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POACHING, NEPOTISM

AND THE DILEMMAS OF


A GROWING CAREER:
A CASE STUDY

GROUP 1

Tushar Parmar (ABM13012)


Nikita Das (ABM14032)
Abhishek Choudhary (PGP33259)
Ashu Airan (PGP33265)
Debasmita Kumar (PGP33271)
Karan Bhuwania (PGP33277)
Mudit Gupta (PGP33283)
Sakshi Fotedar (PGP33289)
Shivanjali Yadav (PGP33295)
Naveen Surisetty (PGP33301)
INTRODUCTION

Organizations consists of various players with various roles. These players have different
values, goals and interests. This sets up the potential for conflict over the allocation of limited
resources. It showcases the impact of communication, leadership, power & politics on
productivity, group cohesion and withdrawal behaviour.

The case aims to highlight the importance of motivation, values and leadership and its effects
on the team and company. This case clearly illustrates the relationship between attrition
rate(churn rate) of a certain organization and the following factors:

Team restructuring
Job satisfaction and turnover
Performance evaluation, Reward system and employee motivation
Individual perception and bias

It goes on to illustrate the impact of organizational injustice; and behaviour of individuals


when they perceive that they are being subjected to procedural and distributive injustice.

The lack of consideration shown by the management and executives and its impact on
citizenship behaviour of the employees is also examined.

The situations concerning organisational behaviour by assessing the impact of restructuring


in organisations affects employee performance outcomes as well as investigating the degree
to which these effects further leading to decisions like leaving the teams or the
organisations predominantly affecting the entire team dynamics. A questionnaire was
designed to collect data from 10 different subjects who were employees of a large consulting
company posted Gurgaon Office of India. The scenario was poaching of senior management
officials by a competitor firm. This was followed by a restructuring in the team at the time
when important projects were towards the end of completion and appraisal cycle was near.
This led to a preferential treatment to the employees who were being left thus leading to a
decrease in motivation and job satisfaction. It was observed that these situations highly affect
the performance of the teams and organizations, lead to further attrition in the organizations
and badly affect the team dynamics.
COMPANY PROFILE

ABC is one of the leading consultant firms across the world, organised into the following
three service lines: audit, advisory & tax. ABCs differentiation is derived from a rapid
performance-based, industry-tailored and technology-enabled business advisory services
delivered by some of the leading talented professionals in the country. ABC professionals are
grouped by industry focus and their clients are able to deal with industry professionals who
speak their language. Our internal information technology and knowledge management
systems enable the delivery of informed and timely business advice to clients.
Telecom department is one of the unique selling proposition of the firm ABC, and its cash
cow, with the best and the largest team among all its major competitors in the market,
handling majority of the International clients of the firm from its Gurgaon corporate office.

CULTURE ACROSS TEAMS

Each partner in the firm ABC has equal power over their sector. All these 5 partners exhibit
distinct cultures through their team. However, a few points distinguishes the Telecom team
culture from the rest of the teams. The complete telecom team facilitates as a support system
for each and every team member associated with the team. The team expedites the learning
process through in-depth research sharing of each new entrant to the team, to those who
switch knowledge domains. This mentoring and guiding spirit in the team has bolstered their
spirit to work as a team and multiplied the trust they show in each other. As compared to the
other teams, where this kind of mentoring facility does not exist and leads to longer turn out
time for the project and lack of trust among the team members. In regards to performance
appraisal and recognition, in the telecom team the performance of each and every person,
disregard the position was monitored minutely, and every extraordinary effort was
appreciated by the partner himself, through monetary and non-monetary recognition, while
on the other hand, 2 other teams struggled with a syndrome where the sycophants were
rewarded by the seniors which led to major discontent among the high performers of the
team. The telecom team further even the lowest ranks of their team through a reward
structure which awarded the analysts for getting clients, where as in the other teams the
whole recognition was given to the manager for the efforts of the lower nodes. This kind of
reward structure, recognizing only the senior management passing over the junior members
of the team, deeply affected the team culture in the other teams.

MARKET CONDITIONS & COMPETITIONS

ABC is one of the leading consultant firms in India. The market of consulting was almost
evenly distributed among some firms. ABC has the maximum share in its revenue from the
consulting business. PQR is the leader in the consulting business with the maximum market
share. XYZ is also one of the leading consultant firms was smaller as compared to ABC in
terms of number of employees and partners. Both the companies also had a fair share in the
auditing space too. XYZ was the strongest in the Indian auditing space. XYZ, PQR and ABC
had a very strong competition with each other in both consultant and audit services. An
expected change in the auditing space of mandatory auditor rotation rule was going to
threaten XYZs strongest position in the auditing business. This would lead to a huge
reduction in the revenues of XYZ from the auditing business and hence would affect the
overall revenue of XYZ. This was a great setback for the XYZ. XYZ started to shift the focus
from the auditing business to consulting practices. The shift in focus led to the poaching
incident.

POACHING INCIDENT

As explained above XYZ had a shift in focus from the auditing business to consulting
practices. XYZ wanted to make sure that the loss in the auditing business can be covered up
by the increase in revenues in the consulting business.

