Arck Systems Case Analysis
Table of Contents
OVERVIEW 3
BACKGROUND 4
ARCK SYSTEMS 4
ARCK SYSTEMS’ MERGER WITH LUX SOFTWARE, INC. 4
DIFFERENCES IN SALES MANAGEMENT 5
THE CRITICAL ISSUE 6
ANALYSIS 6
Overview
This paper will discuss the history and background of Arck Systems and its merger with Lux Software. I will then examine, discuss, and analyze the nuances of the merger and the resulting issues that arose with different compensation packages for each company’s sales team. In my analysis, I will address the intended and unintended consequences of incentive compensation plans. Finally, I will offer my recommendations to Arck Systems. Background
Arck Systems
Arck Systems was a medium-sized manufacturer of network computers used by many corporations to manage data. Customers used the serves to run software that helped them manage finances, compensation & benefits and customer accounts. This hardware was integral to ensuring the success of the corporation. In addition to the hardware it produced, Arck also developed and distributed an operating system with its servers; however, third party software companies provided the software applications.
Arck Systems’ Merger with Lux Software, Inc.
In order to strengthen and expand its software business, Rob Chatterji strategically decided to acquire Lux Software, Inc. Lux Software, Inc was a leading provider of middleware. Middleware is software that acts as an intermediary between different software applications. More companies need middleware as enterprise software applications become more complex making middleware a rapidly growing product and industry. Middleware Purchasing Lux was an ingenious move on Arck’s part because it provides a surefire way for them to develop the software side of their company in addition to enhancing the operating system they’ve developed for their hardware. Arck was able to purchase Lux Software, Inc rather quickly in order not to disrupt the flow of business. The merger/acquisition
OVERVIEW 3
BACKGROUND 4
ARCK SYSTEMS 4
ARCK SYSTEMS’ MERGER WITH LUX SOFTWARE, INC. 4
DIFFERENCES IN SALES MANAGEMENT 5
THE CRITICAL ISSUE 6
ANALYSIS 6
Overview
This paper will discuss the history and background of Arck Systems and its merger with Lux Software. I will then examine, discuss, and analyze the nuances of the merger and the resulting issues that arose with different compensation packages for each company’s sales team. In my analysis, I will address the intended and unintended consequences of incentive compensation plans. Finally, I will offer my recommendations to Arck Systems. Background
Arck Systems
Arck Systems was a medium-sized manufacturer of network computers used by many corporations to manage data. Customers used the serves to run software that helped them manage finances, compensation & benefits and customer accounts. This hardware was integral to ensuring the success of the corporation. In addition to the hardware it produced, Arck also developed and distributed an operating system with its servers; however, third party software companies provided the software applications.
Arck Systems’ Merger with Lux Software, Inc.
In order to strengthen and expand its software business, Rob Chatterji strategically decided to acquire Lux Software, Inc. Lux Software, Inc was a leading provider of middleware. Middleware is software that acts as an intermediary between different software applications. More companies need middleware as enterprise software applications become more complex making middleware a rapidly growing product and industry. Middleware Purchasing Lux was an ingenious move on Arck’s part because it provides a surefire way for them to develop the software side of their company in addition to enhancing the operating system they’ve developed for their hardware. Arck was able to purchase Lux Software, Inc rather quickly in order not to disrupt the flow of business. The merger/acquisition