“Bingeable – is it worth the risk?

”
A Case of PacSquare Inc.

This case was written in 2021 by Anum Sheraz1, student of MBA (Human Resource
Management) at Capital University of Science and Technology2 Islamabad, Pakistan. It is
intended to be used as the basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation.

“Bingeable – is it worth the risk?”

1
anum_sheraz18@yahoo.com
2
www.cust.edu.pk

1
A Case of PacSquare Inc.
__________________________________________________

It was the middle of the pandemic that the CEO of PacSquare, Mr. Farhad, thought that
continuing with the current business model was very risky. While sipping the hot
beverage in his hand, he thought about the rough year that company had. The DevOps
department had failed miserably to lure in any new clients and the reality of working on
project based work started to sink in. The financial reserves were depleting quickly as the
business operational expenses had to be paid off whether or not revenue came in. Lock
down all across the globe had made it extremely difficult to get new work from clients.
Investors were reluctant to put their money in new IT projects because of the ambiguity
and the possibility of highly reduced returns. Farhad had recently received an email
from his DevOps Manager, Mr. Hassan, who was also worried about not getting any new
projects. Hassan hinted at the fact that current business model was reliant on the skills of
the company to acquire new IT projects like a freelancing firm which was alarming.. The
model was risky with months of dry spells where no clients entered into contracts and
there were no new revenues. He suggested changing the business model to a model that
only worked for one huge client. It seemed impossible at first but now that Farhad
thought more about it, an idea formed in his head. ‘Bingeable’ could be their key to
changing the business model entirely and come up even stronger.
Before the pandemic had hit, Farhad was approached by a company who wanted to work
long term on a business model almost similar to Netflix yet poles apart. This app would
allow customers to rent shows that starred high ranking Hollywood stars. The viewership
and renting volume will determine the royalty payments to be received by these high
profile stars. It was a high Tech project. The client company required PacSquare to
become their dedicated offshore IT house and work on Bingeable exclusively. PacSquare
will have to be rebranded as an operational base for Bingeable. Although he had said no
at the time, now Farhad was intrigued to toy with the proposal at little more and see
where it would take the firm.

2
Background

PacSquare technologies is a global 360° IT Solution Expert. This is a small sized

company with around 50 employees working in the capital city of Pakistan while catering
to the needs of international clients throughout the world. PacSquare is a team of
dynamic and versatile professionals who are providing technological solutions to various
complex and challenging problems to their business clients all across the globe. The
company’s current model is based on project orders with no long term revenue streams.

In the start of 2018, the CEO was approached by USA based Bingeable team with a
proposal that was lucrative but could bind the firm into changing its business model.
Things were good for PacSquare at the time and it only made sense to decline the offer
and continue things as they were. The pandemic changed everything and trampled the
current business model’s success. By the mid of 2020, Mr. Farhad was in the process of
negotiating the terms and conditions of working solely for Bingeable.

The company had always worked on international client projects with a dedicated team
who worked on pitching ideas to prospective clients in USA and the UK. Things were
great and the company was flourishing under the leadership of the CEO, Mr. Farhad.
Until the pandemic hit and created an array of problems where clients backed out of
investing in IT projects due to the Global ambiguity, risks resulting from covid-19 as well
as the projected returns that continued going downhill. It was at that time Farhad
consulted with his DevOps manager, Hassan, and discussed the idea of working
exclusively for Bingeable in the long run.

It was a huge decision that required reimagining the whole business model and working
as an offshore IT house for a foreign company. It was a possibility that a small proportion
of employees will have to be let go and jobs/tasks design will be revisited. Employees
were already feeling insecure in their jobs due to the temporary salary cuts a few months
back. PacSquare couldn’t stand to lose its top employees who were the heart of both iOS
and Android teams. Without this team of brilliant/experienced programmers and

3
developers, PacSquare will surely not be able to negotiate in their own favor. The change
required a thorough plan to smoothly shift from one business model to another while
retaining the best people and keeping them onboard. However, there was a real
possibility that employees will take this change negatively because they will miss
working on new exciting and innovative projects.

