Family Business in Mexico: Responses to Human Resource Limitations and Management Succession

Indigenous firms in Mexico, as in most developing countries, take the shape of family businesses. Regardless of size, the most predominant ones are those owned and managed by one or more families or descendent families of the founders. From the point of view of economics and business administration, family business is considered to have variety of limitations when it seeks to grow. One of the serious limitations is concerning human resource, which is revealed at the time of management succession. Big family businesses in Mexico deal with human resource limitations adopting measures such as the education and training of the successors, the establishment of management structure that makes control by the owner family possible and divisions of roles among the owner family members, and between the owner family members and the salaried managers. Institutionalization is a strategy that considerable number of family businesses have adopted in order to undergo the succession process without committing serious errors. Institutionalization is observed in such aspects as the establishment of the requisite condition to be met by the candidate of future successor and the screening by an institution which is independent of the owner family. At present these measures allow for the continuation of family businesses in an extremely competitive environment.

Executive Managers in Large Mexican Family Businesses

The involvement of members of owners' families in the running of large family businesses in Mexico is decreasing. Although family members still hold key posts such as that of CEO, other executive posts tend to be delegated to professional salaried managers. Top managers, including family members, share some common characteristics. They are young compared with managers in other developed countries, their quality as human resources is high, and many of them are graduates of overseas MBA courses. Most of them are sufficiently experienced. Improvement of quality among top managers is a recent phenomenon in Mexico, and has been encouraged mainly by the following two factors. First, globalization of business activities was promoted by intense competition among firms under conditions of market liberalization. In order to equip themselves with the ability to cope with the globalization of their operations, large family businesses tried hard to improve the quality of top management, by training and educating existing managers, and/or by recruiting managers in the outside labor market. Second, developments in the Mexican economy during the 1990s led to a growth in the labor market for top managers Thus, business restructuring caused by bankruptcy, as well as mergers and acquisitions, privatization and so on, led to the dismissal of business managers who then entered the labor market in large numbers. The increasing presence of these managers in the labor market helped family businesses to recruit well-qualified senior executives.

Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003

This paper attempts to identify a pathway out of poverty over generations in the rural Philippines, based on long-term panel data spanning for nearly a quarter of a century. Specifically, it sequentially examines the determinants of schooling, subsequent occupational choices, and current non-farm earnings for the same individuals. We found that an initial rise in parental income, brought about by the land reform and the Green Revolution, among other things, improves the schooling of children, which later allows them to obtain remunerative non-farm jobs. These results suggest that the increased agricultural income, improved human capital through schooling and the development of non-farm sectors are the keys to reducing poverty in the long run. It must be also pointed out that the recent development of the rural non-farm sector offers ample employment opportunities for the less educated, which also significantly contributed to the poverty reduction.

Where does Philippine education go? : the "K to 12" program and reform of Philippine basic education

In 2012 the Philippines launched its "K to 12" Program, a comprehensive reform of its basic education. Through this reform, the Philippines is catching up with global standards in secondary education and is attaching a high value to kindergarten. The structure, curricula, and philosophy of the education system are undergoing reform and improvement. The key points of the new policy are "preparation" for higher education, "eligibility" for entering domestic and overseas higher educational institutions, and immediate "employability" on graduating, all leading toward a "holistically developed Filipino". This policy appears admirable and timely, but it faces some pedagogical and socioeconomic problems. The author wants to point out in particular that the policy needs to address gender problems and should be combined with demand-side approaches in order to promote poverty alleviation and human development in the Philippines.

Skill sorting and production chains : evidence from India

This study proposes a new mechanism that explains skill-sorting patterns and skill wage differentials across industries based on the length of the industry's production chain. A simple simultaneous production model shows that when the quality of intermediate inputs deteriorates rapidly along the production chains, high-skilled individuals choose to work in industries with shorter production chains because of higher returns to skill. I empirically confirm this skill-sorting pattern and these inter-industry skill wage differentials in India, where the quality of intermediate inputs is likely to degrade rapidly because of the high number of unskilled laborers, poor infrastructure, and less-advantaged technology. The results remain robust even when considering selection bias, alternative reasons for inter-industry skill wage differentials, and a different period. The results of this study have important implications when considering countries' industrial development patterns.

Delegation to workers across countries and industries : social capital and coordination needs matter

The degree of delegating authority to non-managerial and non-supervisory workers substantially varies across countries and industries. By examining worker-level data from 14 countries, I empirically explain this variation by region-specific social capital that proxies workers' degree of self-centeredness and the industry-specific need for coordination. The empirical results of this study confirm the theoretical predictions by Alonso et al. (2008) for the first time: the negative association between coordination needs and decentralization is mitigated in regions with lower self-centeredness of workers. In particular, when self-centeredness of workers (respectively, need for coordination) is very low, the degree of delegation is always high regardless of the level of the need for coordination (self-centeredness of workers). Positive associations between delegation and its benefits, including job satisfaction, wages (proxy for higher productivity), and skill upgrading of workers, are also found. These results imply that people's degree of self-centeredness affects a country's economic development patterns by changing the degree of decentralization and its benefits.