Family Business in Argentina: Current Issues GOMEZ FAMILY ELEONORA COSTI SHALOO AGGARWAL KARAN RANKA SOFIA GROSS
KEY LEARNING POINTS <ul><li>1)Importance of PALT in family business. </li></ul><ul><li>2)Family CEOs less likely to be rem...
P A L T
INTRODUCTION <ul><li>Gomez family: </li></ul><ul><li>Immigrants from Galacia, Spain (1997) </li></ul><ul><li>Three brother...
Second generation <ul><li>Jose: </li></ul><ul><li>Sixth son of Manuel. </li></ul><ul><li>Business thrived due to strong sm...
Third generation <ul><li>Osvaldo: </li></ul><ul><li>300 small shops for distribution, over 300 families working for him. <...
Reluctance of choosing non family CEO FOURTH GENERATION <ul><li>Onofria (wife) </li></ul><ul><li>inherited assets, soon so...
Fifth generation <ul><li>Alberto: </li></ul><ul><li>Works in the company, does not assume leadership </li></ul><ul><li>Fer...
Factors for success until 4 th  generation <ul><li>Respect for suppliers/clients, adherence to ethical norms. </li></ul><u...
Reasons for failure of firm <ul><li>PYSCHOLOGICAL ASPECTS:  LEGAL/LEGISLATIVE: </li></ul><ul><li>-Resistance to change  - ...
THANK YOU FOR YOUR ATTENTION!!
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Famiyl Business Gomez

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Famiyl Business Gomez

  1. 1. Family Business in Argentina: Current Issues GOMEZ FAMILY ELEONORA COSTI SHALOO AGGARWAL KARAN RANKA SOFIA GROSS
  2. 2. KEY LEARNING POINTS <ul><li>1)Importance of PALT in family business. </li></ul><ul><li>2)Family CEOs less likely to be removed from their position following poor performance than non-family CEOs. </li></ul><ul><li>3)Stock prices react positively on announcement of family CEO replaced by non family CEO. </li></ul><ul><li>4)Growth in sales and employment following family CEOs leaving. </li></ul><ul><li>5)Cash flows for shareholders increase when CEO is a non family member. </li></ul>
  3. 3. P A L T
  4. 4. INTRODUCTION <ul><li>Gomez family: </li></ul><ul><li>Immigrants from Galacia, Spain (1997) </li></ul><ul><li>Three brothers </li></ul><ul><li>Manuel founded the tobacco business. </li></ul><ul><li>Male children receive territory in business, women excluded. </li></ul>
  5. 5. Second generation <ul><li>Jose: </li></ul><ul><li>Sixth son of Manuel. </li></ul><ul><li>Business thrived due to strong smoking habits of the people. </li></ul><ul><li>financial collapse-Portuguese and polish workers preferred a cigarette to a sandwich. </li></ul>
  6. 6. Third generation <ul><li>Osvaldo: </li></ul><ul><li>300 small shops for distribution, over 300 families working for him. </li></ul><ul><li>Died young </li></ul><ul><li>no male heir </li></ul>
  7. 7. Reluctance of choosing non family CEO FOURTH GENERATION <ul><li>Onofria (wife) </li></ul><ul><li>inherited assets, soon sold then. </li></ul><ul><li>Gonzalo (Emilia’s ex-husband) </li></ul><ul><li>Designated as CEO, 10% of the shares </li></ul><ul><li>Rest of the shares equally divided among the sisters. </li></ul><ul><li>American company delegated supervisors to co-manage the firm </li></ul>
  8. 8. Fifth generation <ul><li>Alberto: </li></ul><ul><li>Works in the company, does not assume leadership </li></ul><ul><li>Fernando: </li></ul><ul><li>Lawyer, works in the company part-time. </li></ul>
  9. 9. Factors for success until 4 th generation <ul><li>Respect for suppliers/clients, adherence to ethical norms. </li></ul><ul><li>Respect distribution zones </li></ul><ul><li>Clear cut roles for all family members (males and females). </li></ul><ul><li>Prestige of 100 year old family: </li></ul><ul><li>This often compensates for the family CEO not performing well. He can ride on the reputation of the family firm for a while. </li></ul>
  10. 10. Reasons for failure of firm <ul><li>PYSCHOLOGICAL ASPECTS: LEGAL/LEGISLATIVE: </li></ul><ul><li>-Resistance to change - only male heirs entitled to </li></ul><ul><li>-No communication territory in the company share </li></ul><ul><li>-unclear job roles - international restrictions on </li></ul><ul><li>-no succession plan tobacco advertising and smoking </li></ul><ul><li>-remuneration unrelated to output in public places </li></ul><ul><li>ADMINISTRATIVE/ TECHNOLOGICAL: </li></ul><ul><li>ACCOUNTING: -need to be pro-active rather than </li></ul><ul><li>-inadequate CEO reactive to change in market. </li></ul><ul><li>-inefficient administration - </li></ul><ul><li>As leaders not qualified </li></ul><ul><li>- Lack of business plan </li></ul>
  11. 11. THANK YOU FOR YOUR ATTENTION!!

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