Project 5: Managing a Global Business

Dualplex360.pdf

Dualplex 360

Notice: Contains confidential information.

Colossal Corporation maintains a subsidiary in Serafini, a small country in Eastern Europe.

This subsidiary is incorporated in the state of Delaware as New Brand Design, Inc. (NBD),

a company that designs, brands, and manufactures innovative electronic products, and

markets and distributes them for resale across the globe. NBD has been admitted to

conduct business in Serafini.

NBD has been manufacturing and distributing a laptop computer with 360-degree

technology. The thin tablet can easily convert into a laptop by flipping the screen over and

locking it in place against the back of the keyboard. The laptop, marketed under the name

Dualplex 360 is very popular and is distributed primarily in Western Europe, North

America, and South Africa.

The Dualplex 360 went on the market six months ago, and the product is selling out in the

United States and Europe. Unfortunately, consumers have reported that some laptops

that were shipped to the United States have overheated and ignited when they have

remained plugged into a power source for too long. In a few cases, the laptops have

burned users and damaged property.

NBD’s research and development team was fully aware of the overheating problem when

putting the Dualplex 360 on the market but performed a cost-benefit analysis and

determined that the payouts from lawsuits would be less than the cost of redesigning and

manufacturing a new laptop. The research and development team covered up the defect

but included the following disclaimer in the instruction manual:

Course Resource

DO NOT LEAVE THE DUALPLEX 360 PLUGGED IN TO A POWER SOURCE AFTER

THE BATTERY IS FULLY CHARGED. SELLER EXPLICITLY DISCLAIMS ALL

WARRANTIES. SELLER MAKES NO WARRANTY OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR USE. NOR IS THERE ANY OTHER EXPRESS OR

IMPLIED WARRANTY.

The instruction manual contained no other warnings regarding the possibility of

overheating or danger. To date, all instances of overheating have resulted from consumers

ignoring the warning and leaving their computers plugged in after the battery is fully

charged, although some claim they never read the instruction manual so did not see the

warning.

The executive board of NBD has reached out to the CEO of Colossal to discuss these

issues and the potential that NBD will be held liable for the overheating laptops and

resulting injuries and damage to property. The CEO informed the board that the

company’s international task force will research and address these concerns.

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