Case
Teaching Notes
Supplementary Resources
Abstract
The case centres on a fictional company named Big Electronics Company International (BECI), which set up a manufacturing facility in Penang, Singapore in order to enjoy low labour cost and favourable tax treatment. However, during the recession of 2013, the CEO of BECI ordered a pay freeze in order to reduce labour costs during tough financial times. The manager of the Penang facility, Sam, is under pressure to continue hiring in Malaysia to ensure that BECI reap the financial benefits of doing business in Malaysia. Sam must decide if he should disguise the number of employees in Penang in order to hire more workers without letting the CEO know.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Figure 1: Big Electronics Company International Penang Management Team
CEO and Chairman of the Board, BECI Corporate Headquarters, Dallas, TX
Max – Vice President and Operations Manager, Two-Way Radio division in Miami, FL; reports to the CEO in Dallas, TX
Dave – General Manager, Two-Way Radio Production Facility in Penang, Malaysia; reports to Max in Miami, FL
Sam – Controller, Two-Way Radio Production Facility in Penang, Malaysia; reports to Dave in Penang, Malaysia
Glenn – Engineering Manager, Two-Way Radio Production Facility in Penang, Malaysia; reports to Dave in Penang, Malaysia
Figure 2: BECI Partial Organization Chart
The first text box reads as “BECI HQ, CEO & Chairman of the Board, Dallas, TX.” It segregates into four segments as follows:
| Semiconductor division, Phoenix, AZ | Two-Way Radio division, Vice President and Operations Manager, Miami, FL, Max | Automotive division, Detroit, MI | Consumer Products division, Chicago, IL |
The “Two-Way Radio division, Vice President and Operations Manager” further divides into four segments as follows:
| Production Operation, Penang, Malaysia, General Manager, Dave |
The “Production Operation, Penang, Malaysia, General Manager, Dave” connects to a text box which reads as “Production Operation, Penang, Malaysia, Controller, Sam.”
Figure 3: Timeline
| January 2011 | Sam is hired by BECI to be a supervisor of financial analysis within the Two-Way Radio division. |
| October 2012 | Dave is appointed general manager and Glenn is appointed mechanical engineer for the future Penang Production Operation. |
| January 2013 | Sam is appointed controller of Penang Production Operation. |
| March 2013 | Sam, Dave, Glenn, and families move and start up Penang Operation. |
| May 2013 | Penang Operation begins shipping small quantities of hybrid circuits (components) to Miami, FL. |
| September 2013 | BECI announces a global hiring freeze as thousands of employees are laid off. |
| October 2013 | Max requests Sam to report headcount based on Malaysian payroll divided by U.S. average salary, not actual headcount. |
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
