Week 1: Case 1

The Recalcitrant Director at Byte, Inc. Student M. Sgambelluri Bryant & Stratton College Buss450: Strategic Management Prof. Laukhuf September 10, 2011

Week 1: Case 1

1. If you were one of the board members, how would you have initially voted for the proposal? What would your vote be after the recess in the meeting? Why? If I was one of the board members, I would have voted against the proposal. I vote against it because Construction on a facility that will take three years to complete should not begin when current facilities are working at 100% capacity around the clock, and demand continues to escalate. Also the profitability would be low for more than one reason. There would be high labor costs from strong union presence, warehouse expenses, and also insufficient transportation to Bytes major markets and suppliers. I agree with Kevin Williams 100% in the case of Byte Inc., he proposed that the influx of workers and their families, about 4,000 people, would be effected by this and disrupt the small New England community.

2. Should the Byte executives tell the town administrators and potential employees that this is a temporary plant for three years? The Bytes executives should tell the town administrators and the potential employees that this is a 3-year temporary plant. Byte executives need to tell the town of Plainville because more people will be affected negatively by the consequences of Byte Product leaving Plainville after the 3 years. The community, school, banks and local business will be directly affected. By informing them they will be able to minimize the cost to these individuals as they can start looking for other options before the plant is shut after 3 years.

3. What impact does a plant closing have on a small town like Plainville? What impact does the closing have on the employees? The closing of the Plainville plant is likely to have a negative impact on both, the town housing of the plant and the employees from the town who work in the plant. Because the plant is the primary employer of the people in the town, the closing of the plant will result in high unemployment rates in Plainville and will cause hardships for the employees that are out of jobs and unable to support their families, the laid off workers would try to find jobs outside the town and move out of Plainville along with their families. The relocation of the majority of the worker population would make the town deserted. Scarcity of population will make the survival other businesses difficult and result in them possibly shutting down.

4. Can you suggest any compromise for the present impasse?

Week 1: Case 1

There are a couple of ways Byte can try and fix the situation. One way would be for the executives at Byte to tell the town administrators and the employees that the plant is going to be temporary and try to lure the employees by offering them several alternatives once the plant shuts down. Another way would be for the management to enter into negotiations with the town authorities and the worker unions to overcome the problems that prohibit Byte from setting up a permanent plant at Plainville. A big problem that Byte Faces is its high labor costs. The management can enter into talks with the union and let them know that it will not be possible for the plant to run permanently at current wage rates and see if it can convince them to lower their wages to a point where it becomes possible to operate for a longer term.

5. If you were Elliott, would you call for a vote on your proposal or postpone the vote until next meeting? If I were Elliot, I would postpone the vote until next meeting. Opening a new temporary plant may be a good answer to the lack of capacity, but the New England location is far from an ideal location. Elliot must weigh the problems associated with the new plant against the benefits of increase capacity before he calls for the vote. If and after all forecasts confirm the need for the increased capacity before the new state-of-the-art facility opens in three years, then perhaps Elliott should seek an alternative location.