Question
Revolutionary Electronic Technologies (RET) recently released a new advanced electronic micro system to be used by financial institutions, large corporations, and governments to process and
Revolutionary Electronic Technologies (RET) recently released a new advanced electronic micro system to be used by financial institutions, large corporations, and governments to process and store financial data, such as taxes and automatic payroll payments. Even though RET developed the technology used in the creation of the product, RETs competitors are expected to possess similar technology soon. To beat the competition to the market, RET introduced its new micro system a little earlier than originally planned. In fact, laboratory testing had not been fully completed before the product reached the market. The tests are complete now, and the final results suggest the micro system might be flawed with respect to how some data are retrieved and processed. The tests are not conclusive, though, and even if additional testing proves that a flaw does exist, according to RET, it is of minuscule importance because the problem seems to occur for only one out of 100 million retrieval and processing attempts. The financial ramifications associated with the flaw are unknown at this time. Assume that you are one of RETs senior executives whose annual salary is based on the performance of the firms common stock. You realize that if RET recalls the affected micro system, the stock price will suffer; thus, your salary for the year will be less than you expected. To complicate matters, you just purchased an expensive house based on your salary expectations for the next few yearsexpectations that will not be realized unless the new micro system is a success for RET.
As one of the senior executives, you will help determine what course of action RET will follow with respect to the micro system. What should you do? Should you encourage RET to recall the micro system until further testing is completed? What other courses of action do you suggest
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