Do you agree with the bonneaus decision to sell

Assignment Help Management Theories

Reference no: EM131385009

SITUATION 2
Ed and Barbara Bonneau started their wholesale sunglass distribution firm 30 years ago with $1,000 of their own money and $5,000 borrowed from a country banker in Ed's hometown. The firm grew quickly, selling sunglasses and reading glasses to such companies as Wal-Mart, Eckerd Drugs, and Phar-Mor. In addition, the Bonneaus enjoyed using the company to do good things. For example, they had a company chaplain, who was available when employees were having family problems, such as a death in the family. Although the company had done well, the market had matured recently and profit margins narrowed significantly. Wal-Mart, for example, was insisting on better terms, which meant significantly lower profits for the Bonneaus. Previously, Ed had set the prices that he needed to make a good return on his investment. Now, the buyers had consolidated, and they had the power. Ed didn't enjoy running the company as much as he had in the past, and he was finding greater pleasure in other activities; for instance, he served on a local hospital board and was actively involved in church activities. Just as Ed and Barbara began to think about selling the company, they were contacted by a financial buyer, who wanted to use their firm as a platform and then buy up several sunglass companies. After negotiations, the Bonneaus sold their firm for about $20 million. In addition, Ed received a retainer fee for serving as a consultant to the buyer. Also, the Bonneaus' son-in-law who was part of the company's management team, was named the new chief operating officer.

Question 1 Do you agree with the Bonneaus' decision to sell? Why or why not?

Question 2 Why did the buyers retain Ed as a consultant? (In answering this question, you might consider the quote by Bonneau.)

Question 3 Do you see any problem with having the Bonneaus' son-in-law become the new chief operating officer?

Reference no: EM131385009

Questions Cloud

Write code to store fictitious names in that array : An office building has two floors (0 to 1), each of which has four offices (0 to 3). Each office occupied by one person. Declare an array to store the names of occupants for each office. Write code to store fictitious names in that array

Identify economic legal and regulatory forces and trends : Identify economic, legal, and regulatory forces and trends. Critique how well the organization adapts to change. Analyze and explain the supply chain of the new division of the existing business.

What should the waughs have done to avoid given situation : How could the Waughs be disappointed with $32 million?- What should the Waughs have done to avoid this situation?

Discuss about the post given below : In order for counselors to effectively assist clients who are of a different cultural or religious background then their own, it is required that they become multiculturally competent. In highlighting the importance of being multiculturally compet..

Do you agree with the bonneaus decision to sell : Do you agree with the Bonneaus' decision to sell? Why or why not?- Why did the buyers retain Ed as a consultant?

What are the daily or weekly routines that occur : What are the daily or weekly routines that occur at your university, and what do they say about the culture? What are the formal events and celebrations that occur at your university, and what culture signals do they convey?

Compare the people in the above true stories : What might explain the difference between those who have positive feelings about cashing out and those who do not?

Determine the motivation for the sale : Check your local newspaper for a week or so to find a privately held company that has been sold recently. Try to determine the motivation for the sale.

Has the owner ever been involved in a harvest : Ask a local family business owner about future plans to harvest the business. Has the owner ever been involved in a harvest?

User Account

All Pages