Garland, since 1776- a unique ownership structure

The case is based on Garland, a 240 years old Portuguese family business, now owned by the Dawson family. It focuses on a decision made 50 years ago, aligned with what had been the company’s history, about the ownership rules for family members, which influences the ownership structure of the firm. It addresses the main issues about ownership in family businesses, and tackles the problem of succession planning and fair process. It contains a teaching note to support the utilization of the case in a classroom context, with learning objectives, target audience, a teaching plan, questions and proposed answers, and theory that relates to the case. It is also complemented with an epilogue and an overview of the case.

Clendenan-Thompson family fonds

Daniel Clendenan (1793-1866) was the son of Abraham Clendenan, a private in Butler’s Rangers. He was married to Susan[na] [Albrecht ] Albright, daughter of Amos Albright. Daniel and Susan[na] had twelve children and belonged to the Disciple Church. In 1826 Daniel Clendenan purchased Part lot 14, Concession 6, Louth Township from Robert Roberts Loring. On this property he built a home and conducted the business of blacksmithing and along with William Jones operated a lumber mill. Volume 1 and the first part of Volume 2 are Daniel Clendenan’s account books. Daniel and his wife Susan are buried in the Vineland Mennonite cemetery. Daniel and Susan[na]’s youngest daughter, Sarah, married widower Andrew Thompson (1825-1901), son of Charles and grandson of Solomon. Andrew Thompson had settled in the Wainfleet area in 1854 and had owned a mill in Wellandport. Daniel Clendenan, in ill health, passed ownership of Lot 14, Concession 6, Louth Township to his son-in-law Andrew Thompson. Robert Roberts Loring, the original owner of lot 14, concession 6 in Louth was born in September of 1789 in England. He joined the 49th Regiment of Foot as an ensign in December of 1804 and arrived in Quebec the following July. He served with Isaac Brock and Roger Sheaffe. In 1806 he was promoted to lieutenant. Loring was hired by Lieutenant General Gordon Drummond and accompanied him to Ireland in 1811, but the outbreak of war in the States in 1812 drew Loring back to Canada. On June 26, 1812 Loring became a captain in the 104th Regiment of Foot. On October 29 of the same year, he was appointed aide-de-camp to Sheaffe who was the administrator of Upper Canada. During the American attack on York in April 1813, Loring suffered an injury to his right arm from which he never recovered. In December of 1813, Drummond assumed command of the forces in Upper Canada and he appointed Loring as his aide-de-camp, later civil secretary and eventually his personal secretary. Loring was with Drummond in 1813 at the capture of Fort Niagara (near Youngstown), N.Y. He was also with Drummond in the attacks on Fort Niagara, settlements along the American side of the Niagara River, and then York and Kingston. In July of 1814 he was promoted to brevet major, however he was captured at the Battle of Lundy’s Lane and he spent the remainder of the conflict in Cheshire, Massachusetts. One of his fellow captives was William Hamilton Merritt. Loring remained in the army and had numerous military posts in Canada and England. He retired in 1839 and lived the last of his years in Toronto. He died on April 1, 1848. Sources: http://www.biographi.ca/en/bio/loring_robert_roberts_7E.html and “Loring, Robert Roberts” by Robert Malcomson in The Encyclopedia Of the War Of 1812 edited by Spencer Tucker, James R. Arnold, Roberta Wiener, Paul G. Pierpaoli, John C. Fredriksen

Dynamic capabilities in a sixth generation family firm: entrepreneurship and the Bibby Line

In this paper we draw on the theory of dynamic capabilities to examine development of the only surviving family-owned Liverpool shipping company. The Bibby Line was founded in 1807 to take advantage of the growing sea-trade based in Liverpool. The company remained in shipping until the mid-1960s, when a series of external crises led the owner, Derek Bibby, to begin a process of diversification. In the last 50 years, the Bibby Line has grown into a £1bn business with interests in retail, distribution and financial services as well as a continuing commitment to shipping. Our intention is to demonstrate how multigenerational ownership contributes to the creation of dynamic capabilities in family firms. The distinctive nature of Bibby as a long-standing family business is related to unique assets such as patient capital, flexible governance structures as well as the ability to mobilise social and human capital.

Generational and cultural indicators of technology and innovation in family business

The internet revolution has affected everybody in some way. Technologies used in business range from telephones to industry-specific machinery. Mostly though, business technology has come to mean the internet. In literature concerning innovation and the adoption of technology in business, research invariably centres on small to medium businesses (SI'v1Es), as these can be defined reasonably easily. Statistics on family businesses are limited, however, because family businesses are so difficult to categorize and define.

