Alec Mason

Abstract

With MBA degree nearly in hand, Alec Mason has stormed the job market and come away with offers from two prestigious strategic-consulting firms in the Washington, D.C., area. Mason must decide between one firm that offers a low starting salary but high annual salary increases and another with the attraction of a higher starting salary but lower yearly pay increases. The case follows an MBA student as he weighs the perks, compares the figures, and articulates the criteria that influence his decision.

Excerpt

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ALEC MASON

At last, it was nearly over: two years of studies in an intense MBA program, countless interviews, a stream of company visits, and now the choice between two very attractive job offers. Alec Mason had aggressively interviewed with management-consulting firms and Fortune 100 corporate-planning offices. The effort had paid off with several very appealing offers, and now the contenders had been narrowed down to two prestigious strategic-consulting firms.

CF&M, Inc., a Boston-based firm, had offered Mason a position in its Washington, D.C. office (the Masons' preferred location as both Alec and spouse had offers there), with a starting salary of $ 102,500, a standard-benefits package (health insurance, life insurance, disability insurance, and retirement benefits), and coverage of all out-of-pocket moving expenses. After Mason's most recent telephone conversation with the partner who had made the offer, Mason knew that this was the best offer that could be expected from CF&M. Previous discussions had indicated that annual salary increases were typically about 5 percent for average performance, and that they ranged up to a maximum of 15 percent for outstanding performance.

Mason's second offer was from Haggerty Associates, the firm where Mason had worked the previous summer. Haggerty's offer, also in Washington, D.C., was for a starting salary of only $ 92,000, though it also included a standard-benefits package (health insurance, life insurance, disability insurance, retirement) comparable to the one offered by CF&M. Haggerty's offer also included free parking in the corporate garage during the first year of employment (a $ 1,200 benefit in the D.C. area). The offer did not include moving expenses, though Mason was sure that Haggerty would agree to pick them up as soon as the issue was raised. (Both Mason and spouse wanted the move to be handled by a professional and reputable moving company, and they already had several estimates, all in the $ 2,000 range.)

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Keywords: decision analysis