The Roller Coaster Ride: The resignation of a star

ORGANIZATIONAL POWER AND POLITICS

The Roller Coaster Ride: The resignation of a star Case Summary

Case Background: ‘The Roller Coaster Ride: The Resignation of a Star’ is a Harvard Business School case study that tries to highlight informal source of power and dependence within an organization. Stephen Connor is the head of global technology research at investment bank Rubin, Stern, and Hertz (RSH). One of his star analysts, Peter Thompson, has decided to resign. Stephan is taken aback by this. Peter is one of the most recognized analysts with RSH. He is an integral part of the ongoing PowerChip deal that is quite important for the company. Stephen had had a word with Peter two months earlier when the former heard that Peter was looking for opportunities elsewhere. Peter had assured Stephen then that he had no such intention. Stephen has come to know that the reason for Peter’s resignation is better salary being offered by competitor. Stephen is speculative that Peter will take his entire team with him while exiting the firm. To tackle the situation Stephen comes up with two alternatives: give a counteroffer to Peter or find his replacement. Giving a counteroffer will be synonymous to giving in to blackmailing. Many senior analysts in the industry have recently changed their firms due to which finding a replacement for Peter will be tough. In such a situation, Stephen ponders if there is another way out. Rina Shea is Peter’s junior and has been assisting him since he hired her 3 years ago. On some deliberation, Stephen comes to know that Rina is also leaving with Peter. Stephen offers her promotion to senior analyst role, a chance of enrolling for a prestigious 13-week course, and a considerable salary hike. Each of the three protagonists is considering their options. Stephen is inclined towards offering a promotion and other benefits to Rina as opposed to giving in to Peter’s demands. But he is doubtful about the reactions of investors and other channel partners on Peter’s exit. Rina is quite excited about Stephen’s offer but her loyalty towards Peter is holding her back. Peter is looking for a way to take control of the situation. He wants Stephen to make him a counteroffer.

Suggestions: Rina Shea It is suggested that she should accept Stephen’s offer. Reasons for the same are as follows:   

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It is one of the best opportunities available in the industry for a person with her experience, she will be a senior analyst heading a team of her own If she performs well, she will be responsible for the semiconductor business which is growing fast and is promising She will get an opportunity to be a part of special 13-week course on how to become Institutional Investor- ranked; 66% of the people enrolled for this course had been ranked by Institutional Investor magazine She will get to interact more closely with the higher level managers as she will be promoted; she is handpicked by Stephen which will strengthen their professional relationship going forward Apart for this, Stephen can also act as mentor to her (formally as well as informally) One of the major drivers for her to change job was higher compensation ($200,000) but Stephen is offering her $300,000 which is much higher than what she will get if she joins the other firm

She can still ponder on being loyal to Peter but the offer given by Stephen is too good to reject. By far, she has been under the guidance of Peter. This is an opportunity for her to cultivate political and professional connections. Peter Thompson It is indicative from the case that monetary benefit is the main reason behind Peter’s desire to join another firm. First, he should have discussed the matter openly with Stephen when latter countered Peter two months earlier. But now he has somewhat spoilt his relation with Stephen. If Peter chooses to stay, Stephen is not going to rely on him in future. Their relation in going forth will be very objective. Also, if he stays, Rina will be denied the promotion that Stephen is offering her now. The nature of their relation may not be cordial in future. Rina might view him as a roadblock in her career progression. Stephen Connor Stephen should not make a counter-offer to Peter. He has made an intelligent move by making an offer to Rina. If Stephen budges to the demands of Peter, other analysts will also start try to follow Peter’s line of action. Going forward, the two most important things Stephen should be careful about are:  

Be more focussed and aggressive in developing the in-house talent pool (stellar researchers) As far as the important industries are concerned, do not rely on one analyst for the entire job; always have a backup

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This case reflects on the shift of informal power in an organization; first from Peter to Stephen and then to Rina Sources of Power o Stephen - Energy and endurance, flexibility, sensitivity (read and understood others), willingness to engage in conflict and confrontation, ability to submerge one’s ego o Peter - Energy and endurance, focus (Semiconductor industry) o Rina - Energy and endurance, flexibility, focus (Semiconductor industry) The power residing in you is subjected to not only your sources of power but also the way you exploit these sources to build an atmosphere which makes you the power centre