The Decision
Thinking about the survival of the organisation in the longer run, Farhad had to take the
strategic decision of entering into a contract with Bingeable Incorporation and acting as
their Offshore IT house that was fully dedicated to working on PC version as well as
Android and iOS app of the project for global viewership. Farhad along with the DevOps
manager and team leads decided on sharing the news with his team as soon as plans
started taking off. The aim was to communicate the impending change with zest and
vigor in the most strategic manner that would allow employees to get excited about the
new beginnings rather than despising and resisting it.

A company-wide meeting was held after carving out the initial change management plan.
The CEO along with the DevOps Manager took lead and told employees about the
impending changes in the company structure and the nature of work that was to be
carried out in the future. Employees were given detailed overview of the decision and the
benefits that were associated with changing the business model including consistency in
work flow, possible opportunities of working in overseas offices of Bingeable and job
security in the longer run. The CEO ensured that employees were given time to think
about the upcoming changes and given the opportunity to put forth any queries. The aim
was to reduce the chances of resistance to change and possible quitting of important
employees in the team.

The higher level management ensured that employees felt heard and their concerns were
addressed with effective communication techniques. For important updates direct method
of communication like face to face meeting was used. The whole discussion was
concluded within a week and by then a huge chunk of employees were vocal about their

4
enthusiasm with regards to the new business opportunities that will become possible by
working with an international organisation. Things looked good and Farhad felt at ease
with the decision.

The Problem
Although the USA management of Bingeable had initially agreed to let Mr. Farhad run
things at the new offshore IT house but in March of 2021, the team from USA wanted to
visit and see how things were running. This sudden visit was interpreted as an intrusion
by the employees. People at PacSquare felt rushed because they were not finished
completing the client projects that were PacSqaure’s commitment. It put a pressure on
them to act quickly and finish the prior commitments so that turning PacSquare into
Bingeable IT house plan could finally be officially implemented. Employees felt
threatened by the sudden arrival of the new management and job insecurities seeped in
despite the best efforts to keep them at bay.

The DevOps Manager, Mr. Hassan, could sense the panic and the errors that were
increasing in the work of their well experienced programmers. A work havoc had
wreaked, team mentors were putting in effort to train interns and newly hired employees.
The CEO and DevOps Manager feared that the uneasiness that employees felt will turn
into frustration and resistance. The plans were at risk because the official inauguration of
Bingeable IT house wasn’t due till October 2021 and already the employees seemed
flustered by the pressure to wrap up things for PacSquare.

What was done?

A picnic was organized let employees feel at ease and under no pressure. Nothing with
regards to the business model changes was discussed at the picnic and it was arranged as
an opportunity to blow off some frustration. In the coming week discussions about how
work needed to be managed before PacSquare turned into Bingeable IT house. Farhad
knew that communication needs to be two-way in order to cut the HR losses. Thus
employees were given a medium to channel their thoughts in to coherent issues that

5
needed to be addressed by the management. Employees provided feedback about the
training programs that need to be carried out before they started working on Bingeable
App. The management then created various workshops with regards to Java programming
as well as the other skills required. Despite all the efforts, three employees from the
android development team left PacSquare and replacements were hired within a month.

A solid, dedicated and well-motivated team was being put together to effectively deal
with three different versions of Bingeable (Website, Android, iOS). Employees also
raised their concerns about changes in management that could potentially affect the work
culture. They were fearful that once Bingeable team takes over PacSquare the old
management will not be able to provide its employees with the current cool, learning
workplace environment. They were reassured that things will run smoothly and in a
similar fashion. Employees will also get raises because the payment will be coming from
the new owners. Although things seemed tough around April 2020, now the plans are in
their implementation stages and PacSquare is officially turning into an offshore IT house
for Bingeable in October 2021 as planned.

Discussion Questions
1. How do you analyze Mr. Farhad’s decision to bring changes to the business model?

2. How Farhad’s change initiative can be mapped with Levin’s change management
model of unfreezing, changing and refreezing the situation?

3. What are the real reasons of problems faced by employees of PacSquare?

4. Was Farhad able to handle the problems effectively? If so how?