Business Strategies

Cohort 9

Case1: THE RECALCITRANT DIRECTOR AT BYTE

PRODUCTS

Prepared & Presented by:Ahmed Ezz

Fadya Ahmed
Nadia Barakat
Said Ezz

Under supervision o
Dr Manal El Kordy

The Case Summary

Byte Products, Inc is a USA manufacturer of electronic components
that are used in PCs; it is the industry leader with 32% market share
and its revenue increase in annual basis by 12%.
They are facing a problem that they cannot meet the increased
demand of these special components as the production capacity in
their three manufacturing plants is fully utilized, which will result in
shifting the demands to other competitors and encourage others to
enter the market.
Byte products has already planned for the construction of a fourth
plant in southwestern united states but an estimated three years will
be required to complete the plant, but Byte management believes that
it need short term solution or otherwise they will lose their market
share.

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Executive MBA - Cohort 9

The Case Summary Continued

Some solution Suggested:1. Licensing Bytes product and process technology to other
manufacturers
Constraints:No manufacturer will bear high fixed cost of manufacturing the
components for only short period of time and they would ask for a
premium to recover their cost which will make the products available to
the Overseas
end customer
at an acceptable price
2.
facilities
Constraints:Board was uncomfortable in making their technology available for other
to produce Byte products as they would not be able to control patents.
3. There is abandoned plant that was used primarily in the production
of electronic components in Plainville which can be used to produce
Bytes products in three months, the plant can be available at a very
attractive price and can be easily leased immediately from its
present owner.
The plant can work as temporarily solution only as it will never be
efficient and profitability will be low plus that the location is poor where
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3
the
labor cost is high, Executive
warehousing
and inadequate

The Case Summary Continued

The CEO Jim Eliott has brought this proposal to the board for review; all
boards members except T. Kevin Williams were in favor of that
proposal
Williams has objected in that proposal because as Byte products intent
to close the plant in three years which will employ around 1200
employees which is along with their families are 4000 people
If they informed the community on their plan of closing the plant, they
wont fund the projects of the schools, instructors, utilities, and
housing, restaurants and so on needed for the employees and their
family, and the proposal wont work.
And if they didnt inform the community of their plan, the tax base of
the community will be destroyed, property value will decrease and the
whole town will be unemployed
which will constitute gross
irresponsibility

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Executive MBA - Cohort 9

As a board member I would voted no initially and after the recess in the meeting

Question One
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?
As a board member I would voted no initially and after the recess in
the meeting
Why
Being a board member I have a legal duty to represent the
shareholders and protect their interest, so I have an obligation to
approve all the decision that affect the long term performance of the
cooperation and approving that proposal yes would not jeopardizes
the company to any legal issue but it would tarnish Byte Products
image and will create negative attitude toward it which will eventually
impact its sales in the future in case they didnt inform the community
of
their
plandidnt
of closing
thethe
plant
in three years.
And
if they
inform
community,
the proposal wont work as
there will be no worker that would be attracted to work for them
without the required necessary infrastructure for them and for their
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Executive MBA - Cohort 9
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family.

Question Two
Should the Executives tell the town administrators and potential
employees that this is a temporary plant for three years?

Ethically the executives should tell the town administrators their plan of
closing the plant in three years as long as it is already decided from
now, otherwise Byte Products will be responsible for the negative
impact on the community and the people living there.
So Executive should not hide such important relevant information.

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Executive MBA - Cohort 9

Question Three
What impact does a plant closing have on s small town like
Plainville? What impact does the closing have on the employees?
The community administrators would fund many required projects for
the infrastructure needed for the 1200 employees that would work for
the company and their family, the administrator would finance and fund
such project from the taxes that they would get in return as a result of
having that plant in Plainville, and the closure of the plant would destroy
the tax base of the town and may lead to its bankruptcy.
For the employees, it will leave 1200 people unemployed without the
required fund for financing their housing loans and their expenditure
and they will have to move again out of the town searching for a new
job for managing their family cost of living.

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Executive MBA - Cohort 9

Question Four
Can you suggest any compromise for the present impasse?

