Cases

Nintendo: An Outsider As Successor

Ruth Tan, and Yupana Wiwattanakantang, Case No. 9B18N015, IVEY Publishing.

Description

The death of Hiroshi Yamauchi, the charismatic, visionary leader of Nintendo Co., Ltd. (Nintendo), could affect Nintendo’s corporate financial policy. Following his passing, Yamauchi’s family is left with a huge inheritance, but also a huge dilemma: they need cash to settle the exorbitant inheritance tax bill. The family is seeking advice from Nintendo in how to deal with the matter. How can Nintendo solve this financial trouble in a way that balances the interests of both the family and Nintendo?

Pedagogical objective

This case can be used in an advanced undergraduate or graduate course in family business, family governance, or financial management. It illustrates some unique characteristics of family ownership, control, and management. 

San Miguel: Succession in The Philippines’ Largest Corporation

Ruth Tan and Yupana Wiwattanakantang, Case No. 9B17C036, IVEY Publishing.

Description

In September 2011, San Miguel Corporation (SMC) was the largest diversified business group in the Philippines. At the age of 76, after controlling the company for more than three decades, Eduardo Cojuangco Jr. underwent an ablation to correct an irregular heart rhythm. His succession planning would involve not only a leadership transition but also his ownership stake. This case presents an unusual and interesting scenario, with family heirs who have no interest in taking over the business. Cojuangco’s children have instead opted to hold political appointments, rather than running the SMC business empire, which raises issues for an effective succession plan. 

Pedagogical objective

This case can be used in an advanced undergraduate or in an MBA course covering the topics of family business issues, family governance, and financial management by a family business. In particular, this case provides an opportunity to examine the various challenges facing Cojuangco’s succession planning. Typically, a family business aims to preserve its ownership and leadership. Even if no suitable internal candidate is available for the top position, the family may still attempt to retain a controlling stake.

Besides the issue of succession, the case presents an opportunity for students to explore the role of business groups in emerging economies. In the Philippines, as in most countries in Asia, big businesses are owned and controlled by a handful of influential families in the form of business groups. 

Samsung: Family Assets and Roadblocks 

(A) - Drivers of Success, Family Assets and Business Strategy

(B) - Heart Attack Puts Succession Planning at Risk

(C) - Court Calls 'Time Out' on Lee Jae-Yong

Morten Bennedsen, Brian Henry, and Yupana Wiwattanakantang INSEAD Publishing, November 2017.

Description

This three-part case covers the history of Samsung from its origins as a small trucking company to one of Korea's largest conglomerates. Part A, "Drivers of Success, Family Assets and Business Strategy", charts the growth of Korea's the export-led economy after the end of Japanese occupation in 1945, driven by a handful of family-owned 'chaebols'. Founder Lee Byung-chull's trucking business, set up in 1938, diversified in the aftermath of the Korean War, as he forged a strong political network that enabled him to embed his family's influence and assets in the business strategy. Part B, "Heart Attack Puts Succession Planning at Risk", describes how the ill health of the second-generation leader Lee Kun-hee deprived the firm of a clear succession plan. As the de facto leader of Samsung, his son had to build up his power base to assume the role in the context of a complex ownership structure. Part C, "Court calls time out on Lee Jae-yong", examines how the de facto heir was convicted of bribery and given a five-year prison sentence, prompting speculation that he would run the Samsung empire from his cell.

Cargill: Keeping the Family Business Private

Ruth Tan and Yupana Wiwattanakantang, Case No. 9B15N022, Ivey Publishing (Canada), May 2016.

Description

When Margaret A. Cargill passed away in 2006, her 17.5 per cent stake in Cargill went to Margaret A. Cargill Philanthropies (MAC). MAC lobbied for her stake to be liquidated. Cargill proceeded to shed its 64 per cent stake in Mosaic, North America's second-largest fertilizer company, in exchange for Margaret Cargill's stake in the company, in order to maintain control over the company. Like many second- and third-generation family businesses, Cargill's current family owners were not actively involved in the day-to-day running of the company. Was spinning off Mosaic in the best long-term interests of Cargill? Were there other feasible ways in which Cargill could have better facilitated the liquidation of Margaret Cargill's stake?

Pedagogical objective

This case can be used in an advanced undergraduate or MBA course in family businesses, family governance, or financial management. It presents an opportunity for students to explore the following topics: -Trade-offs between liquidity and control. -Management for the long term. -Shareholder conflicts. -Family governance. -Alternative ways of liquidating shares.

The Bancroft Family and the Battle for Dow Jones: Never Sell Grandpa’s Paper 

Morten Bennedsen, