In January 2018, a family business advising team entered a seemingly straightforward contract with members of the Graham family, who were planning to transition their business to the next generation. The first and second generations, who founded and grew their business into a portfolio of 50 grocery store franchises across the eastern United States, were concerned about the capacity and interest of the next generation in continuing the success of the family business. None of the five cousins in this new generation had experience pertaining to the family business, and there was uncertainty about the structural changes inherent in the transition.<br><br>At first glance, the problem appeared to be about transition planning, but the advising team soon learned that transition was only the surface issue. The advising process uncovered a very dysfunctional family with deeper concerns. Communication problems, borne from the culture of conflict avoidance that typified the second generation’s upbringing, needed to be addressed before the family could face any transition planning with confidence. <br><br> This case is intended to be used with Advising the Family Firm: Opening Pandora's Box (B), 9B18M048. Advising the Family Firm: Opening Pandora's Box (A) should be assigned prior to class. Advising the Family Firm: Opening Pandora's Box (B) should be distributed in class following discussion of the (A) case.
This supplementary case set follows a family business advisory team over the course of roughly three months, as they develop an action plan to guide the succession of the family business to the next generation. The cases elucidate the harm that an inexperienced advising team can unintentionally inflict and cover issues of family firm advising, transition planning, and family dynamics.<br><br>This case is intended to be used with Advising The Family Firm: Opening Pandora's Box (A), 9B18M047. Advising The Family Firm: Opening Pandora's Box (A) should be assigned prior to class. Advising The Family Firm: Opening Pandora's Box (B) should be distributed in class following discussion of the (A) case.
Greg Simpson was the chief executive officer of Simpson Seeds Inc. (SSI). He and his two brothers, second-generation owners of a family farm, had started the seed company. From humble beginnings in Moose Jaw, SSI had grown to be the largest privately owned lentil exporter and seed retailer in Saskatchewan, Canada, distributing pulses to nearly 80 countries worldwide. Simpson and his brothers had recently added a new red lentil–splitting plant to the family business; however, the new plant required leadership. The brothers were also considering how to continue the family legacy. Transitioning management and leadership of SSI would not be easy. Five of nine cousins from the third generation worked at SSI. Would the new plant be the ideal launching pad for the third generation, allowing them to learn how to lead and manage a segment of the family business? Simpson and his brothers were scheduled to meet on Monday, when Simpson was to deliver a proposal for succession planning.
It was the summer of 2015 when the son of a family-owned real estate business in Vancouver was struck by love and decided to follow his heart to India. However, leaving his family’s business was easier said than done. The family had no formal documents that provided members with an exit strategy or remuneration. There were no wills or financial plans, and whatever money was available to finance a move abroad was tied up in the family business, which was operating at a loss. At stake was the pending sale of a commercial property that could inject nearly $3 million into the family’s coffers. Before leaving, which short- and long-term issues needed to be addressed to ensure the business and the family estate were prepared for the future? How should the family move forward when faced with the realization that the children might not be interested in taking over the business?
For over five years, the third generation (G3) of Valley Pulp & Sawdust Carriers, Ltd.<br>had been laying the foundation for the professionalization of the family firm. However, it was met with resistance from the second generation (G2). G3 had no ownership in the family business, and no true leadership role. At the management meetings, only four votes counted—the four votes of G2 members who were shareholders of the business. G3 members needed a commitment and clarification regarding their roles and future in the company. The question was how to approach G2. The G3 cousins knew that the challenge for them to garner G2’s respect and to have G2 understand G3’s roles and contribution to the family business would be nothing short of daunting.<br><br>This case series also includes Valley Carriers (B): Working on Versus Working in the Business 9B16M096 and Valley Carriers (C): Restructuring the Governance of the Family Firm 9B16M097.
This is the second case in the Valley Carriers series, which also includes Valley Carriers (A): Establishing Status in a Family Business 9B16M095 and Valley Carriers (C): Restructuring the Governance of the Family Firm 9B16M097.
This is the third case in the Valley Carriers series, which also includes Valley Carriers (A): Establishing Status in a Family Business 9B16M095 and Valley Carriers (B): Working on Versus Working in the Business 9B16M096.
Juchheim Co. Ltd. was a confectionery family firm located in Japan. The chief executive officer and owner faced two important issues related to the future success of the firm: managing succession into the next generation and determining the company’s expansion strategy in the overseas market. Under the Japanese tradition of patriarchal primogeniture, the owner’s eldest son was the heir apparent and would take over the company. However, the market scenario had changed; new demographic and economic conditions had brought challenges that the company had never faced before.
HIGHLY COMMENDED CASE - Family Business Runner-up, 2012 European Foundation for Management Development (EFMD) Case Writing Competition. Scholtes Waterservices was a second-generation family firm in the Netherlands that specialized in installing and selling water pipes, primarily for the horticultural industry. In 2008, Rijk Scholtes Jr. and his brother, Ben, took over management of the firm from their father and gradually assumed ownership through a buyout plan. It soon became evident that their father, Rijk Sr., could not let go of the company. This especially affected Rijk Jr., as he worked in an office close to the place where Rijk Sr. lived. As a result, the relationship between father and son began to steadily deteriorate. Moreover, Rijk Jr. began to feel isolated as the relationship and collaboration between Rijk Sr. and Ben was not adversely affected. Instead, the once-strong relationship between the brothers began to deteriorate. Rijk Jr. was left wondering whether anything could be done to rectify the situation or whether it was time to leave the family firm.
De Kuyper Royal Distillers was a 300-year-old family firm in the Netherlands and produced the largest variety of liqueurs in the world. The firm had always been owned and controlled by the De Kuyper family. In 2009, Bob de Kuyper, the 10th generation to own and run the firm, retired from his position as managing director and an outsider was brought in as the interim managing director. In January 2010, Marc de Kuyper, the eldest son of Bob de Kuyper, worked for an outside firm in a marketing position. He had a strong desire to join the family firm and was trying to decide how to convince his father, and the family firm's supervisory board, that he had the capabilities to eventually take a leadership role in the family business. Was there a future for Marc at the family firm? What could he do, if anything, in the succession process?
Late in the afternoon on January 20, 2006, one of the owners of The Health Nut hung up the phone. Her account manager had just called to tell her that the bank was not going to extend any further credit to her small retail natural health products (NHP) store located in Grand Bend, Ontario. She and her life and business partner had owned The Health Nut since May 2003. While they had successfully grown sales, the business was not generating enough cash to sustain itself and provide the partners with adequate compensation. As a result, the business relied heavily on borrowing from the bank. Now that the bank was no longer a source of financing, the owners had a major problem on their hands. What should they do now? Something was going to have to change. They had about four weeks left before the business ran out of cash. The students will learn: 1. The role of emotion in decision making. 2. The nature and importance of due diligence. 3. When to let go of the business. 4. The importance of having enough working capital. 5. The dangers of over reliance on debt. 6. The challenges of cash flow management.
Ganong Bros. Limited is a fifth generation family chocolate company in New Brunswick that is facing financial difficulties. The firm has been spreading its resources too thinly and needs to develop a plan to not only return to profitability but also to grow the business while upholding its responsibility to the local community. This case helps students to develop an understanding of cutting costs in a turnaround situation and seeking out alternative lines of business for strategic growth.