From a transformative leadership perspective Byte can introduce a new

product line after three years using the same infrastructure of the plant
with minor modifications.
OR

Byte has to fully disclose the temporary operation of the plant offering
extraordinary severance package that will be fully covered by
shareholders in order not to affect the pricing of the products.

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Executive MBA - Cohort 9

Question Five
If you were Elliott, would you call for a vote on your proposal or
postpone the vote until next meeting?

I think Elliott should postpone the vote until next meeting and
meanwhile he must meet with Williams to reassess the situation and
reach a compromise.

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Executive MBA - Cohort 9

Business Strategies
Cohort 9

Case3: EVERY ONE DOES IT

Prepared & Presented by:Ahmed Ezz

Fadya Ahmed
Nadia Barakat
Said Ezz

Under supervision o
Dr Manal El Kordy

The Case Summary

ISI had been building a satellite to image the world at a resolution of
one meter.
The ISI team had been preparing a proposal for a Japanese
government contractor. The contract called for a commitment of a
minimum imagery purchase of $10 million per year for five years. In a
recent executive staff meeting it became clear that the ISI satellite
camera subcontractor was having trouble with the development of a
thermal stabilizer for the instrument. It appeared that the development
delay would be at least one year and possibly 18 months.
Fred told Jim to use the published date because that was still the
official launch date.
When Jim protested that the use of an incorrect date was clearly
unethical, Fred said, Look Jim, no satellite has ever been launched on
time. Everyone, including our competitors, publishes very aggressive
launch dates.
If we provided realistic dates, our launch dates would be so much
later than those published by our competitors that we would never be
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Executive MBA - Cohort 9
able
to sell any advanced contracts
, just use the published date and 11

The Case Summary

the principal user would be the Japanese government, for political
reasons the government had made it clear that they would be
purchasing data through a local Japanese company. One Japanese
company, Higashi Trading Company (HTC), had provided most of the
imagery for civilian and military use to the Japanese government.
Jim was concerned that if a new launch date was announced, HTC
would delay signing a contract.
Jim was worried that even if only a 12-month delay in launch
occurred, trust would be broken between ISI and the Japanese.
Fred feared that if HTC became aware of the delay, they would begin
negotiating with one of ISIs competitors, who in Freds opinion were
not likely to meet their launch dates either.
Jim knew that with the presentation date rapidly approaching, it was
time
to make a decision.
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As a board member I would voted no initially and after the recess in the meeting

Question One
1. What are sources of the factors, which created the ethical dilemma?
Internal factors:

Uncertainty of the development of the thermal stabilizer of

the camera while having to fix a date in the contract with HTC.

direct instruction

Jim is under pressure as he got

from his
boss Fred to use the published date although he knows that it cannot
be met.
Jim was equally concerned that if HTC learned that Jim and his team

camera design problems.

knew of the
External factors:
Any

delay

in

delivery

date

may

allow

other

strong

competitors
announcement
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of

to take the deal. Knowingly withheld

a new launch date until after completing

reputation but that of ISI

Executive MBA - Cohort 9

negotiations, not only his personal

13

As a board member I would voted no initially and after the recess in the meeting

Question Two
Is it ever appropriate to withhold negative information from the client?

If the negative internal information will not affect our

commitment with client it could be
withheld.

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As a board member I would voted no initially and after the recess in the meeting

Question Three
What should ISI do?

Disclosing the fact that there will be a delay time and

proposing other possible time duration while
focusing on subcontractors problems. While promising to
enhance another controllable element of the offering.

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As a board member I would voted no initially and after the recess in the meeting

Question Four
What is meant by the term, industry practice? Is this an example of
moral relativism?

publicize optimistic completion

dates that are rarely met.
Industry practice is to

social group relativism as

it is based on the belief that everyone is doing
it.
Yes, it is an example of

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As a board member I would voted no initially and after the recess in the meeting

Question Five
In what level of moral development is Jim Willis? His boss, Fred Ballard?
Jim principled level this level is characterized by persons
adherence to an internal moral code. An individual at this level
looks beyond norms or laws to find universal values or principles.
Fred the conventional level this level is characterized by
considerations of societys laws and norms. Actions are justified
by an external code of conduct.