The consulting team of XYZ was smaller as compared to the other players in the market.
XYZ was looking to expand its business. For expansion in business XYZ was looking to
expand the consulting team and hire some of the already established names in the market.
This aggressive approach of XYZ led to the poaching incident.
Due to the enviable status that the telecom department enjoyed, both in respect to the clients
and team members, in December 2016, the rival firm XYZ made an attempt to absorb the
Head of the Telecom Division into their own firm. Since XYZ was offering a better
incentive, the poaching attempt was successful. Due to the trust and the unity that existed in
the team and their trust on their leader, which was built through years of working together,
the Head of Telecom sector was successful in taking away almost the entire team across
departments with him to the rival company. The entire event spanned the whole of January
2017.

This was a major setback for ABC as the firms maximum revenue came from the consulting
services. Prior to this incident the leaders of the consulting business were ABC and PQR with
PQR having the market share. The incident has replaced ABC with XYZ in the race and XYZ
is now going to challenge the market leader PQR.

ORGANIZATION HIERARCHY
POST POACHING INCIDENT

Due to the poaching, two out of original five partners remained in the department in which
Sakshi worked. The remaining employees of those 3 teams were absorbed by the other 2
teams. So, there was a situation when two types of employees remain: (1) The leftovers from
the team whose partners left the organization, (2) The employees in the other team.

Depending on how these remaining employees adapted to the changed conditions, we are
categorising remaining employees into the following categories :

1. Adjusters These were some of the people who adapted to the situation quickly, and
adjusted to the new teams. As per person SG, who falls in this category, the shift from
one team to another was difficult but it had to be done, he had friends at his level
working in that particular team, understood the culture of that particular team and
adapted to it.

2. Growers These were the people who were in the other 2 teams since the beginning,
and now that their partners were essentially heading the department, these people
came into prominence and were able to garner the challenging projects with some of
the best clients.

3. Sideliners People from the other 3 teams who were left behind, and could not adjust
to the situation. These people had to fight to be plotted on the better engagements, to
receive due credit, promotions, and bonuses.

On several ongoing projects from the teams of the partners who had left, were still ongoing
and led by the Associate Consultants/Consultants who had been working on the engagements
beforehand, however, new managers were appointed by the new partners, and the partners
devalued the contribution of these ACons/Cons on these projects entirely.

On several occasions promotions were not awarded on the basis of merit but because of the
employees successful networking skills, be it with the partner or senior management. For
Sakshi it started out in February with a particular project in the Manufacturing Industry. After
the partner who headed her team left, the entire responsibility of carrying the project duties
out successfully, fell on her shoulders. Despite having never worked with client in this
particular industry before, she decided not to let go of the project and invested a great many
hours to see it to its end. Post its successful completion, due to the hard work she had put into
it, Sakshi expected to be rewarded accordingly. However as fate would have it, another
employee bagged the promotion because of her personal relationship with a member of the
senior management.

CONCLUSION

In May 2017, an Associate Consultant from the telecom team, unable to handle the change in
culture decided to change his division of the company, and moved out within a month of the
incident. This was one of the many instances that had occurred from March to May and they
impacted performance and attrition rates to a great degree with several employees
demotivated and on the lookout for exit options and several others leaving the firm
immediately for opportunities in other rivals of ABC. Both of these factors, were battering an
already shaken ABC, and recognising this issue the company decided to build cohesion and
unity in the team via team building activities, offsite, and birthday celebrations ,the month
of march onwards.

In June 2017, Sakshi, along with several of her colleagues attended a birthday celebration.
Till then, the partner who headed her team had not interacted much with Sakshi, and had
consistently ignored the amount of work she would put in each project, favouring people who
had worked under him previously, despite the clear difference in the quality of their work and
the intensity of their efforts. However, Sakshi was determined to change the state of her
situation. The celebrations were organised to improve the team bonding and smoothen
interactions among the partners and their team members. What Sakshi noticed was that
despite trying to initiate a conversation with the partner, she was snubbed and he went over
and exclusively interacted with the team members who had worked under him previously.

Sakshi realised that the team building efforts that the company was making were in vain. The
culture had deteriorated to a degree where half-measures would no longer be effective. The
company, which was once a pure meritocracy, had descended into one seeping in nepotism
and favouritism. The lack of a sound reward structure demotivated people from putting in
their best efforts.
The senior management failed to stem the attrition rate, and people continued to leave the
firm in droves, depriving it of critical talent which it was now forced to source from Tier II
firms in the industry.

Sakshi was now faced with a difficult choice. ABC was where she had started her career and
nurtured it. She was fiercely loyal to her firm, however, she realised that staying her would
not contribute to the growth of her career. It might actually be detrimental in the long run.
Meanwhile, Sakshi had been offered a promotion at the rival firm XYZ. Despite the
opportunity of rising to a higher position with better benefits, Sakshi had decided to stay loyal
to her firm and not leave. She had been hopeful that the efforts that the senior management
was making in order to improve team bonding would be effective in countering the blatant
favouritism. However the measures were failing miserably and now, it was perhaps time for
her to weigh her options and make a judicious choice in the best interest of her future and her
career.

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