Case 5 The Demanding Customer
Setting: Semi-Conductor Manufacturing; Your Position: CEO
You are CEO of a company that produces systems for the semi-conductor industry. The company has existed for ten years. Its major product, which is protected by three patents, has been on the market for eight years and has a reputation for being the best system available. The company sells its product to end-users and to OEMs (original equipment manufacturers).
The company employs a hundred people, and the managing body consists of yourself and four vice presidents. The vice presidents are engineers who have vast technical knowledge and have been with the company since the start. Management works as a team and consults with one another frequently. Most decisions are made as a result of discussions among the managing body. However, there are some decisions that you believe should be made by the CEO alone. This group is highly committed to the company's goals and values. You believe that you have earned their respect, and they have supported all of your decisions up until now.
For some time you have been concerned about the vulnerability of a single-product company such as yours in a volatile industry. Recently, the leading semi-conductor company, a principal customer, has expressed interest in signing a long-term contract. This contract has now been in negotiation for the last three months. Your product is an essential part of their system, and by signing this contract not only will your company be the sole supplier but you will also be able to provide them with replacement parts long into the future.
The contract is very important to the company. However, on the day before the contract was to be signed, the customer came up with a new demand. They want you to disclose and provide the plans and blueprints for the manufacturing of the product in order to guarantee their supply in the event you were unable to meet their needs. They explained that they do not want to steal the product but merely want to secure their supply chain.
You feel that you know the customer very well and can appreciate the rationale for their request. Your background in law also gives you an understanding of the legal implications of existing patents.