Dunlap's Turnaround at Scott Paper

Dunlap's Turnaround at Scott Paper Scott Paper began as a producer of bags and wrap¬ping paper and later expanded into making toilet tissue, paper towels, paper napkins, and other consumer products. In 1994 it was the eighth largest paper company in the United States and had the second largest market share of tissue products. After a six- month search, rather than opt for an executive with experience in packaging and con¬sumer goods, Scott Paper's board of directors decided to hire Al Dunlap as chairman and CEO because of his track record in radically restructuring companies. A number of Scott's board members saw Dunlap as a person who would inject new life and energy into a company they viewed as bureaucratic, slow-moving, and lacking a sound strategy for the future. In 1993, Scott Paper's sales declined 7 percent, operating profits were down 19 percent, net income was down 30 percent (before restructuring charges that resulted in a $277 million loss for the year), and the company had $2.5 billion in debt.