BUSINESS_CASE_PROPOSAL_ENG

1. in the family owned
businesses
A professional management
is the key of confronting
the future successfully!
CULTIVATING
SUCCESS
walter rossi
FEBRUARY 2015
BUSINESS CASE

2. want to talk about “The History of a
Business Success”, and thereby regain the
“Family Tradition and Memory” of my grandfather
Antonio O. Mallo who was an entrepreneur, poet,
composer, musician, painter and, above all, an
honest and friendly person with social values.
I also want to express my gratitude to my
grandmother Ángela Rosa Magrane Mallo who
will be 90 years of age. An early Sunday morning
she contacted me with a certain degree of
concern and asked me to visit her.
Her intention was to speak about the family
situation and to give me a series of souvenirs
which are traditional memories.
In appreciation of them, I wrote “The case of
business success”:
I hope this is useful for businesses and families in
similar situations.
I
how to cultivate success
in the family owned
businesses through
professional management
is the key of confronting
the future successfully.
Treating the business
as a business,
and the family as
a family is the basic
rule for maintaining
balance in the
Family Business.
josep tapies.
iese business school
Key words
Business Strategy and General Management,Change,Innovations,Creativity,Corporate Governance,Directors Consortium,Value Creation,Excecutive Coaching
Services,Turnaround and Restructuring,Change Management,Business Development,Business Performance Improvement,Corporate social responsibility,
Leadership,Merger & Acquisition,Strategic Alignment to the brand PSA Peugeot-Citroën Argentina,Financial Services,Accounting and Financial Close,System
Information and Technology,Business Best Practices,Audit,Business Process Management,Human Capital Management,Executive Search,Project
Management Institute,Scrum Methodology,Lean Management,Balanced Scorecard & Business Intelligence,SAP ERP,SAP Financials,SAP Controlling,Talent
Management,Corporate Social Responsibility,YOGA,Mindfulness,Meditation,ESADE Business School,INSEAD Business School,LA SALLE Business School.

3. bout 90% of the Family Businesses are
not handed down to the third
generation. Most of the failures arise from family
problems and a lack of professional development
to make decisions.
According to the study of the international
consultancy by Price Waterhouse Coopers, eight
out of ten Family Businesses, which are inherited
by their descendants have failed, while nine out
of ten Family Businesses do not succeed to the
third generation.
According to Alicia Mullen in her study on “Family
Businesses in Argentina” of the National
University ‘Lomas de Zamora’, the greater
difficulties that Family Businesses have to face at
some point in their lives are:
A
“Perform the task you
have in front of you”.
When you are
prepared to carry
out another task of
greater effort, you
will be offered an
equal opportunity.
bhagavad-guitá
excessive rigidity
autocratic style
value the experience rather
than the capacity
delegation of the leader’s
responsibility
obsolete concepts and rules
of management
The business of the first generation and the
successors, tend to have an idealized vision of it, but
the second generation and those who follow are
different, because, in most of the cases, they require
the consensus of several relatives or partners.
The most controversial issue arises from dual
relationships such as, husband-wife, partner-father,
boss-daughter in law and so on. Although in some
cases, these problems tend to be minimized or ignored.

4. “It is not the
strongest of the
species that
survives, nor the
most intelligent.
It is the one that
is most adaptable
to change”.
charles darwin
oday there is an extensive bibliography about
this topic and the professional experts in this
field. In many cases, however, these businesses are
reluctant to ask for help. Many people aren’t even
capable of recognizing the problem in time.
So, the very essence which defined a Family Business,
such as, its Mission, Vision, Values, Business Strategy,
Management Team, Level of Professionalism and the
factors which had been the key for success in the past,
are today the main source of obstacles and limitations.
As if it were a paradox, a Family Business can be
caught in its own “Dilemma”.:
T
“will the company
be capable of adapting
itself to change
or will it take the risk
of failing in the
attempt to survive ?”

5. A turnover of 54 billion euros
2.8 million vehicles sold worldwide
42 % of vehicles sold outside Europe
Presence in 160 countries
2nd European builder with
11.9 % of market share
European leader of commercial and
light vehicles with 20.7 % of market share
195 thousand of co-workers worldwide
world general
data (2013)
psa peugeot-citroën with this data it is
difficult to imagine
that a professional
business is probably
not the most
appropriate.
how much could
a small mistake
cost for a
business which
turns over 54
billion euros?
“It’s not
about never
making
mistakes,
but never
making the
same mistake
twice.”
anonymous

6. he problems that face these businesses
are more complex to solve every day. In
these situations a small mistake can lead to a
significant cost.
Another important problem to consider is
the“time” factor which is associated to the
realization of any project.
According to Professor Jordi Brunat of the
Department of General Management and
Business Strategy of ESADE Business School, the
average planning for a project of a new vehicle is
six years.
This situation means that, in many cases the past
mistakes do not have to be corrected in the
present. So therefore, the key after all is not to
repeat them.
T That is to say “do not make any
mistakes”.
Finally, in these cases a “professional
managemen” es sinónimo de menor
cantidad de errores.
is a synonym of the least amount of mistakes.
If this is the appropriate formula of
management, then why should it be different
in the Case of Family Businesses?
In the Spanish Economies, the property tax
of the Family Business to the Gross Domestic
Product is about 70% and provides
approximately 75% of jobs.
Considering this data, it seems that the
pending issue for any“family
business” would be this one.

