Governance issues in a family business Essay Example | Topics and Well Written Essays - 750 words

Governance issues in a family business - Essay Example Conflicts can be avoided and resolved if arise because of good governance strategies that govern not only the business but also the family that runs that business. In this paper, I intend to describe a family business I learnt about on the internet and a governance issue related to it. Many small and medium sized family businesses are running in India today that contribute a great percentage of GDP to the country. But most businesses survive only until the third generation and very few pass on to the fourth generation because of generational conflicts and difference of opinions and perspectives between the elders and the youngsters of the coming generations. The family business I learnt about was the Ambani Family of the Reliance Industries Limited (RIL). It is â€Å"the largest private sector enterprise in India, a Fortune 500 company, and one of the largest private sector conglomerates in the world† (Shah). In this business, the family relationships once held very much impor tance in determining the business position of a family member. According to Reliance Industries Limited, Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. Common governance issues that normally arise in Indian family businesses include decision-making being centralized; proxy sons holding control; owner becoming larger than the business; and a lack of strategies. The Ambani family had power, wealth, and control. After the death of Dhirubhai Ambani, his sons Mukesh and Anil split up and the family business broke. The governance issue here was the fights and conflicts between the family members who ran the business. Neither the higher education al degrees nor the experience could save the family squabbles to occur. A dispute over the control of power was the main governance issue that resulted in the splitting of the business. The dispute began with conflicts over roles in July 2002 and continues till the current disagreement over the price of natural gas when the brothers started accusing each other drawing government ministers and other politicians into the battle. Ambani versus Ambani rivalry has made the two brothers lose a big US$1 billion project in a competition to win the Mumbai Trans Harbor Link, and fame of course. Governance issues like this one bring bad name to the organization and are the main cause of splitting up or failure of a business that was running smoothly and earning large profits before the dispute. What we can learn from this particular case is that the family members especially those who are so close to each other like brothers, should make certain family pacts and policies before starting the al liance so that they know what are their limits and what needs to be done in case of a conflict. The family members should most necessarily be able to keep their family relationships and the business relationships apart so that both do not coincide and result into a dispute that is aired by bad family relationships. It is very hard in family businesses for the partners to keep their otherwise relations apart from

Luigi's Family Food Case Study Example | Topics and Well Written Essays - 1000 words

Luigi's Family Food - Case Study Example Luigi’s Family Foods Pizza is also a frozen pizza firm in Chicago which has reputation in the market but recently the firm has encountered a sharp decline in the market sales and share. Marketing director of the company, Reggie Pantazi chalks out some future differentiation strategies which would help the company in reversing the declining trend of their market share and evolve as a leading player in the frozen pizza market. The paper in the initial stage will discuss the major competency of the firm and elucidate the competitive and consumer environment of the firm and then will discuss the pros and cons of the strategies adapted by Reggie. Competencies of the firm, competitive and consumer environment Luigi’s Family Foods is a medium sized company established in Chicago with a diversified portfolio of grocery chains, line of frozen pizza distributed regionally in the Midwest. The firms delivers pizzas with moderate qualities which are mainly available in standard vari eties like all cheese, cheese and pepperoni, and cheese and sausage) with various sizes as 5 inch snack pizza, 10 inch family-size pizza, and a 14 inch deluxe pizza. The company has involved in the marketing of the products through several advertising campaigns but there has been sharp decline in the sales figure of the firm for which many grocers threatened to discontinue the Luigi’s Family Pizza (Luigi’s Family Food Case). Among the chief competitors recently The Pizza Company introduced a new brand, DiGiorno with a crust that rises for the first time when the pizza is baked in the home, thereby providing the same fresh-baked taste as carry-out pizza and thereby creating a competitive edge(Luigi’s Family Food Case).The market for the frozen pizzas have categorized into 4 categories like the regular pizza (e.g. the Tombstone brand), premium pizza (e.g. DiGiorno, commanding a higher price due to the quantity and quality of ingredients and â€Å"eating experienc e†), gourmet pizza (e.g. Wolfgang Puck’s specialty toppings pizzas), and the less expensive â€Å"fill-‘em-up† brands (e.g. private label). Although the traditional toppings are the America’s favorite, but still the specialty toppings have become more popular through companies like Wolfgang Puck Foods. Among the other major competitors are Kraft’s DiGiorno and Schwan’s Freschetta which also possesses solid market shares (Holocomb). Evaluation of the five options as proposed by Reggie Pantazi The marketing manager of the pizza company, Reggie Pantazi sorted out five different policies in mind to accelerate the sales of the company. The policies which were formulated by Pantazi were advertising, extending health line, establishment of premium line, pizza pockets, and establishment of supply food service companies. But for fetching optimized results the company needs to formulate and implement a perfect blend of marketing mix policies. Mar keting concept and marketing Mix policy The marketing concept plays a predominant role in chalking out the best decision that the firm must adapt in order to maximize its profit motives subject to the budget constraints. The firm has to think from the production angle as well as the sales want. In the production angle keeping the customers want as the baseline the firm should realize its potential to develop the product. From