Shifting Fortunes at Acme Engineering Consultancy

It was 9am and Satish, the General Manager of Acme, an Engineering Consultancy had just
walked into his office when he found Pradeep waiting for him. Pradeep was Acme’s ace
designer and was critical to Acme’s success in getting some of the best contracts in the last
few years. After they exchanged some pleasantries, Pradeep said, “Satish, I think my growth
has stagnated at Acme for awhile now and so I have decided to move on. I have an offer from
one of our competitors and they are offering about 50% more than what I make here. But, I
am not happy leaving Acme. I have spent some of my best years here and have some of my
best friends here. So I would not like to leave this company unless I have to.”
Satish was shocked. Two months ago he had heard some rumours about the likelihood of
Pradeep leaving and had directly asked Pradeep if he was considering other offers. At that
time Pradeep had re-assured Satish that he was here to stay. Now, just as Acme was about to
get a crucial order, Pradeep had chosen to drop this bombshell. In order to salvage the
situation, Satish said to Pradeep, “Please give me some time to think this over; Acme cannot
afford to lose you at a time like this, I would surely like to make you a counteroffer. Please
give me time until the end of today.”
After Pradeep left, Satish evaluated his options. He was upset that Pradeep had lied to him
two months ago. This was a crucial time for Acme and without Pradeep they would not be in
a position to fulfil several important contracts. Moreover, knowing that one of their star
employees had shifted to the competition, many customers too would consider moving their
business with Pradeep.
Pradeep was one of the highest paid Chief Designers in Acme. Increasing his salary by 50%
would mean that he would be paid marginally more than Satish. Not only would this be
difficult to convince the top management, it could also lead to dissent amongst Pradeep’s
peers. Another option was to consider Rishi, a Design Executive to fill Pradeep’s shoes. Rishi
had joined the company three years ago and had not completed the mandatory six year period
required to be considered for the role of Chief Designer. But he was smart and promising and
had worked very closely with Pradeep for the last three years.
Satish called Rishi to his office and broached the topic of Pradeep’s resignation. He was
shocked to discover that Rishi had been invited by Pradeep to join him in his new job. In the
new role, Rishi was expecting a raise of at least 30%. Hearing this, Satish immediately made
Rishi an offer. If Pradeep left, Rishi could have independent change of all Pradeep’s projects
as well as a 40% salary raise. Moreover, if things went well, Rishi would be considered for a
Chief Designer’s position the coming year.
For a while, Rishi remained deep in thought. On the one hand, he was happy to receive the
offer, on the other hand, he was wondering whether he could extract something more out of
Satish. Satish could not understand how Rishi did not grab this once-in-a-lifetime offer.
Just then Pradeep walked over to Rishi’s desk and was told by a colleague, that Rishi had
been in a meeting with Satish for the last 45 minutes. Pradeep was quite certain what was
being discussed in this meeting.
1. What do you think about Satish and Pradeep’s strategies? What did they do well?
Where did they falter?
2. What would you do if you were in Rishi’s situation?
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