For a number of years, Scott McNealy has been Sun Microsystems’ leader and champion. Mr. McNealy carried the company through the wild 1990s and made profits for shareholders. Sun produced products that the industry wanted and needed and McNealy’s presence and vision kept Sun on the correct path. What happened to derail the Sun Express? Instead of listening to those who preached conservatism as the dot.com bubble burst in the early 2000s, McNealy conducted business as usual and with this approach made a big and costly mistake. Sun stock went from a high of $64 in 2000 to roughly $4 today. McNealy’s leadership style—optimism, daring, humor, and even outrageousness—that served Sun so well in the 1990s do not seem to be what Sun needs in the more cost-conscious 2000s. Friends have pleaded with McNealy to back off of his old approach a notch or two, but have failed to sway him. Is there any way out for Sun and Scott McNealy?

1. Do an online search of Sun Microsystems current status (or see www.sun.com) and review Sun’s history. Write two paragraphs reviewing management practices that have helped and hurt Sun in the past few years.
2. Review TWO current periodicals to determine views on Mr. McNealy’s leadership style and managerial decisions at Sun. Summarize your findings with at least two paragraphs.

NOTE FROM YOUR INSTRUCTOR: Students will find an abundant amount of material on the Internet and in current periodicals about Sun and Scott McNealy. The difficulties will also be reported. An excellent source is “A CEO’s Last Stand” by Jim Kerstetter and Peter Burrows in BusinessWeek, July 26, 2004, on pages 64–70. Students can also see a Q&A with Scott McNealy by going to www.businessweek.com/magazine/extra.htm. (These interviews are normally carried for some time on the magazine’s website.) Students should also appreciate the rich history of Scott McNealy and his leadership of Sun. This activity is a good study of how a senior executive can have difficulties in retaining power when economic and managerial decisions become difficult.

3. Assuming that you were hired as a consultant to the Sun board of directors, write a brief (at least two paragraphs) describing what should be done with the Sun management team. Make it clear whether the management team should be changed or whether economic and technological circumstances have caused the problems at Sun, meaning the current management team can still lead Sun to success.