Search results

This case presents the history and recent governance challenges of Carvajal, S.A., a Colombia-based, family-owned, billion-dollar-plus holding company that had offered printing-related (e.g., Yellow Pages, notebooks) and other products and services across and beyond South America for more than a century. Specifically, the case details the company’s state of affairs in early 2011, a time by which Carvajal’s flagship businesses had matured rapidly with the emergence of digital technology and diminished demand for paper/print-based products. Though profits and growth remained positive, Carvajal’s leaders knew that upholding the business’s legacy of returns, dividends for all family members, and extensive philanthropy would take significant strategy and execution.

Compounding the strategy issues, Carvajal faced these market challenges with new leadership: the first non-family CEO since the company’s inception. Well-established Colombian executive Ricardo Obregon had been hired in 2008 over two family candidates to lead the business. Obregon was to oversee a complex governance network that included a holding company with seven operating companies, their management and respective boards, a family council, and 280 members (including spouses) of a shareholding family in its sixth generation. Carvajal’s business and family leaders had to face market issues and decisions that included the possibility of taking public the operating companies and/or the holding company while maintaining the business’s long traditions of unity, respect, strong ethics, and philanthropy. That meant optimizing several crucial relationships: between the family and the new CEO; between the family and the board; between the operating companies and the holding company; and between members of the large Carvajal family, many of whom now resided outside of Colombia and Latin America.

Understand general and specific challenges associated with carrying on a longstanding family business facing multiple market challenges; explore the process of engaging a complex family-business governance network to handle business challenges while maintaining family values; consider the effects of culture on a multi-generation family business.

The case deals with Arihant Retail, a family business firms located at Chennai in Tamil Nadu, India. It is a small scale firm, with a turnover of ‘340 million in 2009–10. Mr. Vishal Surana, the young Chief Executive of Arihant, dreams of making this into a ‘3 billion store by 2015. He has a concept named “Hot Male”, a chain of stores stocking trendy fashionwear targeted at the “funky” young generation belonging to the SEC (Socio Economic Classification) “B” group. He is excited about it, and thinks he can build a whole new concept and grow based mainly on these “Hot Male” stores. Being a family firm, however, he has to take into consideration the views of his family members (they do not seem to interfere in any way) and family friends of long standing, who have their own views. The case outlines the broad options available to Vishal taking into account the business logic, the family logic, and the top management aspirations.

The case can be used in strategic management, international business or ethics courses. In strategic management courses, students will be able to identify political relationships as sources of a firm’s competitive advantage. Students will also understand the role of ethics in the firm’s competitive advantage. In international business courses, the students will be able to analyze the role that corruption and bribery play in the analysis of a country’s institutions. Students will also understand how corruption in a host country influences a firms’ decision to internationalize. Finally, students will understand the challenges that firms face when serving customers in other countries. In ethics courses, students will understand the nature of state/business corruption, i.e. the abuse of public office for private gain and the concept of state capture, i.e. managers controlling the political system for their advantage. Students will be able to analyze the decision of whether to collaborate with unethical partners or customers.

Bell Pottinger Private (BPP) was a British public relations (PR) firm with a successful but questionable reputation of helping famous critical figures and despots improve their public image. In 2016, Lord Tim Bell and the other leaders of BPP were asked to create a PR campaign for the Gupta family. The Guptas were a group of businessmen headed by three brothers who migrated from India to South Africa in the early 1990s. By the 2010s, they had built a business empire allegedly thanks to a corrupt relationship with the President of South Africa, Jacob Zuma and his family. The press and prosecutors were increasing their investigations on these relations. The case has two parts, which address two separate challenges and can be taught as standalone cases or in a sequence in two sessions.

MBA and Executive Education.

Teaching notes are available for educators only.

CSS 5: International business.

In October 2004, Mr. Richard Sands, CEO of Constellation Brands, evaluated the potential purchase of The Robert Mondavi Corporation. Sands felt that Mondavi's wine beverage products would fit into the Constellation portfolio of alcohol beverage brands, and the opportunity to purchase Mondavi for a highly favorable price was quite possible due to recent management turmoil at that company. However, should it be purchased, strategic and operational changes would be necessary in order to fully achieve Mondavi's potential value. In making a decision, students need to consider the attractiveness of the wine industry, its changing structure, its share of the overall market for beverages, and rival firms' strategies. As rival bidders may emerge for Mondavi's brands, Constellation must offer a price that demonstrates its serious intent to acquire Mondavi.

