Case Solution

In: Business and Management

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Discussion Questions
1. What do you suspect would have happened to the MEMS business and to Mr.
Payne had he negotiated an agreement with ADI that allowed him to start a separate, venture-financed company to commercialize MEMS devices in the late 80s? he would have realized his goal of heading his own business venture. Whether or not the MEMS devices become a success story, however, is a different question altogether.
The early development of MEMS devices benefited greatly from being a part of ADI, from having the positive ADI culture, skilled workforce, manufacturing expertise, and not to mention the financial and top management support. It is unlikely that Mr. Payne would have gotten the first three factors in a brand new start up company. On the financial and management side of operation, Mr. Payne would be hard pressed to garner sufficient support to tide him through the many years of negative profits and is likely to have his attention divided between having had to defend the venture and to improve profitability at the same time. It is a point to note that during these early years, even ADI management did not really trust the potential of the MEMS devices enough to create a separate division. In fact, the early development was assigned a spare capacity of an already existing facility owned by ADI. The inclusion of the MEMS product line in a division of a core product had helped keep the program going through years of not producing profit as the losses were buried within the profit made by the division as a whole.
Had Mr. Payne gotten his own company to develop the MEMS devices, the losses would have been very glaring. The venture might have been written off as too large a loss, and the company closed down long before MEMS reached profitability. The investment might…...

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