Larry Ellison has been the CEO of Oracle since it was founded in 1977.

Yes it is true; the day has finally come when Larry Ellison, the founder and CEO of the world’s largest software company Oracle, has officially stepped down as CEO. Ellison has been holding this position since the company started back in 1977, and he played the most critical role in turning Oracle into what it has become today: a software giant that has annual sales of $38 billion. The biggest question being asked since this move occurred is whether or not Oracle will become the next IBM, a company who also had a change in their CEO and almost went out of business as a result of it.

Early results are saying this might in fact happen, as Oracle’s stock had already dropped 2.5% in after hour trading when the news of Ellison dropping as CEO had come out. However, with that being said, this move, in my opinion, will actually benefit Oracle in the long run, and here’s why.

Ellison will still be a part of the executive team, as he will focus strictly on the technological department of the company, and now the old CEO title is split into two Co-CEOs: Mark Hurd and Safra Cratz. This is a great breath of fresh air since Oracle’s business model is extremely outdated, as they still use the tactic of a pushy sales team to make businesses pay large license fees as well as high maintenance charges for their products. This makes customers pay more and enables their rivals like MongoDB to come in and steal some customers and sales. With new co-CEOs, Oracle is extremely likely to change their business model, and as a result, they will most likely fix these issues, making a stronger business model and therefore, a stronger company.

Although nothing is certain as of right now, a change of management for a company that could improve its business model can only lead to better things in the future, but only time will tell.

Works Cited:

“Transition, Not Succession.” The Economist. The Economist Newspaper, 25 Sept. 2014. Web. 26 Sept.      2014. <http://www.economist.com/news/business/21620196-larry-ellisons-job-swap-only-start-big-     transition-firm-he-founded-transition>.

Wilhelm, Alex. “Oracle Stock Drops 2.5% On News That Larry Ellison Has Relinquished His CEO Title |     TechCrunch.” TechCrunch. N.p., 18 Sept. 2014. Web. 26 Sept. 2014.      <http://techcrunch.com/2014/09/18/oracle-stock-drops-2-5-on-news-that-larry-ellison-has-     relinquished-his-ceo-title/>.

When one thinks business, the first things that come to mind are money and profit. However, another key element to the long-term success of any company is ethics. Nike is a company that has been a powerhouse in the sportswear industry for decades and although profits have never been a problem, ethics has.

In the article “How Nike Solved Its Sweatshop Problem,” a history of Nike’s poor ethics over the years is explored. It specifically showcases how rough of a past Nike has had with community and family environments, as they have ran sweatshops in Bangladesh with extremely poor working conditions. These working conditions in the sweatshops had gotten so poor that it “badly tarnished the company’s image and hurt sales.(Nisen)” To make matters even worse, Nike would take these large sums of money they saved from low labour costs and spend it on large advertising campaigns featuring prominent athletes, most notably Michael Jordan. So how does this connect to Ed Freeman’s Stakeholder Theory?

Throughout the video, Freeman makes multiple points about how and why a business should consider not only the financiers but everyone else as well, which includes customers, suppliers, and most importantly communities. He states that a firm who does not have high business ethics will decline.. Nike fell victim to this exact concept as they saw the overall success of their company declining when they received negative media attention for their sweatshops. However, since they were able to adapt and fixed most of their ethical issues they have stabilized their position at top of the sportswear industry and have not looked back since. Therefore, proving how Freeman’s Stakeholder Theory is something that is existent in today’s business world.

Works Cited

Nisen, Max. “How Nike Solved Its Sweatshop Problem.” Business Insider. Business Insider, Inc, 09 May 2013. Web. 10 Sept. 2014. <http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5>.

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