Reflect on the influence of different lifecycle stages on the strategy of a family business; evaluate the impact of family, industry and company dynamics on the evolution of a family firm; assess the impact of ownership, governance and succession considerations on the sustainability of a family firm; and develop decision-making skills to overcome specific dilemmas and secure the family business longevity.

Five industries, three generations and one family business. What started off as an entrepreneur’s ambition, Almajid Limited has proven itself to a sustainable source of revenue and a diverse portfolio of businesses for multiple generations of a Saudi Arabian family. This case study offers an exclusive opportunity to follow the tumultuous journey of a Saudi family business and analyze the different phases of its evolution over seven decades and three generations. In particular, the case aims to highlight the complexities surrounding the management of a family firm and illustrate how various lifecycle stages stemming from a number of areas (e.g. family, company, industry, ownership and governance) simultaneously influence the family business strategy. Being deeply embedded in the context of Saudi Arabia, the case unveils the unique challenges of managing a family business in a conservative cultural setting. The case study is divided into four parts, with each of them putting the emphasis on a different lifecycle area of significance for the evolution of the family business. Each part culminates with the identification of an area-relevant dilemma that needs to be addressed for the family firm to be able to move into the next stage of its development. Part A focuses on the family area or axis, the Part B on the industry axis, Part C on the company axis, while Part D is based on the sustainability axis, which embraces as many as three dilemmas in relation to the ownership, governance and succession in the family firm. Moreover, each part incorporates a timeline of critical events that contributed to the emergence of a specific dilemma and a culturally-rooted anime that helps the readers visualize the story, picture somebody else’s reality, and empathize with the key protagonists of the case to achieve optimal decision-making.

Graduate audience: Master of Business Administration or Master of Global Entrepreneurial Management.

Teaching Notes are available for educators only.

CSS 11: Strategy.

Family business

This case study is relevant for undergraduate and post-graduate degrees, specifically in the field of entrepreneurship. This case can be applied in the family business and entrepreneurship module.

This case highlights the issue of succession planning in a family business. It describes the problem faced by the founder of a security service company, Kurniawan Security Services Sdn Bhd., in handing over his business to his sons. The case depicts the occurrence of conflicts as one of the common problems in running a family business which, in the end, may affect the perpetuity of the business concerns.

Upon completion of the case analysis, students should be able to explain the concept of entrepreneurship in the context of a family business, discuss the issue of succession planning commonly associated with running a family business, analyse critically the nature of conflicts that may occur in a family business and suggest how the problem(s) can be attempted to be solved from within the business management perspectives.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Leadership, international business, financial reporting, entrepreneurship

The case study is aimed at undergraduate students at a 300 level.

Mr Badr Jafar, co-founder of the Pearl Initiative (PI), is the chief protagonist in this case study set in the Gulf Arab states. He launched this company at the United Nations in September 2010, and the launch was timely, as business leaders were looking to rebuild the global economy following the economic downturn. The Initiative was originally the idea of a number of leading company owners in the countries of the Gulf Cooperation Council (GCC). The company vision is to improve business practices for the benefit of business and society in the future, but the context is one of a highly competitive and secretive business environment. The mission of the PI is to improve private sector corporate culture to one of transparency and accountability. The PI approaches that mission through building a network of business leaders in the GCC, particularly those from the family-owned companies in the private sector. A biography of the founder and the background to the founding of the PI is given, followed by a rationale of the company structure. The potential influence of the network of companies and leaders on the socio-business climate is considered. The specific activities are outlined within the strategy of the PI to address four key business areas: anti-bribery and corruption; corporate governance; corporate reporting; and women in leadership The PI focuses on raising awareness about the potential benefits of social entrepreneurship for business and society. To what extent this relatively new model of business can be successful in the context of the GCC is a case dilemma. Key issues: There are two main issues raised in the case study: the rationale for the relatively new business model of social entrepreneurship and the extent to which PI can modify the past and current GCC business environment by addressing the four business areas.

