Reference no: EM133172259

Question - Revolutionary Electronic Technologies (RET) recently launched 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. Although RET developed the technology used in creating the product, RET's competitors are expected to possess similar technology soon. To beat the competition in the market, RET introduced its new micro system a little earlier than originally planned. In fact, the laboratory tests had not been fully completed before the product hit the market. The tests are now complete, and the final results suggest that the micro system could be flawed with respect to how some data is retrieved and processed. Nevertheless, the tests are inconclusive, and even if further testing shows that a flaw exists, according to RET, it is of minuscule importance because the problem appears to occur in only one in 100 million retrieval and processing attempts. The financial ramifications associated with the defect are unknown at this time.

Suppose you are one of RET's top executives whose annual salary is based on the performance of the company's common stock. He realizes that if RET remembers the affected microsystem, the share price will suffer; therefore, your salary for the year will be less than you expected. To complicate matters, he has just bought an expensive house based on his salary expectations for the next few years, expectations 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 take with respect to the microsystem. What should you do? Should I encourage RET to take back the micro system until testing is complete? What other courses of action do you suggest?