INDIAN INSTITUTE OF MANAGEMENT, INDORE

REPORT ON THE CASE

SAS REAL ESTATE: TO FIRE OR NOT TO FIRE

SUBMITTED IN PARTIAL FULFILMENT

OF THE WAC COURSE

SUBMITTED TO : PROF. AMRITA JOSHI

BY: GROUP NO (SECTION H)

ON: 16-Oct-2015

Letter/Memo of Transmittal

To: Prof Amrita Joshi DATE: 16-Oct-2015

From: Group No (Section H)

Subject: Report on the Case "SAS REAL ESTATE: TO FIRE TO NOT TO FIRE"

As directed by you, we have analysed the case and have come out recommendations and action

plan regarding the incident at SAS Real Estate.

Name: Group (Section H)

Commented [AJ1]: ?

Executive Summary

This report analyses the case 'SAS Real estate: To fire or not to fire?'. The report analyses the facts

and findings about the incident that took place on 3rd March, 2014 and evaluates the options in

front of SAS management to deal with the problem. The first option available to them is terminating

Shah, second is to not terminate him and run no trial against him and the third is to bring in a

replacement for Shah while internal investigation is going against him. We recommend that the

management goes ahead with the third option as it preserves the business as well as the ethical

position of the company.

Commented [AJ2]: No details?

Commented [AJ3]: ? whos this?

Table of Contents

1. Situation Analysis

2. Problem Statement

3. Options

4. Criteria for evaluation

5. Evaluation of the options

6. Recommendation

7. Action Plan and implementation

Situation Analysis

Sufi Abdul Samad Real Estate (SAS) was a Real Estate company in Sadiqabad, a small Tehsil of

Rahimyar Khan District in Punjab province of Pakistan. It was a partnership firm established in Mid

2008. The company was launched with three partners with Haider Ali owning the major stake. The

Real Estate market was highly competitive and SAS differentiated itself from other competitors.

The company had completed four projects by 2010 which helped it strengthen its credibility amongst

the investors and buyers; creating a brand name and identity in the market. The growth of the

company was steady, with the customer base expanding at a favourable pace, majority of which

was reference based. Recently, they had moved from manual bookkeeping method to

computerised database of sales and purchases.

Their two projects Rao Town Housing Scheme launched in 2009 and New Chandrami Town

launched in 2010 were highly successful and showed the innovation process of SAS.

Since most transactions were based on personal relationships the company had to be lenient in its

dealings which posed problems of irregular cash flows and liquidity crunch.

The company was facing serious human resource issues as hiring was not at the same level as

growth and minor shareholders were controlling majority of the operations. Also,there were huge

training and replacement costs involved which resulted in employees taking undue advantage for

favourable work terms.Since Sadiqabad was a small city, it was very difficult to find skilled and

professional financial experts which led to high hiring and replacement cost of employees.

The company appointed Ahmad Shahbaz as the chief accounting officer and Tanveer Shah as his

assistant to operate the complex accounting software. Shah was trained for an year to use the

software and act as replacement when Shahbaz left. Shah became the chief accounting officer in

2011 and was performing well until he became a suspect in a fraudulent transaction of a pre-signed

check worth 7.5 million Pakistani rupees. There was no concrete evidence against Shah and hence

he couldnt be convicted. Ali filed a case against the bank for failing to detect false signatures and

honouring a fake id card.

Problem Statement

Alis dilemma whether to fire Tanveer Shah based purely on circumstantial evidence or to retain

him since his guilt could not be proved.

Options

1. Terminate Tanveer Shah

2. Don't start any investigation against Shah and let him go scot-free.

3. Bring in a new employee and train him on the software besides run an investigation against

Shah.

Criteria for Evaluation

The situation should be evaluated on the following criteria -

1. Loss in expertise - The company would very well come to point of standstill if it loses anyone

as instrumental as Tanveer Shah as he is the only person trained to work on the software

and understands the business of SAS Real Estate.

2. Loss of valuable time and project - The company stands the risk of poor performance on a

signature project if it lets go Shah.

Commented [AJ4]: Present tense

Commented [AJ5]: ?

Commented [AJ6]: Independent point?

Commented [AJ7]: Problematic transition

Commented [AJ8]: Sentence construction

Commented [AJ9]: Clubbed together?

3. Loss of Reputation - As the community in Sadiqabad is very close knit, it would spread a

bad word about the company's processes and staff.

4. Court proceedings - Tanveer Shah might as well take the company to the court for unfair

dismissal.

5. Impact on other employees - The company should take a stand so as to lessen such

outward behaviour among its employees who would be observing the treatment keenly.

6. Fair decision

Evaluation of the Options

1. Option 1 - Terminating Tanveer Shah can have many repercussions upon the reputation of

SAS. As per the enlisted criteria above, the company will lose its expertise, valuable time

and reputation. Though the company can show it is intolerant towards corruption but if that

is done it will be without a fair trial.

2. Option 2 - SAS can keep quiet and reap the benefits out of Shah's expertise. All the more,

it can use him for its own advantage of having a smooth run with the newly started project.

But, it may seem as if the company is very lenient towards such unfair practices. This can

be the budding point for more of such incidents in future by other employees.

3. Option 3 - This option deals in a balanced manner with both, the business wisdom as well

as ethical principles. The new project will not be affected much and the company can save

its reputation in a highly competitive market in Sadiqabad. SAS will also divert the court

proceedings against it by Shah.

Recommendation

The most feasible option in front of the SAS management and Haider Ali is to go with option 3, that

is, bring in a new employee and train him on the software besides run an investigation against

Shah.

Action Plan and Implementation

The action and implementation plan can be as follows -

1. Haider Ali should bring in the new suitable employee in the capacity of Shah's secretary.

2. Train the new employee and allocate him more and more responsibility.

3. Wait for the internal as well as court investigation to get over.

4. If Shah comes out as not guilty, then give him a promotion and higher responsibility.

Commented [AJ10]: No explanation?

Commented [AJ11]: Cost, training?