Letter/ Memo of Transmittal

25th November, 2021

Prof.
Department of Communication
Indian Institute of Management, Indore

Subject: Report Submission on the case “Vikram Rana at Margot Financial Securities”

Dear Madam,
In accordance with the instructions given by you, we have analyzed the case “Vikram Rana at
Margot Financial Securities”. The following pages contain our analysis and possible options
available to resolve the issue. Based on the same, we recommend that the board members
conduct an informal discussion with Ryan and warn him about the legal and reputational
repercussions that may arise from his actions.

In case of any further clarification, we will be happy to discuss it with you, at your convenience.

Yours sincerely,
 Executive Summary

The report analyses the situation at Glamor-a-Go-Go, where the company's visionary CEO, Joe
Ryan's recent appearance with colleague Laura Sanders has the board members concerned about
the possible repercussions of stories about Joe's philandering circulating in the press.
Considering Ryan's competency as a businessman and rumors of his alleged affairs with female
employees threatening the company’s image, the members face a dilemma on how to handle the
situation, evaluating whether to let it unfold naturally, internally investigate into the matter, or
terminate Ryan's employment. The recommended course of action is to conduct an informal
discussion with Ryan warning him about the legal and reputational consequences of his actions.
Situation Analysis:

Glamor-a-Go-Go, a US-based cosmetics-company catering to females in their 20s and teenagers,

with 120-stores and more in the works, they were planning to go global within a year-and-a-half.
Sales and profits had been skyrocketing with their recent ‘girl-power’ line of
private-label-cosmetics. Most of this was achieved under the leadership of the visionary Joe
Ryan, with his business-acumen the company now boasts of terrific-products and
manufacturing-processes. He transformed the workplace, providing ample opportunities to all,
diversified-workforce, provided generous stock-options and giveaways to employees all across
the company. He also extended his support to his employees during difficult times and
maintained cordial-relationships. He was largely popular for his charmingness, approachability
and energy beyond his age.

Yet, there had been complaints about his rather flirtatious-behaviour and alleged philandering.
There were rumours about his infidelities, with his secretary, who later quit, and the fast-tracked
promotion of a mailroom-employee with whom he allegedly had a fling. Recently, the
local-newspapers reported a feature about Ryan leaving with a ‘friend’ who was not his wife,
rather a 25-year-old assistant-manager from the company’s HR-department.

A board-meeting had been scheduled that had Sam Martell - board-chairman and partner at
VC-firm, Mary Lamott - longest-serving-member of the board and daughter of the company
founder, Tim Wheeler, Carol Tomkins in attendance. While Wheeler was worried about the news
damaging morale within the company; Martell stated that it was not to be forgotten that Ryan
brought the company to where it is today. Lamott claimed that it was inconsequential to her and
the employees, what Ryan’s private-life looked like; but Carol believed it was a
pertinent-question about the character of the leader.

Problem Statement:

Joe’s alleged-philandering threatens the face of the company, the message it embodies, and the
image-of-the-leadership and its integrity in the eyes of the employees. The board now faces a
hurdle with this issue as otherwise he has been a visionary-asset, under whom the organisation
reached new-heights. What should the Board of Directors do in light of these circumstances ?

Options:

- Continue with Joe Ryan as the CEO, take no other action and let the situation unfold
naturally.
 - Terminate the employment contract with Joe Ryan as the CEO, in light of the
controversies and distance the organisation from any potential negative implications.
- Initiate an internal HR investigation into Joe Ryan’s behaviour and the alleged
relationships he has had at work; to stay ahead of any potential sexual harassment
charges.
- The board members could sit Ryan down for an informal discussion, warning him about
legal and reputational repercussions that may arise from his actions.

Criteria for Evaluation:

The possible options at hand should be evaluated under the measures of; improvement in
performance, ease of implementation and extent of problem solved. These measures should be
applied in the purview of

- Implications on all stakeholders

- Morale within the company
- Impact on the organisation’s reputation
- General perception of their “girl power” line based campaign
- Aiding in the process of Glamor-a-Go-Go going global
- Achievement of sustainable growth

Evaluation of Options:

Continuing with Joe Ryan as the CEO might attract unnecessary-controversy regarding
sexual-harassment downgrading the reputation of the firm. Lawsuits might also be filed against
him. This will be ironic for the firm, given the “girl-power” based campaign. On the
brighter-side, Ryan has taken Glamor-a-Go-Go to another level in terms of revenues and profits;
under his leadership, the firm has grown from 23 stores to 120 stores. He has been a great-force
in the firm and since the firm is planning-to-go-global, his presence at the CEO position would
be crucial.

Terminating Ryan’s contract will save the firm from controversies and lawsuits, but there is no
concrete-proof behind the allegations. Taking such an extreme-action might upset the
shareholders as Ryan’s personal-life does not concern them. Their focus is the company’s best
interests, and terminating him might put the company’s future in jeopardy.

Running an internal HR-investigation would ensure that the news doesn’t go out in the public.
Ryan and his acquaintances can be questioned about his behavior, especially with
female-colleagues. The interrogation, on the downside, could offend him. Additionally, such an
investigation cannot be initiated without a plaintiff coming forward, or concrete-evidence of
violation of HR-policies. Regardless of the outcome of the investigation, Ryan’s reputation
within the company would take a hit.

Board-members discussing with Ryan about the legal and reputational-repercussions of his
actions on the firm along with a warning to act in alignment of the company’s good interests in
public-platforms (where the media is present), would aid in avoiding any further such issues. A
closed-room-meeting wherein only the board-members and Ryan is present is pretty feasible.
This way, his stature would remain intact because his colleagues and acquaintances won’t be
questioned about him.

Recommendation:

Out of the four alternative courses of action we have identified, we recommend the fourth-option
i.e. board-members could sit down with Joe Ryan for an informal-discussion, warning him about
the legal and reputational repercussions that may arise from his actions.

Action Plan:

Two things are of paramount importance in this discussion:

1. That it will be kept completely confidential from the rest of the organization. This must
not hamper his reputation or respect that he commands from his reports. It is also
necessary to avoid widespread false rumours and panic within the organisation.
2. Joe Ryan does not feel completely alienated or attacked by this so that once the matter is
discussed, Ryan does not harbor ill feelings towards the company or act against its best
interests.

The agenda must be collaborative and not confrontational. Joe Ryan must be made to understand
the risk that his reputation poses to the company and its “Girl power” branding. Once he
understands, the board should try to include him in tackling this solution and ask for his inputs as
to how this clash can be resolved.

Contingency Plan

Problem: The CEO doesn’t take the meeting with the Board members seriously, justifies his
action and does not mend his ways. A possible worst-case scenario is that a sexual harassment
case has been filed against him.

Preparation: Make Joe Ryan sign an agreement during the board meeting with the terms to accept
his termination without claiming any of the benefits entitled to him, if such a particular situation
arises.
Response: Terminate Joe Ryan immediately. Turn the trending news on the topic (although the
company would be shown under bad light) to gain popularity for the company and its vision.
Hold a press conference stating the strong commitment of the company against such
unacceptable activities, ensure that the company would help the victim in every way possible to
get justice and reiterate the motives of the company in women empowerment.