A start-up software company (which we will call ISF) has based its marketing and executive branch in northern California, to be near its potential customers and investors. It has a small development team (12 people) in Sweden, based on a core of technical experts at a leading university. The development group also includes a few software developers who have joined from other high-tech companies.

A crisis arose in which the development team in Sweden was required to work 14 hours a day, seven days a week for two weeks in order to prepare and test a version of the company’s most important product so that it would be ready for shipment to customers. Venture capital in the company was almost exhausted, and failure to meet the deadline would threaten the existence of the company.

The development team succeeded in meeting the deadline, after which the US –based executives decided to reward the group with bonuses in the form of shares and share options.

Much to the surprise of the US executives, the team in Sweden refused the rewards, and reports reached California that they were saying that the Americans were ‘greedy’, ‘thought only about money’, and did not respect or trust the development team. For their part, the Americans concluded from this that the team in Sweden was ungrateful, and unwilling to take risks or to commit themselves to the success of the new venture.

In this bad atmosphere, the head of the development team in Sweden resigned, and three of his colleagues did the same.

1. What happened here? What are the possible reasons why this success turned quickly into a crisis?