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Free «The Complex Family Enterprise» Essay Sample

The complex family enterprise is one of it kind among family companies. This is a rare occurrence in the United States given that not many family businesses reach this stage. Representing the founders’ ultimate dream, they may be the future of some of the best of the post World War II American firms making transition from controlling Owner to Sibling Partnership. With 63,000 employees and revenue for $47 billion, Cargill is the largest privately owned company in the United States (Kerr and Anderson, 2001). It consists of commodities trading and transport, food processing and production, and agricultural products. The ownership is still in the hands of three family branches led by four cousins from the founder W.W. Cargill. The current C.E.O, Whitney Macmillan; his brother, Cargill MacMillan, Jr; and two cousins, James R. Cargill and W. Duncan MacMillan, have run the business for the last twenty years (Kerr and Anderson, 2001).

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Campbell Soup Company joins the list with revenue of $6billion and 47,000 employees. It’s well known soups control 75 percent of the domestic market with other popular products like Swanson frozen foods, spaghetti among others. The company is run by the Dorrance family who holds 52 percent ownership. The cousin consortium is not only a larger number of individual family owners, but include trusts, holding companies, employee stock ownership plans and publicly traded shares. The increased complexity energizes the relationship among members of all three circles. Opportunities per family member in terms of jobs, dividends, and executive or board positions will be greater (Kerr and Anderson, 2001). More opportunities for family members bring loyalty which keeps the business on its feet and the vice versa is true. If opportunity for family members is going down the business can be reviewed for growth and renewal potential or reduce the complexity of family ownership by pruning the shareholder tree.

Founded in 1836 by Victor Hartwall, Hartwall Group Ltd a $400 million fifth generation brewer and bottler are located in Helsinki, Finland. It is jointly owned by thirty six family members with Erik Hartwall being the CEO. The group in turn owns bottlers and brewers in Finland and Latvia alongside machinery holding company. The principle products are several brands of beer for domestic and export sale, coca cola and Schweppes products, variety of soft drinks and bottled waters. They employ about 2,500 people. At first the company was a family affair but later included non family members as required by Finnish law (Kerr and Anderson, 2001). This has distributed the ownership and improved on management. Members of the family must have a university degree to secure employment. The company has continued growing for the last five years. In one of the meeting the family instituted a representative family council. It meets quarterly to discuss on issues facing the business. The long stay has made the family to learn from their mistakes. The family is largely based in Helsinki enabling them to meet frequently (Kerr and Anderson, 2001).

But size and maturity, like all organizational characteristics have potential disadvantages. Such businesses often run risk of losing sight of two business basics they probably understood well in their earlier stages: strategic focus and market-smart innovation. Companies can see their success as inevitable, rather than fragile, and stop listening to customers. They can close their eyes to current and potential competition and stop keeping up with technology. This turn inward generally spells trouble and sometimes disastrous. Companies can stop innovating in ways the market appreciates and experiment with new products and services that are far from their core competencies. This loss of market focus and innovation can generally be traced to hubris on the part of leaders and to the rigidity and lack of responsiveness of a larger organization (Kerr and Anderson, 2001). Keeping a business culture open and innovative is constantly challenging at any stage, but particularly when the company has been successful. To elaborate on this lets look at Gap company.

 
 
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Gap company was established in 1969 and deals with clothes especially of all classes of people. It boasts of many branches in many countries and has become among the largest companies in the world (Kerr & Anderson 2001). It currently has 3000 operating stores and has over 134, 000 employees. Its main goal is to act in a socially responsible manner to the whole community. This social responsibility has improved the company’s image and has contributed to the success of the company’s image alongside its operation in terms of efficiency, productivity, agreement in part of employees and the profitability level (Iyer 2006).

The company has faced many problems as it has been accused of polluting the environment. It is said to be polluting air and water, by carelessly dumping industrial chemicals to the rivers which are the same rivers where people collect water for domestic use; this could cause dangerous disease to the people using the same water (Iyer 2006). At first, the company thought because of its size and being in the business for long this was a small challenge but this was not the case, this had affected the company negatively in its sales. Its image was perceived negatively by entire customers and other stakeholders (Iyer 2006).

In order to bring back the image of the company, the company participated in eradication of AIDs as part of their corporate responsibility. The company has involved in this project so that they could make a difference and commit themselves in the issue of corporate responsibility. For them to perfect in this they had to employ competent employees so that they can offer quality services. This to some extent helped in building trust again to their customers and stakeholders.

Since 90s something has been terribly wrong with this company. They no longer listen to customers any more. The taste of the customer keeps on changing everyday alongside their income. They stopped making clothes which the average common people can afford (Kerr & Anderson 2001). In addition most of their outlets were closed down or they simply offered poor services. This could probably be attributed to its large size. The quality of their products went down besides being expensive. The company had started to go down and was facing collapse (Kerr & Anderson 2001). Its middle market has completely gone underground and people have opted to go elsewhere affecting its sales badly. The management seems to have been exhausted with time. The recent study showed that every year when the markets for retail are going up, the company is drastically going down (Kerr & Anderson 2001).

   

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