Defection of an Executive in Case Study

Moreover, Coleman is right in suggesting that a better compensation package could be offered in an attempt to retain Carpenter.

How could the crisis have been avoided?

For one, at the time of hiring Carpenter, I would have insisted on the company's in-house developmental data and operations information remaining confidential after Carpenter moves on to another firm. Even if Carpenter had refused to sign a contract that would prevent him from leaving and signing on to another company, the contract could have included a confidential information clause, preventing him from sharing company (trade) secrets with future employers. Steven Emanuel and Lazar Emanuel explain in their book Corporations that any of the following acts can be considered "wrongful taking of trade secrets": a) soliciting a "large number of the former employer's customers"; b) soliciting of the former company's employees; and c) use of the former employer's "secret processes" or other strategies of doing business (Emanuel, 2009).

Prepare to manage the crisis, resolve the crisis, and profit from the crisis.

First of all it seems obvious that the channels of communication in this company are not open as they should be. A thorough review -- top to bottom -- of the mechanism for people in the company to make their voices heard should be conducted at some time in the near future, whether Carpenter is really gone or not. And also, suing Carpenter is not an option. The negative publicity resulting from that confrontation could put KTI on the defensive.

Secondly, if Carpenter is indeed out the door, Simmonds first contact Daltex and set up a meeting to make the point that if Carpenter attempts to steal secrets or employees, there will be litigation -- and potentially a restraining order issued by the appropriate judge. Regarding Carpenter's replacement, Simmonds absolutely must tap into the opinions of the employees -- through HR -- as to their preference for a talent to replace Carpenter.Is it Brady? Why? If there is not sufficient enthusiasm for Brady -- and from the information presented, it doesn't sound like Brady is potentially a top-flight executive -- then a talent search should be conducted for a suitable replacement for Carpenter. The new hire should be asked to sign confidentiality agreements that are worked up by the legal staff of KTI, based on federal labor laws and based also on employee contracts that other corporations are using with success.

Thirdly, as to the press, shareholders vis-a-vis Carpenter's departure, Simmonds needs to present the case that while the company appreciates Carpenter's contribution, and is sorry to see him go, KTI has momentum, great products, and a profitable future in the textile business. It has to be upbeat. Moreover, Simmonds also needs to reassure customers that nothing has changed and the products that KTI offers are the best available, notwithstanding Carpenter's exit.

KTI can end up profiting from Carpenter's exit. How? No doubt there are creative, experienced individuals in the industry that could step in and not only fill Carpenter's shoes but take the company well into the future with innovations and products. Moreover, if Simmonds follows through and designs a more effective company structure (one that allows the free flow of communication and information, top to bottom), success is inevitable. Learning pivotal lessons from the crisis that Carpenter's restlessness created is imperative for KTI. The pressure is on Simmonds now to follow through and lead a revitalized company with renewed dedication to excellence.

Works Cited

Ellig, Bruce R. (2007). The Compete Guide to Executive Compensation. New York: McGraw-

Hill Professional.

Emanuel, Steven, and Emanuel, Lazar. (2009). Corporations. Aspen, CO: Aspen Publishers

Online.

Sharma, Anurag, and Kesner, Idalene F. (2000). When an Executive Defects, in Harvard

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