Leader’s Call (A)

The CEO of a large power company caught in the middle of a severe economic crisis struggles to come up with recommendations for the Supervisory Board regarding his executive team members' compensation. Conflicting messages from the labour market, the dramatic devaluation of the local currency against the dollar, diverging expectations of the team members and the ambivalent stance of the parent company complicate his choice.

The objective is to foster a discussion about leadership in times of economic crisis, when the buisness environment undergoes significant changes and executives must adjust their mental models, organisational practices and policies to reflect a new reality, and yet preserve continuity and strengthen employee morale. The case is built around the sensitive issue of executive compensation, allowing students to step into the shoes of the CEO, plan his actions and make critical decisions. It can be used as an in-class individual exercise where students have to choose between alternative approaches for dealing with executive compensation presented in the case, or as a basis for group discussion.