Students will be able to: analyze the business case for social entrepreneurship and explain the contribution of PI activities for changing the business environment.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

This case can be used to help students achieve the following objectives: To project financial statements and assemble different pieces of financial information to create a valuation model (objective #1, create), To calculate a value for Arcor shares, supporting the estimated value with the chosen assumptions and methodologies (objective #2, evaluate), To draw connections between four different approaches to valuation (DCF, EVA, RV and VI), contrasting them and weighting their advantages and limitations (objective #3, analyze), To examine the relationship between forecasted financial statements and valuation (objective #3, analyze), To discuss the calculation of the Weighted Average Cost of Capital in a new situation as is an emerging economy, with the corresponding country-risk adjustment (objective #4, apply), To discuss the sources of value creation in a family-owned private company in a developing economy (objective #4, apply), To understand the dilemma that the head of a company was facing, identifying the three possible financing alternatives discussed in the text as follows: corporate bonds, earnings reinvestment and an IPO (objective #5, understand). To recall basic facts, as the main character’s opinion on the direction of the local economy or the fact that Arcor already complies with the information requirements of a public company (objective #7, remember).

This case is based on the valuation of the world’s largest candy maker, Arcor S.A.I.C., originally a Latin American company, which remains a private family business. The key problem presented by the case is the use of different valuation approaches to price Arcor shares, in view of a possible Initial Public Offer. The case illustrates the application of four main valuation approaches as follows: Discounted Cash Flow (DCF), Economic Value Added (EVA), Relative Valuation (RV) and Value Investing (VI). Additionally, it includes a fundamental analysis of eight years of historical financial information and the preparation of forecasted financial statements. Set in a developing economy, the Arcor case introduces the complexities of calculating the cost of capital with the inclusion of country risk, as well as the financial analysis distortions caused by an environment of high inflation.

The Arcor case is appropriate to be used in graduate courses of Corporate Finance, Valuation or Private Equity.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

Venture capital and private equity.

This case is suitable for II MBA/Executive MBA (venture capital and private equity/entrepreneurship/business models/managing family business) courses.

Soliton is a technology and software services company with operations in India and the USA providing machine vision products and virtual instrumentation services. Soliton was started by Ganesh Devaraj in 1998 after his return from the United States after higher studies. Ganesh hails from a business family in Coimbatore that had interests in the textile spinning sector. The family had been in the textile business since the early 1940s and had revenues of Rs 400 million and employed about 700 people. Ganesh, not wanting to continue in the traditional family business, ventured into the technology sector using his academic and professional experience. His family was supportive of his venture and funded his company for the first two years of operation and for scaling up operations. Ganesh is now evaluating various sources of raising additional capital at a time when there was general slowdown in the automobile sector as a result of the global financial crisis.

The goal of this case study is to illustrate the complexities that exist in financing growth of companies in uncertain times. This following are the expected learning outcomes: discuss and understand the nuances between different sources of early stage funding: personal wealth, family, and angels; compare and contrast the differences between family funding and venture funding; and highlight the benefits and limitations of family funding.

Teaching notes are available.

The learning outcomes are as follows: decision-making in the areas of business plan, business strategy, financial management, profit planning and marketing, learning from outer business environment, succession planning for first-generation entrepreneur and choosing appropriate source of financing and drivers for diversification.

Immersed in sipping green tea in his capacious office lounge, the octogenarian Arjun Mehta introspected on the trials and tribulations of his journey as an entrepreneur, the voyage which started four decades ago. From 1976 to 2018, the business has now traversed three generations. Starting with Spice Mart (Sole Proprietor) to Hindware and Lament Construction (partnership firms) to Starlite Homes Pvt. Ltd. (corporate entity), Mr Mehta witnessed transformation and restructuring in organization with every new generation which characterized the evolution of family business. Handholding children to take up the reins of Spice Mart was not a calculated choice. Yet it is remarkable to study the growth in organizational structure of the regional family business. As a self-made entrepreneur, morals, ethics and value system are vital ingredients steering the organic growth story. Third-generation Mehta’s are enterprising, aspiring and visionary. With the incorporation of a corporate entity, they convinced themselves to bring inorganic growth in their business. Arjun Mehta gleamed with pride as Spice Mart partakes an organized structure which had lost prominence with the second-generation entrepreneurs. But he is equally hammered with juxtaposed thoughts. He contemplates whether the integration of retail business with real estate corroborates sustainable innovation. Will independent businesses create the brand’s footprints perpetually? Should the millennial confine business natively or should they grow internationally and become a conglomerate?

The case can be exclusively taught to masters and executive education class of students pursuing entrepreneurship and business management courses. The case will supplement understanding of theories of entrepreneurship and dimensions of family businesses in emerging economies.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 3: Entrepreneurship.