The American Medical Association-Sunbeam Deal (C): The Denouement

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The American Medical Association-Sunbeam Deal (C): The Denouement

Supplement

Reference no. 9-802-091

Subject category: Case Method and Specialist Management Disciplines

Authors: Ashish Nanda (Harvard Business School); Kimberly A Haddad (Harvard Business School)

Published by: Harvard Business Publishing

Originally published in: 2001

Version: 14 January 2002

Length: 9 pages

Data source: Published sources

Topics: Associations; Business ethics; Conflicts of interest; Contracts; Health; Leadership; Litigation

Share a link: https://casecent.re/p/41617

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Abstract

On 5 September 1997, the American Medical Association (AMA) withdrew from a contract with Sunbeam Corporation, the maker of small home appliances. Sunbeam sued the AMA to pay for the damages or to comply with the contract. The fracas led to the dismissal of three top AMA executives. The AMA initiated an investigation into the episode. As a result of the failed deal, the AMA's chief executive officer resigned, and the failed deal eventually cost the AMA an estimated USD16 million. A rewritten version of an earlier case.

Location:

Illinois

Industries:

Health care services; Retail trade

Size:

250,000 employees, USD100 million (membership revenues)

Other setting(s):

1997