Question

Your former director of business development contracted John Smith, an American consultant, to manage the development and marketing of one of the newer projects of the company.This project appeared very promising but is in fact bringing much lower revenues than originally anticipated. Mr. Smith just presented his expenses for his first class airfare tickets, five star hotel rooms and gourmet restaurant bills (with expensive French wines) of the last three months. Such expenses are a serious concern to your director of finances who finds them out of line. Your financial reports for the second half of this year would be improved if you negotiated an eight-month earlier termination of his 20-months consulting contract. That would help you wind down this project quicker. However, there is no good cause to base Mr. Smith’s termination on the lack of his contractual performance. In fact, some within your organization appreciate Mr. Smith’s work and believe he might turn things around, given additional time and manpower. You also have a suspicion about a potential conflict of interest. Indirectly, through an employee of HR, you have been told that Mr.Smith was seen in a night club entertaining Ms. Hodge, a project manager of your main competitor. Mr. Toba, a member of the Board of your company has been suggesting to your President that he might be more sympathetic to the under-performance of this project if you managed to contract his nephew George,a fresh MBA graduate from Northwest University, instead of John Smith. To review the contractual arrangements with Mr. Smith, you asked your contract department earlier today for a copy of his consulting contract. Unfortunately, they have been unable to locate their signed copy at this time.

Considerations for your Blackboard debate of this case:

1) How would you approach your consultant about various issues?

•Directly or indirectly

•Discussing all or just some issue; Why?

2) Would you try to work out issues with the consultant or terminate his contract?

3) Explain how such case would be handled if contracting company was residing in a certain country that you are familiar with.

Answer 1

1 Ans: I would approach my consultant directly to discuss various issues, because a direct conversation always helps in better decision-making. I will prefer in discussing all the issues which we are facing, so eventually by analyzing all the issues we can get strong solutions. So, I choose to approach my consultant directly and discuss all the issues in one go.

2 Ans: I would try to work out the issues with our consultant, so for that I will arrange a meeting with him and will discuss all his behaviors and financial status and will notify him that by observing all the issues he will be given a second chance but will make a few changes in the contract and issue a new on with updated policies. He can go through the agreement and can react accordingly.

3 Ans: Such cases should be handled in a very sensitive manner and also should be very attentive to every minor activity. Every country has its own policies and conditions so accordingly they choose to react to the situation.

Example: A company was residing in California and facing the same issue, so how our consultant and employer will react to this situation is as follows:

In California, law for employment is very strict and it will not spare if any employee is insulted. So in order to handle this situation employer should play a little strategy such as, they should give their consultant a second chance with an updated agreement and leave the choice to our consultant whether to take it or leave it. In case if he wants to file a case against us, he can definitely do so, but he will lose the case because even after many mistakes we haven’t fired him we just made few changes in his contract and asked him to sign it if he want to. So, apparently we have given him a new chance to clear the mess. We are on the safe side and we will win the case if it is in court.