Dell: Post-Scandal

by Whitney Coble

After reading our 2010 article about Dell, I thought that surely CEO Michael Dell would have stepped aside.  In the article, Dell was strongly criticized (and sued) for knowingly distributing faulty computers that were poised to lose large amounts of data or even catch fire.  In addition, the SEC was preparing to investigate Michael Dell for misrepresenting financial information. I was surprised to learn that not only is Michael Dell still the CEO but that he has a rosy outline for Dell's future (admittedly moving further away from the PC business).  It made me wonder, what sort of value do we place on the ethics of the supply chain as a society?  For example, many people boycott Wal-Mart because of unflattering child labor reports.  I would imagine that consumers would be skeptical of purchasing Dell products after the company misled customers and misrepresented its financial situation.  But Dell appears to have side-stepped these issues by focusing on different business ventures.

For example, in an interview in a public venue, one person asked how Dell was revitalizing its brand.  Michael Dell answered that they have 20,000 direct sales people pitching its new brand and every time they acquire a new company, they can retell their story.  In fact, he says that being unencumbered by the past is what allows them to differentiate themselves from companies like HP.  They particularly target start-ups, which he says tends to adopt new technologies first.  Michael Dell also points out that they do well with verticals - that Dell is the leader in healthcare IT and they have this unique expertise.

Are you surprised that Michael Dell is still CEO?  If you were a start-up, would you be concerned about working with Dell considering their recent past history of problems with the supply chain?