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As a board member I would voted no initially and after the recess in the meeting

Question Six
Would a code of ethics have prevented/resolved this ethical dilemma?
What should be in a code of ethics? What if ISI had a Code of Ethics
which stated that proprietary information could not be disclosed to
anyone outside the company and allowed no exceptions?
In general yes, unless the use of code of ethics itself is unethical
like putting pressure on whistleblowers. The code of ethics is the
set of behavioral rules employees should follow to ensure the
company's values are reflected in all business dealings.
Regardless of the size of the business, clearly defined codes and
closely monitored transactions should keep your company from
violating laws and make it a place where employees feel
comfortable doing the right thing. Open door policies for reporting
ethics violations can be included in the code, along with a process
to anonymously report any code of ethics issues. Also it should
stress on personal responsibility for every employee concerning
its fulfilment. If ISI had a Code of Ethics which stated that
proprietary information could not be disclosed to anyone outside
the company and allowed
no
this is good if the18
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Executive
MBAexceptions
- Cohort 9

As a board member I would voted no initially and after the recess in the meeting

Question Seven
What would the utilitarian approach to ethical behavior say about full
disclosure vs. withholding? Individual rights approach? Justice approach?
Kants categorical imperatives?
The utilitarian approach proposes that actions and plans should
be judged by their consequences. People should therefore behave
in a way that will produce the greatest benefit to society and
produce the least harm or the lowest cost. A problem with this
approach is the difficulty in recognizing all the benefits and the
costs of any particular decision. If the full disclosure will not
produce the greatest benefit for stakeholders than withholding is
better. The individual rights approach proposes that human
beings have certain fundamental rights that should be respected
in all decisions. A particular decision or behavior should be
avoided if it interferes with the rights of others. And in this case it
depends on the fundamental rights. If the fundamental rights
protects more the right of the company then Fred may not
disclose the full information as he believes its a right to his
company. An action or policy
is MBA
morally
only if those persons19
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- Cohortright
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affected by the decision are not used merely as instruments for

As a board member I would voted no initially and after the recess in the meeting

Question Seven - Continued

The justice approach proposes that decision makers be
equitable, fair, and impartial in the distribution of costs and
benefits to individuals and groups. It follows the principles of
distributive justice and fairness. So full disclosure is a must. Kant
presents two principles (called categorical imperatives) to
guide our actions:
1. A persons action is ethical only if that person is willing for that
same action to be taken by everyone who is in a similar situation.
2. A person should never treat another human being simply as a
means but always as an end.
This means that an action is morally wrong for a person if that
person uses others merely as means for advancing his or her own
interests. To be moral, the act should not restrict other peoples
actions so that they are disadvantaged in some way.
It is an unconditional moral obligation which is binding in all
circumstances and is not dependent on a persons inclination or
purpose. So full disclose is a must.
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Greentec - Mission Statement

Score
9/10
We are promoting positive peace between people and their
waste using latest material recovery technologies by creating
the conditions that eliminate all causes of conflicts including
direct, cultural, and structural causes.
Score of less than 10 suggests that more work needs to be done.
1. Does the statement describe an inspiring purpose that
avoids playing to the selfish interests of the stakeholders? Yes,
positive peace and material recovery.
2. Does the statement describe the companys responsibility
to its stakeholders? Yes, people including all stakeholders.
3. Does the statement define a business domain and explain
why it is attractive? Yes, the business domain is waste management
and it is attractive as it is proposing a different approach to the waste
industry.
4. Does the statement describe the strategic positioning that
the company prefers in a way that helps to identify the sort of
competitive advantage it will look for? Yes, the Competitive
advantage is using latest material recovery technologies.
5. Does the statement Executive
identify
1/19/17
MBAvalues
- Cohort 9 that link with the
21
organizations purpose and act as beliefs with which

Greentec - Mission Statement

Score
9/10
We are promoting positive peace between people and their
waste using latest material recovery technologies by creating
the conditions that eliminate all causes of conflicts including
direct, cultural, and structural causes.
6. Do the values resonate with and reinforce the organizations
strategy? Yes, as one of our strategy is stressing on CSR, and cultural
conflicts.
7. Does the statement describe important behavior standards
that serve as beacons of the strategy and the values? Yes, it
describe important behavior standard as we are treating waste as
valuable material and eliminating all causes of conflicts.
8. Are the behavior standards described in a way that enables
individual employees to judge whether they are behaving
correctly? Yes, because employees are part of all people mentioned
in the mission statement.
9. Does the statement give a portrait of the company,
capturing the culture of the organization? Yes, culture of peace.
10. Is the statement easy to read?

