Gerald Weiss left Wall Street for the promise of a CFO position at a well-established corporation. He was given a 10-year options package with a guaranteed floor of $12 million and unlimited upside. To ensure the entire package would be worth at least $12 million after 10 years, Gerald negotiated a special provision, which gave him the ability to "gross-up" his options twice over those ten years. If the stock price fell substantially, Gerald would be awarded more options (at-the-money) to bring the entire Black-Scholes value of his package back up to $12 million. Because of the company's culture of informality, the deal was agreed to with a handshake from the CEO, witnessed by the current CFO and the VP of human resources, but not written down. When the stock price actually fell, and Gerald asked to revalue his options package, the company reneged on the deal. Teaching Objective: To generate discussion about the benefits and pitfalls of mega-option grants, the issue of revaluing options, and the conflict between adhering to company culture and protecting the financial interests of the employee.
This case revolves around Verisk Analytics' initiatives to drive innovation throughout the firm's many business verticals. Verisk, originally named ISO, started life as an insurance rating agency in the early 1970s, acting as an intermediary between insurance companies and state governments. Over time, the firm transformed from being a non-profit to a for-profit entity, while expanding its lines of business to realms other than insurance. By both exploring the history of the insurance industry and Verisk's unique position within it, the case provides readers with an understanding of the firm's growth strategy and why innovation is so crucial for its success. The case leaves readers to ponder Verisk's innovation and growth strategy, challenging them to assess its strengths and weaknesses.
When Hewlett-Packard Enterprise notified Rhode Island's Governor's Office that it won't be able to deliver a "fully-functioning" technology upgrade for the Department of Motor Vehicles, both parties had reached a breaking point. HPE argued that it would need more money to complete the system, while the Governor's cabinet countered by stating that HPE was violating its contractual obligations. The case covers Rhode Island's perspective of the various moves each side made in preparation for anticipated adjudication.
Pravost Consulting Services considers a division manager's response to the stringent demands of his boss who lambasts him for the division's weak performance. Six months earlier Jakub Kowalski, CEO of Pravost, promoted Viktor Novak to head up the faltering Pravost Consulting Services (PCS). For the most recent two quarters, however, PCS proved to be unfertile ground for Novak who failed to reach Kowalski's (or his own) goals for the division. Kowalski who has a reputation for being a very demanding CEO, often reciting quotes by historical military leaders, drew a sharp line in the sand for Novak: either shape up or else. With heavy rates of attrition in PCS, Novak considers what to do and whether to focus on a long-term solution in which he believes or a short-term fix to placate his boss.
A 2-party negotiation role play between a search engine startup, YOUReka, and Quantron, a supplier of the subassembly boards used at YOUReka's data centers. At issue is a possible breach of contract. Roles include Role for Quantron (#916035) and Role for YOUReka (#916036).
A 2-party negotiation role play between a search engine startup, YOUReka, and Quantron, a supplier of the subassembly boards used at YOUReka's data centers. At issue is a possible breach of contract. Roles include Role for Quantron (#916035) and Role for YOUReka (#916036).
This note reviews some of the relevant research and offers advice for managing and dealing with emotions in the negotiation context. In particular, negotiators should strive to understand their own emotions and feelings and be aware of the emotions the other party may be expressing. By learning to recognize and manage emotions, one is likely to improve many facets of the negotiation and obtain better outcomes for oneself and others.
How do you reduce headcount when almost everyone gets the same scores on performance reviews? HR vice president Nils Ekdahl confronts that question at Circale Corporation, a fictional electronic-components distributor that has just completed a series of acquisitions. Ekdahl wants to make the personnel cuts objectively, but the company's new performance-review system yields disappointing results: On a five-point scale, virtually every employee gets a 4 or 5 on each dimension. So Ekdahl instructs managers to redo the evaluations, tells them they're not allowed to give just 4s and 5s, and requires an average score of 3 across each manager's direct reports. This time the scores indeed average 3, but they are nearly all 3s. Grade compression at the top of the scale has merely shifted to the middle. Should Ekdahl initiate yet another round of performance reviews or make do with the data he has? The authors of this fictionalized case are Brian J. Hall and Andrew Wasynczuk, both of Harvard Business School. Expert commentary comes from John Berisford, currently of The McGraw-Hill Companies and formerly of Pepsi Beverages, and from Stephen P. Kaufman, currently of Harvard Business School and formerly of Arrow Electronics (the company whose performance-review system was the seed for this case). HBR's readers also weigh in.
