Reference no: EM133277475

Assignment:

Case Study: Succession story as told by the current family member CEO - Peter Orman

"For the last few years, I've been thinking very seriously about what the next phase of our family business will look like. The next generation isn't ready to take over for a while yet, and we really felt we needed an injection of new blood and a different set of professional skills, insights and experience to help us to the next level. So, I made the decision to hire a President, Mary Listgow from outside.

I talked to our Family Council and of course I talked to my kids. I've heard some horror stories, where a family business had hired people to come in and run the business, but family management wasn't prepared to let go and it turned into a nightmare. That's the last thing we want to get into. I was very careful with the Mary hire.

Supporting the next generation is a key part of Mary's job description. I wanted a mentor for my kids (Gary - 20 and Marilyn - 23) to help them get a broader view of the industry and the global market. I did not teach them how to drive and I don't want to teach them how to manage this business.

I told my kids that if they're going to join the family business, then they have to work as hard as any other employee, and they won't get any favours just because they have the family name. My goal is to make sure the next generation will be good owners, even if someone outside the family has to be the CEO. When I, as the eldest sibling, took over from my dad, I took what he had created and I built on that. I'd like to instill the same sense of responsibility in the next generation. Their job will be to make it bigger and better, more successful. Having the support of a professional CEO at the start of their careers is part of that."

Required: Please make sure that each element has a deep explanation. Each element should be in dept and should have a longer explanation

Review Peter's succession strategy outlined above. Select 2 DIFFERENT ELEMENTS of Peter's succession strategy and discuss how EACH element reflects.

Your submission MUST take the following form.

Identify the element of Peter's succession strategy

EXAMPLE

Identify the - Element x [there will be 2 of these]

Element 1 - Peter's discussion with the Family Council about his hiring a non-family CEO Explain / discuss the element

a) This initiative on Peter's part to consult with the Family Council shows his awareness of the importance and value of sharing plans with the entire family. Since there is a Family Council it is logical to assume that there are other family members who may not be involved in management but would have an interest as stakeholders. This will reduce the possibility of the family members thinking that Peter is not acting in their best interest. Such thinking might damage Peter's trust relationship with his family members.

b) Another benefit of taking this to the Family Council is that there are younger family members who are known to have an interest in succeeding Peter and he wants to make it clear that he envisions the family business as being a meritocracy and not an entitlement environment.

CAUTION

This is not a complete example of depth. But it should get you on the right track in terms of expectations. Obviously, you can't use Peter's taking his plans to the Family Council as one of your Elements.