Case #1

Byte Products Inc.

Naren Desai

You have a viable alternative and valid theoretical analysis, but a bit brief. Clear instructions

from Board are necessary and you should hold mgmt. accountable to achieving specific goals

asap.

A Paper Submitted in Partial Fulfillment

of the Requirements for

BUS 496 Business Seminar

Fall Term 2014

Professor: Dr. Inge Kendall Maranto

September 2, 2014

College of Business and Public Management

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Byte Products Inc.
University of La Verne

Introduction:

Mr. James Elliot, CEO and Chairman of Byte Products, Inc., presents his

recommendation to the Board of Directors to purchase an existing plant in Plainville as a

temporary plant until the new one is on line in three years. All on the Board except Kevin

Williams from the eleven seem to favor the proposal. Byte Products has three existing plants

operating at full capacity (24 hours a day and 7 days a week).These three plants are: 1.Electronic

home components. 2. Sophisticated business components. 3. Engineering components. The new

plant of Arts manufacturing proposed to be built in the southwestern United States will require

three years before it is fully on line. This means that Byte cannot meet the anticipated demand

for its products (1). Alternative solutions have been explored, but were found unacceptable (2):

1.license Byte products and technology to other United States manufacturers, and 2.Overseas

facilities and licensing.

Top management found an existing plant in Plainville that would meet the company’s

immediate production needs until the new plant will be online in three years. The Plainville

facility had been closed for the last eight years. It would take about three months to get the

Plainville plant online. The discussion between Elliott and Williams focuses on the impact on the

town and on the potential 1,200 employees of opening this temporary plant. The town and the

townspeople had gone through a catastrophic closing eight years ago when the plant in question

was closed. A recess in the meeting is called and when the board meeting reconvened, a major

shift has taken place. The vote could be 7-4 or 6-5 for the proposal, but Elliot desires a
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Byte Products Inc.
unanimous vote. As the lengthy discussion ends - Mr. Williams is asked whether a compromise

can be reached. He responds, “I have to say no and I don’t see a middle ground.

Issues:

Under Strategic Management: Lack of strategy formulation that meets needs of firm (3).

And Corporate Legality versus Corporate Responsibility dilemma (4)

Under Corporate Governance: Role of the board in strategic management is what? inadequate?

(5)

OBJECTIVES

The objectives of this case analysis are to choose the best alternative solution not only for

the company, but also to the stakeholders and analyze the given situation through environmental

scanning and theoretical analysis.

Recommended Alternative Discussion and Theoretical Analysis: (You combined the two

here…)

Since Byte Pproducts has ve three existing plants operating at full capacity 24 hours a

day & 7 days a week,. and the new plant is proposed to be built in the sSouthw Western USA,

will requiringe 3 years before it is fully on line. This plan means that Bbyte does not have

reserve capacity at all and this current shortfall in capacity maycan become ever more

devastating in the future. . Alternative courses choices of licensed b Byte products and

technology to other U.S. manufacturers or of U utilizinge overseas facilities can compromise

Byte’s reputation and threaten the firm’s market share by offering poor quality products. In
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Byte Products Inc.
addition, there is the threat of revealing trade secrets and facing a cost increase by doing

business within a climate of globa lpolitical and economic uncertainty.

Solution:

Byte needs to move quickly to meet the demands of their customers without

compromising the cost or , giving room for competitors to enter the market, and needs athe

decision that works best to benefit all stakeholders overall.

In the given situation by using a SWOT analysis, we can U use the cCompany’s strength

as market leader (S) and a monopolisticy company to raise capital to facilitate expansion and

overcome the weakness of not meeting the continuing surge in in demand of its products (W).

(see Appendix) Byte can also tTake advantage of the current demand opportunity (O) to grow

and develop new product to capture another market niche share and eliminate reduce any

compeotatitors threat (T) by opening up the Plainville plant not as temporary, but as a permanent

facility that also has an R & D function. Byte can but start with a lease option to buy the plant

and keep it open and running as one more plant and add this plant to itsin company’s portfolios.

(Pro) This way Byte won’t face closing the plant in three years and demonstrate create healthier

Ccorporate rResponsibility. Ay and after three years Byte will have five plants with some reserve

capacity and everybody, all the stakeholders, will be happy. (Con)?

What is the policy the board should issue?

What measurable objectives are there for mgmt.?

What assumptions are you making?

Naren, FYI Here are other analytical tools that can be used to bolster your proposal?
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Byte Products Inc.
Process for creating a learning organization p. 12,

Implementing a strategic decision-making process p. 25,

utilizing a triggering event p. 22,

evaluating whether this decision is a strategic decision p. 23,

using Mintzberg’s modes to assess the firm’s pattern of decision making and improving it, p.

24-25,

evaluating the degree of involvement of Board in decision making as a gauge of the health of

the organization p. 45,

using Carroll’s responsiiblities to assess the options for Byte p. 71,

doing stakeholder analysis p. 75,

using Kohlberg’s levels of moral development to assess their options p. 81,

evaluating their choices based on ethical guidelines p. 83 ?

Appendix

Here youshould have put your SWOT analysis. As it is above, you have listed one item per
SWOT. Typically you should be listing 3 each per SWOT category to demonstrate your analysis
prowess () and then picking one of your best strengths (which you did) and talking about how
you want to keep it a strength!

Potentia
Naren Desai l Earned
A. Statement of problem 0.2 0.2
4-5 issues (Audit Section I, Current Situation , A-F)
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Byte Products Inc.
B. Final Decisions
Choose 1 alternative with pro/con 0.1 0.075
Specific board policy recommendation 0.1
Measurable objective for top mgmt 0.08
Assumptions you are making 0.02
C. Relevant Strategy Themes or
principles 0.2 0.1

D. Appendix 0.25 0.1

E. Grammar 0.05 0.04
Total 1 0.515