The Australian Family Business Survey of 1993 (Institute of Chartered Accountants) determined that family business is the largest form of business ownership in Australia and represents 83% of all business enterprises, although Basu (2004) believes that over two thirds of all world-wide businesses are owned or managed by families and around half of all businesses in Australia are family businesses. The Australian Institute of Management (AIM) (2004) states that the wealth of family and private businesses is estimated at $3.6 trillion and that family firms generate 50 per cent of Australia's employment growth, account for 40 per cent of Australia's private sector output, and are a seed bed for innovation and the information of large companies.

The difficulty in defining a family business is heightened because family businesses can take many forms ranging from sole traders to private companies to public companies. Hence, when talking about family business, you could be referring to the sole trader dealing with organic produce to an IT organisation employing hundreds of staff. Basu (2004) thinks that while ordinarily, in non-family businesses, the business and family domains remain separate, the key distinctive characteristic of family businesses is that family members work together for economic purposes. In other words, the family is not merely a social unit but also an economic unit. Craig and Lindsay (2002) believe that family involvement in the business is what makes the family business different... researchers, however, cannot seem to agree as to what constitutes 'family involvement' in a business so that it can be defined as a family business and that family business is ... a business that is governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition that is controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.

Is dog ownership or dog walking associated with weight status in children and their parents?

Issue addressed: Several studies have shown that dog owners do more physical activity than non-owners; however, associations with weight status are unknown. This study examined associations between dog ownership, frequency of dog walking and weight status among children and their parents. Methods: Height and weight were measured for 281 children aged 5-6 years and 864 children aged 10-12 years. One parent reported their own and their partner's height and weight (n=1,108), dog ownership, usual frequency their child walks a dog, and usual frequency of walking the dog as a family. Logistic regression analyses were adjusted for sex (children only), physical activity, education, neighbourhood SES, parental weight status (children only) and clustering by school. Results: Dog ownership ranged from 45-57% in the two age groups. Nearly one in four 5-6 year-olds and 37% of 10-12 year- olds walked a dog at least once/week. Weekly dog walking as a family was reported by 24-28% of respondents. The odds of being overweight or obese were lower among younger children who owned a dog (OR=0.5, 95% CI 0.3-0.8) and higher among mothers whose family walked the dog together (OR--1.3, 95% CI 1.0-1.7). Conclusions: Dog ownership may offer some protection from overweight among young children. It is important that families with a dog are encouraged to walk or play with it regularly. Associations with weight status may depend on the type of dog owned, length of ownership and the nature of walks or interaction.

The employee share ownership plan : data and implications for Australian businesses

The Australian government is currently committed to the goal of increasing organisational participation in employee share ownership plans (ESOP) from 4% of all companies to 11% by 2009. The Nelson Report into ESOPs commissioned by the Honourable Brendan Nelson highlighted the lack of comprehensive information on the nature and extent of ESO plans in Australia. This paper places the program in context by reviewing overseas experiences and considers the viewpoints of both employers and employees. The preliminary investigation concludes by highlighting the need for further thorough research before success for all types of businesses can be confidently predicted.

The influence of cultural attributes on intergenerational succession in the Chinese-Australian family business

Research on succession in family business has been traditionally concentrated on planning and strategies in terms of management, ownership and governance. There is an increasing concern on the family influence on the process of succession. This paper discusses the role that the family culture plays in sustaining a family's commitment to its business. In particular, the family business is a prominent form of organisation among the ethnic Chinese expatriate business families. Since the I 980s, under the business migration programme, the increase of Chinese migrants has contributed significantly to the cultural landscape of Australian. This paper chooses Chinese-Australian family businesses to explore their cultural characteristics as a strong family influence on the practices of pas sing on the business to the next generation.

Dog ownership, dog walking and children's and parents' physical activity

This study aimed to determine cross-sectional associations of dog ownership, dog walking, and physical activity (PA) among children and their parents. Objective measures of PA were obtained for children ages 5-6 and 10-12 years from 19 primary schools across Melbourne, Australia. Parents self-reported their PA, dog ownership, and frequency of dog walking: 53% of families owned a dog, 41% of children who owned a dog did not walk their dog at all, and 32% reported never or rarely walking their dog as a family. Dog ownership was associated with an additional 29 min/day in PA among younger girls, and 70 and 59 min/week more in PA among mothers of younger boys and older girls, respectively. Among mothers of older girls, dog owners were 1.6 times as likely to meet PA guidelines. Mothers with older boys and girls, and fathers with younger boys, who reported walking the dog regularly as a family, spent more time in PA (105, 90, and 158 more min/week, respectively). Promoting dog ownership and dog walking among children and as a family are potential strategies for increasing PA participation in some families.

