You Make the Call-Situation 2

question 77

Essay

You Make the Call-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.

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Definitions:

Rationalization

The cognitive process of logically justifying behaviors, decisions, or beliefs that might otherwise be unacceptable or irrational.

Rejection

The act of being dismissed or refused acceptance, love, recognition, or acknowledgment by others.

Coping Strategy

Techniques or methods employed by individuals to manage stress, emotional discomfort, or adversity, which can be adaptive or maladaptive.

Detachment

A state of emotional disengagement or withdrawal from previously engaging activities or relationships.