7. he solutions are as diverse as the
Business. A first point to find any
solution is to recognize that there is a problem.
Because of the described factors, many
businesses do not recognize the problem, which
results in a ‘death sentence’ and leaves
important businesses facing the fact of failure.
Some points to consider, when it comes to
undertaking a Process of Professionalization of
the Family Business, are::
recognize the problem
consult professional
experts’ opinion
have a clear criteria: business /
family, family / business
solve conflicts based on the
T
dialogue with communication and
willingness
Even when the solutions are different in each case,
in general, the Family Business, which needs to
undertake a Process of Professionalization, has
necessities in different practices, which are:
business strategy and general
management
change, innovations, creativity
corporate governance, directors
consortium
value creation
executive coaching services
turnaround and restructuring
change management
business development
business performance improvement
leadership
merger Acquisition
strategic alignment
Today, more than
ever, a “Family
Business” has
to assume the
commitment of
professionalizing
the management
as a way of
ensuring the
future success.
the question is,
where do we start?

8. financial services
accounting
system information and
technology
business best practices
audit
business process management
human capital management
executive search
project management institute
scrum methodology
lean management
balanced scorecard business
intelligence
SAP ERP
SAP financials
SAP controlling
talent management
corporate social responsibility
As we mentioned previously, this is not an
exhaustive list, which varies in every case
according to the professionals’ diagnosis. The
fact is that most of them have defects and
necessities in this management concepts.
In general, a Family Business that undertakes a
Process of Professionalization, should also
undertake a Process of Reflection, which leads it to
analyse its strengths and opportunities as well as
weaknesses and threats, in:
general management
financial and accounting
management
marketing management
people and teams management
operations
organizational development
decision makin
information technology
business strategy
leadership

9. “When you
climb up a high
mountain, you
will see a myriad
of mountains,
which you need
to climb up again”
nelson mandela
Process of Reflection and
Organizational Change is often a slow
process, back and forth, with long meetings,
and in some cases, a high dose of stress where
the Family and Business limits are vague.
In several cases the problems which are
postponed throughout the years, regarding
Family as well as Business, should be managed
in this process.
According to Professor Francisco Loscos who is
associated to the Managing People
Department and Organization of ESADE
Business School, the average time for an
Organizational Change in these areas is around
six years.
During that period, a series of situations should
be managed, in which it will be necessary to
renew the “Spirit and Sense” for which the
project was set up. Otherwise there is a risk of
losing the sense of work and spirit that the
founders have inspired in that Business.
The key for managing this process is centred on
“leadership”.
The “leadership” might be a hard task but it’s
very rewarding.
The Stress is part of our lives and essential for our
survival and adaptation, but when it becomes
chronic, it can affect our welfare.
As the Organization grows, so will the
responsibilities, functions and roles of the Leaders,
and thus, the Stress level will naturally increase.
Undertaking a Process of Change, where
Professionalization of the Family Business
Management is the key for survival, includes
additional difficulties to manage.
A

10. There are a number of practices that we
recommend so as to improve the Labour
Atmosphere Management and the Stress.
According to Richar E. Boyatzis Professor in
Departments of Organizational Behavior,
Psychology, and Cognitive Science at Case
Western Reserve University, the stress level can
be determined by evaluating the fulfilled
activities of the previous week.
If the stress level increases it is impossible to
remember everything that has happened at
that moment.
positive renovation
There are several techniques to help the
Leadership practice and therefore, in the
suggested Organizational Change.
We recommend to evaluate:
yoga
meditation
mindfulness
taichi
The practice and promotion of certain activities
contribute to a greater productivity and better
relationships:
sports
collaborative work
joy
passion
sympathy
excitement
hope
professionalism
dialogue
leadership

11. “We work on
ourselves in
order to help
others, but also
we help others
in order to work
on ourselves.”
pema chödron
Process of Professionalization of the
Family Business Management is an
internal process. So we must not forget that a
Business has a social sense, which goes further
than the economic purposes.
In several cases, the complexity of this process
makes us forget these issues which constitute
the very essence of the Business.
The Corporate Social Responsibility is the
function of Businesses, which enables all of
them to contribute to the Growth of Society
and Community Development.
A
don’t forget
that there
are more people
outside who
need your help!

12. Bachelor in Business
Administration (BBA)
Master in Information Systems SAP
LA SALLE Business School
Program for
Management Development®
ESADE Business School
Blue Ocean Stratregy
INSEAD Business School
® Walter Rossi 2015 walter.rossi@alumni.esade.edu
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