The Recalcitrant Director at Byte Products, Inc.: Corporate Legality versus Corporate Responsibility (Executive Leadership)

Synopsis of the Case

Byte Inc. is a company solely involved in the manufacturing of components of electronics which are used in personal computers. Because of the surge in demand for its products that surpass its production rate, the company needs another facility to meet the demand.  Byte at the moment operates three facilities that are located in different locations. The three facilities run twenty-four hours all through the week. Due to the unsurpassable demand, the company management decides to open the fourth facility. However, this would take three years to construct.

On the other hand, the company insists on the increase in production without relenting. In case the production rate falls then the company risks losing its lead in the market and losing some of its customers to the threatening competitors.  The paper provides a detailed description of the Recalcitrant Director at Byte Products, Inc.: Corporate Legality versus Corporate Responsibility (Executive Leadership) and the necessary recommendations.

Relevant Factual Information about the Problem or Decision the Organization Faced

The CEO of Byte Jim Eliot has proposed a solution to help solve the company’s dilemma on a short term basis. He proposes to the board of directors to buy an existing facility located in Plainville to serve as the temporary plant until the fourth one is completely constructed.  Ten the board members agreed with the short term recommendation provided by the CEO except one who was not in favor of the proposal. The problem of decision making arises here leading to a lengthy discussion between Mr. William who was the disagreeing board member. The discussion is over the proposal given by the CEO to purchase a temporary plant with the intention of closing its services in three years after the completion of the new facility.  The purchase of the temporary plant was the only practical and beneficial concept that would save the Byte demand problem at the moment.

Explanation of Relevant Concepts, Theories, and Applications

The stop-gap measure to be undertaken by Elliot would cost him less money to renovate at a shorter period and better lease terms because the facility has gone eight years abandonment. He is also aware of the challenges of the proposed plant. These include low profitability, warehousing expenses, high labor cost and poor transport links to the company’s major markets. The other threat to the CEO is the domestic and foreign licensing of the plant which would cause additional cost to the company. Despite all these problems he settles to take over the plant as it was the only alternative to him to bridge the demand.

As he prepares to meet the board of directors, he anticipated oppositions which he indeed received from an outside director known as Kevin Williams. The other ten members accepted the proposal, but the only opposition was the strong voice of William. From the objective perspective, William said that enough products could be supplied by the temporary facility, but the location is far from the market. That may lead to distribution difficulties. The transient nature of the plant will also inconvenience employees as they need to settle permanently with their families and buy houses. In general, William argues that the temporary plant would do the community a disservice. The temporary facility would be ineffective and inefficient in the production of the Bytes commodities. The temporary solution does not meet the priorities of the company as per William. Indeed most of the issues involved in the opening of the temporary facility reveal a lot of conflicting information.

Recommendation

To meet the market demand opening a temporary facility is an ideal answer, but the England location is not realistic. I would recommend that the CEO should, therefore, weigh the problems that the temporary plant is going to cause the company from the location and the benefits of using it. Using logic, since the new plant is to open in three years, then perhaps Eliot should consider another location. Because the new plant being constructed is located at the Southwest, then the temporary plant should be in the same location. This would benefit the company with the good roads, warehousing among other things that reduces the cost of production as the company bridge the gap.

Alternative Recommendations

Alternative recommendation would be to plan the new facility to open in stages to enhance productivity as the construction goes on, ideally, it would help reduce the demand. The second alternative would be to locate the temporary plant near any of the operating byte facilities. Such that, as it closes in the three years’ time then the employees can easily join the satellite plants with no big loses. Byte should also offer housing facilities to the new temporary plant employees to avoid excess expenses. The other alternative is that Byte should be capable of providing job opportunities in Southwest plant to the temporary plant workers who are willing to relocate.

In conclusion, there is a need for the company to solve the product demand gap in the market. A quicker solution is needed to raise the production. The decision making to solve the problem is complex and require an in-depth discussion which can only be sorted by use of Corporate Legality versus Corporate Responsibility approach to solving. The two strategies have been employed through lengthy discussions and arguments between the CEO of the company and other directors. Unfortunately, the directions taken by the Eliot was not worth comprehensively solving the problem. Therefore the two leadership decision making and management approaches should be employed effectively.

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