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Business Strategies
Cohort 9

Case2: THE WALLACE GROUP

Prepared & Presented by:Ahmed Ezz

Fadya Ahmed
Nadia Barakat
Said Ezz

Under supervision o
Dr Manal El Kordy

The Case Summary

Wallace Group is a company dealing with the manufacture and the
development of technical products and systems, they consist of three
operational groups include: electronic, Chemicals & Plastic , and it
generate 70Million USD sales in the three businesses, Hall Wallace is
the president and the Chairman of the Wallace Group
Wallace was the owner of the original electronic Company, then he
decided to undertake a program of diversification and has planned for
the acquisition of the plastic company but his debt structure didnt help
him much, so he had to attract equity capital, he gathered a small
group of investors and formed a closed corporation
Later he planned also for the acquisition of the chemical company
that was on the verge of bankruptcy, the acquisition required public
stock offering, So Wallace now holds 45% of the Wallace group and
Jerome Luskics 5 %.
Wallace Group is currently involved in two Major projects, The Navy-A
Program calls for the development of a display system for a tactical
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fighter
plane and Air Force-BExecutive
is another
such system for an observation

The Case Summary - Continued

Wallace has asked Frances Ramper the president of Ramper
Associate to conduct a series of interviews with some key Wallace
Group employees, in preparation for a possible consulting assignment
for Rampar Associates.
Wallace think that they are okay business wise as their profit before
tax has increased over the past year, and they declared dividend for
the fifth consecutive year , but the engineers are high-strung ,
temperamental and always complaining.
In the last stockholders meeting , one of the manager has introduced
a resolution calling for the resignation of the president which is him, of
course because Wallace own 45% of the stock , he understand that it
cant be a serious attempt for getting rid of him but it was a way to
show him how upset they are with the way things are going on.

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The Case Summary Continued

Ramper has interviewed Campbell the Vice President for Industrial
relationship who was unhappy with the way Wallace is running the
group and he has highlighted the following problems: They need management development program as they were forced
to promote technical people to managerial positions who have no prior
managerial skills, but Wallace has rejected as it is too expensive.
Union pay scales are already pushing up against their foreman
salary levels, and foremen are being paid high in their salary ranges.
This problem, coupled with union insistence on a no-layoff clause while
they have production equipment in order that will eliminate 20% of the
assembly positions .

They need to reconsider if any of the position entrance

requirements, are excessive to avoid any sue case against them.

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The Case Summary Continued

Ramper has also interviewed Matthew Smith Director of Advanced
systems, who has highlighted the following problem: There is a need to integrate their marketing planning efforts
between group and Corporate as marketing strategies are not in line
with the corporate one, so he is busy with the reports and information
required for the Corporate.
Ramper has also interviewed Ralph Kane Director of Engineering, who
has highlighted the following problem: Cannot get qualified candidate hired as offered salaries are too low.
Chemicals programs are borrowing some of their engineers leaving
them with insufficient staff for solving the Engineering problems that
they are facing.
The Director of the Advanced system is retiring in six months, so
they are busy now in recruiting successor, so the department cannot
help him in meeting his needs.
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The head of Industrial relationships is busy with the union

The Case Summary Continued

Ramper has also interviewed Brad Lowell Program manager - Navy A,
who has highlighted the following problem: He cannot get the support he needs from the engineering
department as they give more attention to the Wrights program and
they dont have enough people for supporting him
Ramper has also interviewed Phil Jones Director of Administrative &
Planning, who has highlighted the following problem: Company is not giving attention to good opportunities arises like
the tender of the countermeasure system.
The MIS department is developing a new system that is so
complicated and he feels it doesnt serve what they need.

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The Case Summary Continued

Ramper has also interviewed Burt Williams Director of Operations, who
has highlighted the following problem: Transfer pricing, as they are forced to purchase materials from their
chemicals & Plastic companies at higher prices.
They need to expand in none defense areas and develop both end
user products and components.
They need marketing / sales functions to help them in their business
expansion.

