Dell & the Sec
Dell and the SEC
Kent H. Shanks
Argosy University-Hawaii
Dr. Gholam Khaleghi
August 14, 2013
Abstract
This research paper describes the crisis scenario of Dell, Inc. as the company faced securities fraud allegations and the leadership style which was present during this crisis period. The leadership styles are analyzed and evaluated to determine how decision-making was impacted by the diverse styles used by the firm. The research presents an alternate style which would be effective during this crossroads period in addition to the researcher’s personal leadership style and its potential impact during the same period. Finally, the researcher evaluates this case from a learning perspective and how corporations can avoid a similar occurrence within their own firms.
Dell and the SEC Dell, Inc., one of the largest computer manufacturers in the world, was accused of securities fraud in October, 2008. This action was classified as a class action lawsuit which was brought about by Dell’s corporate investors who purchased common stock between May, 16, 2002 and September 8, 2006. Dell, Inc. was formerly the number one PC manufacturer in the world during the dot.com boom, but the firm began to lose its competitive edge in late 2001. By 2002, it was surpassed as the number one PC manufacturer by Hewlett-Packard. Although revenues began to decline its stock price exceeded Wall Street expectations and rose to a high of $42.57 in December of 2004 (Dell, Inc. Securities Litigation, 2008). Dell is currently listed as the third largest worldwide producers of PCs, following both Hewlett-Packard and Lenovo. Throughout the first decade of the 21st century, Dell has continued to expand its line of desktop and notebook PCs in addition to computer peripherals and data storage systems. The firm publicly stated that it will privatize the company in 2013 for a reported price of $24.4 billion (Hoovers, 2013). Dell’s direct distribution model began to decline in late
Kent H. Shanks
Argosy University-Hawaii
Dr. Gholam Khaleghi
August 14, 2013
Abstract
This research paper describes the crisis scenario of Dell, Inc. as the company faced securities fraud allegations and the leadership style which was present during this crisis period. The leadership styles are analyzed and evaluated to determine how decision-making was impacted by the diverse styles used by the firm. The research presents an alternate style which would be effective during this crossroads period in addition to the researcher’s personal leadership style and its potential impact during the same period. Finally, the researcher evaluates this case from a learning perspective and how corporations can avoid a similar occurrence within their own firms.
Dell and the SEC Dell, Inc., one of the largest computer manufacturers in the world, was accused of securities fraud in October, 2008. This action was classified as a class action lawsuit which was brought about by Dell’s corporate investors who purchased common stock between May, 16, 2002 and September 8, 2006. Dell, Inc. was formerly the number one PC manufacturer in the world during the dot.com boom, but the firm began to lose its competitive edge in late 2001. By 2002, it was surpassed as the number one PC manufacturer by Hewlett-Packard. Although revenues began to decline its stock price exceeded Wall Street expectations and rose to a high of $42.57 in December of 2004 (Dell, Inc. Securities Litigation, 2008). Dell is currently listed as the third largest worldwide producers of PCs, following both Hewlett-Packard and Lenovo. Throughout the first decade of the 21st century, Dell has continued to expand its line of desktop and notebook PCs in addition to computer peripherals and data storage systems. The firm publicly stated that it will privatize the company in 2013 for a reported price of $24.4 billion (Hoovers, 2013). Dell’s direct distribution model began to decline in late
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