Homework Question on Malden Mills
Please answer the following questions from the attached document: (each question should be answered in separate paragraph) & please make sure to write the number of question before the paragraph.
- What is your assessment of Aaron Fuerstein? Does he deserve to be hailed as a hero?
- What, if anything, could Fuerstein have done differently that would have averted his company’s bankruptcy?
- Why were politicians so supportive of Fuerstein’s efforts?
- What were the social consequences of plant closures and the elimination of manufacturing jobs? Does it make sense for policy makers to try to stem this tide?
Homework Answer on Malden Mills
Aaron Fuerstein had very ambitious goals, but he did not merit the title of a hero. The CEO’s decision to continue paying idle workers and re-equipping the mills with the finest equipment did not put into consideration the prevailing company’s financial position. Although, in the eyes of the public and his employees, he appeared to be doing the right thing, his actions did not place the key interest of the company at heart.
The CEO placed too much effort on increasing the company’s image through public relations (PR) and putting up new structures with new equipment, rather than assessing and addressing the real issue facing the company to revive the business. Moreover, even the insurance settlements had not been guaranteed and even the compensation package was contrary to the CEO’s original expectations, yet he spent beyond the insurance cover (Nohria and Piper 1).
In this case, Feuersten behaves as if all his decisions are final. Even as the CEO, sometimes it is good to consult experts and listen to the contributions of other relevant parties. The CEO should have sought to know why a number of managers in his company had questioned his decisions and actions, especially in relation to the rebuilding scale. In addition, he should have considered their concerns on rebuilding the mill within Northeast, the same location that other textile millers were leaving, to move to other low-labor cost markets since it signaled an important aspect of the industry.