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  • Arck Systems: Presented by - Group 11

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    Zenish Khumujam
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    Arck Systems was a server manufacturer that purchased Lux Software, a middleware provider, to expand into the software business. While provisions were made to retain Lux's engineering team through bonuses and stock options, no provisions were made to retain Lux's key salespeople. Bryan Mynor was tasked with managing the combined sales forces of both companies, but problems arose due to a lack of communication around the new compensation plan and differences in what Arck and Lux salespeople were previously paid.

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    Arck Systems was a server manufacturer that purchased Lux Software, a middleware provider, to expand into the software business. While provisions were made to retain Lux's engineering team through bonuses and stock options, no provisions were made to retain Lux's key salespeople. Bryan Mynor was tasked with managing the combined sales forces of both companies, but problems arose due to a lack of communication around the new compensation plan and differences in what Arck and Lux salespeople were previously paid.

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    49 views7 pages

    Arck Systems: Presented by - Group 11

    Uploaded by

    Zenish Khumujam
    Arck Systems was a server manufacturer that purchased Lux Software, a middleware provider, to expand into the software business. While provisions were made to retain Lux's engineering team through bonuses and stock options, no provisions were made to retain Lux's key salespeople. Bryan Mynor was tasked with managing the combined sales forces of both companies, but problems arose due to a lack of communication around the new compensation plan and differences in what Arck and Lux salespeople were previously paid.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 7

    ARCK SYSTEMS

    Presented by - Group 11
    SITUATIONAL ANALYSIS
    ● Arck Systems was a medium sized enterprise server manufacturer
    ● Customers used the server to run proprietary software
    ● Software applications on Arck servers were made by third party
    houses
    ● CEO of Arck Systems envisioned to grow Arck’s software business
    ● Software market was growing faster than the hardware market
    ● And gross margins were double that of hardware
    ● Arck purchased Lux Software, a middleware provider at 50% plus
    market cap
    ● CEO and core members of engineering team of Lux were likely to stay
    back with the company as bonus provisions and stock options were
    given
    ● No provisions were made to keep the Lux’s key salespeople
    ● Bryan Mynor was tasked to manage both the companies’ sales force

    2
    Major Actors

    ▸ Bryon Mynor ▸ Rob Chatterji


    (Exec VP for (Chairman and
    Worldwide sales CEO of Arck)
    for Arck)

    3
    Major Actors cont.

    Evan Hong (CEO of Chris Snyder (EVP


    LUX) Sales for LUX)

    Sharon Esteves
    (Head of US sales of
    LUX)

    4
    PROBLEMS
    ▸ Advantage to average performers not
    communicated
    ▸ Loss of faith in the compensation plan
    ▸ the differences that may arise among the
    employees of the two companies due to a
    large difference in compensation
    5
    RECOMMENDATIONS
    ▸ Communicate the fairness of new plan via
    forums
    ▸ Design Compensation plan to have more
    accelerators with a cap on total incentive

    6
    THANKS!
    Any questions?

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