Assignment #3

-case-
A FIRM PRODUCTION DATE
A FIRM PRODUCTION DATE
Scott Kelly, XYZ’s marketing vice president, was shouting on the telephone to Tom Evers,
director of new-product development in XYZ’s R&D laboratories: “We’re going to kick off a
major ad campaign timed to make people want your new model appliance, just before we
start delivering them to dealers, and I want to be sure your production date is firm and not
one of those best estimates you’ve stuck us with in the past.” Taking a quick breath, he
continued: “You people in R&D don’t have much credibility with marketing! You don’t tell us
what you’re up to until it’s too late for us to advise you or interact in any way. I still
remember the money you spent on that water purifier we didn’t want. And it didn’t help
your credibility when you tried to keep the project alive after we told you to kill it!”
Tom assured Scott that the schedule for starting production was absolutely firm. “We’ve run
extensive tests, including life tests, and everything definitely indicates ‘go’! We’re going to do
a small pilot production run and test those pilot units in employee homes. That’s a purely
routine confirmation, so I can assure you that the production date is locked in. Go ahead with
your ad campaign—we’re giving you a sure winner this time.”
 
But Tom was wrong. A glitch appeared near the end of the pilot test and very close to the
production date. In a hastily called engineering meeting, to which marketing was not invited,
a quick-fix design change was approved. Another short pilot production run would be made,
and the revised units would again be tested in employee homes. A delay of one to two
months, perhaps longer, for start of production was indicated. With this schedule set, Tom
arranged a meeting to apprise marketing of the problem and the new production schedule.
 Scott exploded as soon as Tom began his account of the production delay. “You gave me a
firm production date! We’ve got a major ad campaign under way, and its timing is critical.
We’ll have customers asking for these new models, and the dealers won’t have them. We’ll
look silly to our customers, and our dealers will be upset.”
“Now wait,” Tom interrupted, “I didn’t give you the production date as absolutely firm. I
remember cautioning you that a problem could develop in the pilot run and suggested you
allow for it in kicking off the ad campaign. I told you we’d do our best to make the date but
that there’s always an element of chance with a new machine. We’re better off having
customers asking dealers where the new models are than being out there with a big quality
problem.”
  
QUESTIONS
1- Tom was obviously overconfident in the final stages of the testing process, but was his
behavior unethical? Why or why not?
2-Given Scott’s concerns over R&D’s credibility, should he have taken Tom’s production date
as being absolutely firm?
3-In fact, Scott was so skeptical of Tom’s production date that he recorded their original
conversation without Tom’s knowledge and then produced the recording when Tom denied
giving a firm production date. Tom responded: “You taped my conversation without telling
me! That’s unethical.” Was it?
4-Has Scott’s behavior damaged future relations between marketing and R&D? In what way?
How could this situation have been avoided?