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Second Innings as CEO for Michael Dell

by Jyoti Pal - February 4, 2007 - 1 comments

Michael S. Dell has retaken the chief executive post at Dell to help the company come out of the quagmire it finds itself in. He reclaimed the job following a class-action lawsuit filed against Dell by its shareholders. The outcome of the lawsuit is plain clear: Kevin B. Rollins who assumed the CEO job only two years ago is out and Michael Dell steps in to run damage control.

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[quote=Jyoti Pal]<div class="flexinode-body flexinode-1"><div class="flexinode-textarea-1"><div class="form-item">
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 <p>Michael S. Dell has retaken the chief executive post at Dell to help the company come out of the quagmire it finds itself in. He reclaimed the job following a class-action lawsuit filed against Dell by its shareholders. The outcome of the lawsuit is plain clear: Kevin B. Rollins who assumed the CEO job only two years ago is out and Michael Dell steps in to run damage control.</p>
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 <img alt="Second Innings as CEO for Michael Dell" src="http://www.themoneytimes.com/filess/" /><br /><a href="http://www.themoneytimes.com/filess/michael dell.jpg">Get original file (6KB)</a>
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 <p>Mr. Dell founded the company in 1984. He recruited Mr. Rollins from the consulting firm Bain & Company in 1996. Rollins moved steadily up the ranks, becoming president before he was promoted to chief executive in 2004.</p>
<p>Michael Dell spent no time in taking corrective actions and decisions (some of them harsh) to ensure future smooth sailing of the once numero uno company in its field. He has conveyed a sense of urgency and in an e-mail memo warning that the company may need to make personal and team sacrifices to ensure that the company is successful. </p>
<p>Michael is making decisions right and left. He announced that the besieged computer maker is quashing bonuses for 2006 and reducing managers to help cut costs and steer the company back toward dominance.</p>
<p>To provide some soothing effect he said that in exchange for not giving bonuses for 2006, the company would budget for "above-market raises" this year.</p>
<p>Mr. Dell categorically announced that he wanted to speed decision-making and eliminate redundancies.</p>
<p>In a written message to his employees he said, "We have great people, but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it and we have to fix it!" He further wrote, “We have a tough couple of quarters ahead, We didn't get here overnight and we won't fix things overnight either."</p>
<p>Statistically speaking, history is on Michaels’ side. Rudi Fahlenbrach, an assistant professor of finance at Ohio State University’s business school, claims that a company’s stock performs 9 percent better than the market after the return of a founder, which has happened with 28 companies since 1993. </p>
<p>Mr. Fahlenbrach said what millions of Dell’s shareholders and well wishers would be hoping for. “If I were to let my data speak,”, I’d predict Michael Dell will be running a stronger company in two years.”</p>
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