How do you reduce headcount when almost everyone gets the same scores on performance reviews? HR vice president Nils Ekdahl confronts that question at Circale Corporation, a fictional electronic-components distributor that has just completed a series of acquisitions. Ekdahl wants to make the personnel cuts objectively, but the company's new performance-review system yields disappointing results: On a five-point scale, virtually every employee gets a 4 or 5 on each dimension. So Ekdahl instructs managers to redo the evaluations, tells them they're not allowed to give just 4s and 5s, and requires an average score of 3 across each manager's direct reports. This time the scores indeed average 3, but they are nearly all 3s. Grade compression at the top of the scale has merely shifted to the middle. Should Ekdahl initiate yet another round of performance reviews or make do with the data he has? The authors of this fictionalized case are Brian J. Hall and Andrew Wasynczuk, both of Harvard Business School. Expert commentary comes from John Berisford, currently of The McGraw-Hill Companies and formerly of Pepsi Beverages, and from Stephen P. Kaufman, currently of Harvard Business School and formerly of Arrow Electronics (the company whose performance-review system was the seed for this case). HBR's readers also weigh in.
How do you reduce headcount when almost everyone gets the same scores on performance reviews? HR vice president Nils Ekdahl confronts that question at Circale Corporation, a fictional electronic-components distributor that has just completed a series of acquisitions. Ekdahl wants to make the personnel cuts objectively, but the company's new performance-review system yields disappointing results: On a five-point scale, virtually every employee gets a 4 or 5 on each dimension. So Ekdahl instructs managers to redo the evaluations, tells them they're not allowed to give just 4s and 5s, and requires an average score of 3 across each manager's direct reports. This time the scores indeed average 3, but they are nearly all 3s. Grade compression at the top of the scale has merely shifted to the middle. Should Ekdahl initiate yet another round of performance reviews or make do with the data he has? The authors of this fictionalized case are Brian J. Hall and Andrew Wasynczuk, both of Harvard Business School. Expert commentary comes from John Berisford, currently of The McGraw-Hill Companies and formerly of Pepsi Beverages, and from Stephen P. Kaufman, currently of Harvard Business School and formerly of Arrow Electronics (the company whose performance-review system was the seed for this case). HBR's readers also weigh in.
Jim Golden wants to radically change how catastrophic trucking accident lawsuit claims are handled by his trucking company. He wants to "do the right thing" for both the claimant and his company. Golden is a former litigator with 16 years of experience defending corporations in wrongful death lawsuits. After becoming disenchanted with the traditional "deny, delay, defend" method of litigation, which is aggressive, adversarial, costly, and drags the process out for as long as possible, Golden decides to re-think how he practices law. Golden wants to introduce a "negotiation counsel" approach to claims where his company is at fault. Initially, he is unsure of specific tactics, but envisions non-adversarial, communicative, and problem-solving interaction. He believes that if all parties involved in a claim engaged in a joint problem solving manner (rather than as a win/lose contest), practical, just, and emotionally satisfying agreements can be reached much more quickly.
General Manager Luke Kolville, of the Los Angeles Spartans, struggles with the best approach to negotiate a long-term contract for his star quarterback. The agent for Washington is relatively new to the industry and has his sights set particularly high. Kolville needs to weigh a number of effects this negotiation will have on the player, his teammates, and the long-term prospects of the team.
This note briefly describes compensation and incentive issues in one of the major US professional sports leagues, the National Football League (NFL). It first provides some background information on the labor market for players and the salary cap, and then describes incentive issues facing players and their agents.
iBasis examines the development of a long-term relationship between equipment manufacturer Cisco and start-up iBasis, a voice-over-internet wholesaler. Questions arise for iBasis founders as to how best to build a beneficial relationship with the much larger partner. How aggressive should they be in their pursuit of specialized equipment designs from Cisco? How should they protect their own intellectual property? After several years of market success, and several relationship defining mechanisms (from informal to a memorandum of understanding to specific equipment contracts), the partnership is tested with the dot-com bubble bursting. Not only is the relationship at risk, but iBasis' very survival is in question.