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As a board member I would voted no initially and after the recess in the meeting

Question One
Prepare an internal environment analysis and External environment
analysis.
Internal Environment Analysis (Strengths)

Applying a vertical integration model

Diverse technical competence
Diversification in products
Guaranteed sales to military

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As a board member I would voted no initially and after the recess in the meeting

Question One
Prepare an internal environment analysis and External environment
analysis.
Internal Environment Analysis (weaknesses)
No objectives alignment between units and corporate
No marketing function at the group level to develop a strategy,
define markets, and research and develop product
opportunities.
Boundaries between the roles of corporate stuff and BU staff
are not well defined
No real synergy between different units can be seen in
consolidated balance sheet
Revenues still mainly depend on contracts with Governmental
institutions
R&D is lacking of funds and corporate support
Poor Morale
The president runs the place like a one man operation, when
its grown too big
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Wallace listened to his people for the first time when they

As a board member I would voted no initially and after the recess in the meeting

Question One
Prepare an internal environment analysis and External environment
analysis.
External Environment Analysis (Opportunities)
The chance of creating more vertical integration synergies
Promising markets of electronics and plastics
Diversification to other markets or business

External Environment Analysis (Threats)

Reputation damage due to slow respone to bid requests
Failure to deliver on current project
Bad financial performance, especially in chemicals
The corporate is suffering from a kind of market myopia due to
the Lack of R&D, which may get them out of competition
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As a board member I would voted no initially and after the recess in the meeting

Question Two
What are the most important problems facing The Wallace Group? What
is the most important one?
Most important problems facing them:
Not listening to his people caused a call for his resignation, or a palace revolt, which
indicates a very bad communication between top management and other levels,
and between business units and group board .
Relying mainly on Military contracts and not taking diversification seriously may lead
to future financial troubles.
The Chemical business unit is not working efficiently and depends on sister
companies. Wallace Group is holding back Electronics because they are
"encouraged" to buy from Chemicals and Plastics, which have high prices due to
manufacturing problems.
No alignment between corporate strategy demands and those strategy plans met for
the groups themselves.
Fast growth lead incompetent members to be in management positions without
working on providing training and support to fill the skill & knowledge gaps.
The biggest one is:
1/19/17
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33
The
most important problem is in
the management
it is authoritarian and not suitable the group now.

As a board member I would voted no initially and after the recess in the meeting

Question Three
Develop a specific action plan to deal with these problems.
Introduce group wide specific KPIs and establish an efficient internal control
department
Define group wide new values to promote loyalty and shared morals.
Develop new organization chart and clearly define job responsibilities.
Establish a mission statement, goals and objectives with input put from the
VPs and Directors.
Change management of chemical division or sell off based on cost/benefit
analysis to corporation.
Conduct meetings at each level to get feedback regarding the concerns of
the employees, their ideas, strengths and weaknesses and any other
issues. This should begin with the VPs, then the Directors, and so forth for
each department.
Encourage a continuous flow for the exchange of information.
Involve
stage
the evaluation
project.
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As a board member I would voted no initially and after the recess in the meeting

Question Four
How do you handle the transfer pricing problems involved in the
backward integration?
The acquisition of the plastic company has locked the Electronics
Group into using its plastic products at a higher cost.
Separate between the three entities and treat each as a separate
financial cost center.
Set a clear pricing policy per each product.
Perform a cost benefit analysis for the Plastic Company upon
which the decision will be taken to improve the process, sell the
facility.

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As a board member I would voted no initially and after the recess in the meeting

Question Five
If Mr. Wallace is found to be one of the major problems, should he be
addressed directly or indirectly?
He must be approached directly clarifying the need of separation
between owner ship and management.
The required organizational change should adders his value in
setting strategies along with the managing directors team.

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As a board member I would voted no initially and after the recess in the meeting

Question Six
Has the Wallace Groups diversification strategy been effective? If yes,
please explain. If no, please explain.
No it was not effective as both Chemicals and plastics were
depending on selling the majority of their production to the electrical
division on prices that are higher than the electrical division.
Allocation of more resources to electrical division and purchasing the
required material at the most low cost level would improve the
profitability of the group.

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