Let the race begin: As Dell has started to contemplate the idea of going private, the bidding war for control over this company has emerged. Many view Dell as being doomed, a company that has failed to redesign their once prosperous supply chain and has succumbed to the pressures of the increasingly standardized field of IT. On the other side of pessimists we always have our optimists, the group of individuals that believe Dell still has the potential to rise up and adapt to the new challenges of computer manufacturing. We all know that Dell has experienced issues that can be connected to how computer manufacturing has become increasingly imitable, but I would like to argue that Dell’s products and technologies are not the sole contributors to their current issues, but their flawed relationships with employees and business partners are as well.
Like Walmart, Dell has always been one of the companies that has thrived from squeezing the costs of their suppliers, constantly starting bidding wars between these potential suppliers. Stephen R. Satterwite worked with Dell with this supplier-like relationship through his IT services company and has recently begun to write about problems he saw with Dell. Satterwite’s company was initially successful in reacting to the cost-cutting pressures of Dell, but when business became less prosperous the real problems of Dell came to light. Satterwite found that dissatisfaction with Dell was found across all different kinds of people: consumers, business partners and employees. In his personal experience, the amount of pressure and guilt that Dell constantly placed on his company was bad enough for his company to cease doing business with Dell, despite the potential revenues.
Much of this dissatisfaction stemmed from the flawed culture of Dell, a culture which was centered around maximizing profits, with other needs in the background. Their attempts at maximizing their profits were initially successful, but as more competitors arose their success began to decrease. A study found that 50% of Dell’s employees would leave for a better job. What does it say about a company if half of their employees would be willing to leave?! A key component of a company’s success is their infrastructure (a member of Porter’s value chain) and like Satterwite, I would like to argue that many of Dell’s current problems have come from its disjointed culture. Satterwite offers that Dell’s alternative for success must include a fight against their cultural issues; if they fail to address it the world will continue to see a dark future for this company. Now is the time to ask would you do business with Dell? Do you feel that Dell ‘s relationships with its business partners, employees and consumers are just as important as how they execute the various components of their supply chain?
For more detailed information on Stephen R. Satterwite’s story visit: http://www.forbes.com/sites/forbesleadershipforum/2013/04/01/dells-poisonous-culture-is-sinking-its-ship-and-raises-questions-for-potential-buyers/2/