. The executives decided to enlist the help of an outsider, Albert J. Dunlap to apply his tactics of revamping slumbering companies.
Root of the Problem
The team of management executives took...