The value of local partners in Brazil: the effects of ownership clusters and business group membership on firm value in emerging markets

Este estudo analisa como a classe de acionistas afeta o valor das empresas brasileiras listadas na bolsa de valores no ponto de vista da governança corporativa. O trabalho examina a interação entre o valor das empresas e cinco tipos de concentrações acionárias comumente presente em mercados emergentes: famílias, agentes públicos, investidores estrangeiros, executivos e investidores financeiros nacionais. A análise empírica demonstra que o mix e a concentração de participação acionária afeta significativamente o valor das empresas. Utilizando uma compilação única de dados em painel de 2004 a 2008, a presente pesquisa também desenvolve hipóteses sobre o efeito da participação em grupos econômicos para o valor das empresas. A investigação encontra evidências de que, apesar de sua importância para o desenvolvimento de empresas brasileiras, o capital familiar, instituições públicas, e investidores estrangeiros estão cedendo lugar a monitores mais especializados e menos concentrados, como executivos e instituições financeiras nacionais. Estes resultados indicam que a governança corporativa no Brasil pode estar alcançando níveis de maturidade mais elevados. Adicionalmente, apesar de não haver indicação da existência de correlação entre a participação em grupos econômicos e o valor das empresas, os resultados indicam que a presença de um tipo específico de acionista em uma empresa do grupo facilita investimentos futuros desta classe de acionista em outras empresas do mesmo grupo, sinalizando que os interesses acionários são provavelmente perpetuados dentro de uma mesma rede de empresas. Finalmente, a pesquisa demonstra que enquanto o capital familiar prefere investir em empresas com ativa mobilidade do capital, investidores internacionais e instituições públicas procuram investimentos em equity com menor mobilidade de capital, o que lhes garante mais transparência com relação ao uso dos recursos e fundos das empresas.

Valuation and performance of firms in complex ownership structures : an application to Korean chaebols

We propose several new metrics to describe the complex ownership structure of business groups, and provide simple formulas and algorithms to compute these metrics. We use these measures to describe in detail the ownership structure of Korean chaebols in the period of 2003 to 2004. In addition, we validate the usefulness of our new metrics by showing empirically that they are important for understanding the valuation and performance of group firms. In particular, we show evidence that firms that are central to the control structure of the chaebol (central firms), firms in cross-shareholdings, and firms that are placed at the bottom of the group (i.e., with lower ultimate ownership) have lower profitability than other group firms. The valuation results suggest that central firms and firms in cross-shareholding loops have lower valuations than other public Chaebol firms. The lower valuation of these firms is not explained by variation in measures of ownership concentration and separation between ownership and control.

Corporate governance development in privately held family businesses: a multiple case analysis

The objective of this study is to better understand and illustrate the process and the motivations for corporate governance implementation in Brazilian privately held family businesses. Three case companies were analyzed through an adapted developmental framework to illustrate the progression in corporate governance in response to changes in the ownership, investment and management dimensions over time. In this development, causal relationships between corporate governance and the three other framework dimensions were identified. It was found that the analyzed companies´ corporate governance implementation was motivated by the need to curb agency costs, whereas a cornerstone in this development was the first generational change. Only after the family businesses have reached the necessary maturity on all three dimensions, corporate governance practices were implemented. Put simply, the analyzed case companies developed formal systems as they grew more complex. This study complements the academic discussions on corporate governance in family businesses by offering Brazilian evidence on its underlying motivations and sequential implementation over time.

What Makes a Family Firm Innovative? CEO Risk-Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk-oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation-related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium-sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk-taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium-sized family firms operating in manufacturing industries, the results show that CEO risk-taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk-taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk-taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk-taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm-specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.

Executive Managers in Peru's Family Businesses

As in many other developing countries, family businesses are major players in the Peruvian economy. Despite their growth into large-scale groups spanning a wide range of businesses, the owner families still have strong control over their ownership and management. However, Peru's liberal economic reforms in the 1990s brought intense competition into the national market. Not only have these family businesses been forced to compete against large-scale foreign capital that entered the national market through the privatization of state enterprises, but also against cheap goods imported from foreign countries. In order to compete, family businesses have had to move beyond the limited human resources available within the family. The advancement within owner families of new generations with better education and training together with the promotion to top managerial positions of professional salaried managers from outside the family are some of the measures owner families are taking to overcome their human resource limitations.

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.

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.