By the mid-1970s Harman-Kardon was a powerhouse in the U.S. stereo industry. Importantly, the company profited by pioneering the concept of separate components; instead of selling stereo systems as integrated units, Harman-Kardon began selling separate receivers, speakers, amplifiers, and other pieces that buyers could purchase separately and wire together to tailor their own home sound system. By 1976 the company was generating a whopping $136.5 million in annual sales and churning out a healthy $9.1 million in annual profits.
Meanwhile, Harman continued to pursue additional interests, including politics. Indeed, in 1976 newly elected president Jimmy Carter appointed Sidney Harman to the post of Undersecretary of Commerce. Harman accepted the job and in 1977 sold his 25 percent stake in Harman-Kardon to Chicago-based corporate behemoth Beatrice Foods. Harman pocketed $100 million from the sale and went on to achieve notable successes in the Carter administration.
Beatrice, in contrast, mismanaged its Harman-Kardon subsidiary one of 200 under the Beatrice umbrella and promptly ran it into the ground.Beatrice effectively butchered the company, selling off some chunks of the business and mismanaging what remained. By 1980 only about 60 percent of the organization of which Harman-Kardon had been a part before Sidney Harman exited remained. The original Harman-Kardon division, in fact, had been sold to a Japanese company named Shin Shirasuna, which was later absorbed by the giant Hitachi group of companies. Basically, all that was left of Harman’s original company was JBL a loudspeaker business and some international distribution companies. Although Beatrice had damaged it, JBL remained a respected manufacturer of high-end professional speaker systems; JBL, founded in 1946, had helped to pioneer the loudspeaker industry.