First impression is very important when you are meeting anyone. One of the most important takeaways from the book is "be genuinely interested in other people".
Regardless of what the wife did, attraction is unconscious. The employee in this case is clearly the better man from evolutionary point of view instead of ethical point of view. At deeper level, he invested a lot in the employee, maybe...maybe too much (typical Mr. Nice Guy) that the employee is like the master and he the servant. Women are unconsciously attracted to men of power since the dawn of time. Also, it takes two to tango. The employee has a choice. This event can be prevented in many ways.
This is more than just "puff out your chest, be a man and get the girl". This whole event is rooted in evolutionary psychology. The power dynamics has unconsciously shifted towards the employee. This is like a power frame which is adopted in Pitch Anything (http://www.amazon.com/Pitch-Anything-Innovative-Presenting-P...). To overcome a power frame, you need to break it. If not, he will always submit to the employee's power frame unconsciously. This is not good for his productivity, his leadership, his being as a man and ultimately his company. One way to break the employee's power frame is to fire him.
From evolutionary point of view, the employee has dominated him by taking over his wife from him. Therefore he will naturally feel inferior. The employee's dominance is reflected in his subtle arrogance with no sign of remorse. He should man up and fire him or he is just a pushover, Mr. Nice Guy (http://www.amazon.com/No-More-Mr-Nice-Guy/dp/0762415339).
It is inevitable that hardware development cost is much higher compared to software especially at chip-level, in which the fabrication cost is getting higher and higher as the process node shrinks. Even the EDA tools used to design and develop the chip already cost a bomb. So, it is not surprising that the electronics firms struggle to reach 5% profit margin...
First impression is very important when you are meeting anyone. One of the most important takeaways from the book is "be genuinely interested in other people".