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
Peters 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 Peters 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 Peters demands. But he is doubtful
about the reactions of investors and other channel partners on Peters exit. Rina is quite excited about
Stephens 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 Stephens offer. Reasons for the same are as follows:

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 Peters 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
Peters 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

Observations:

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 ones 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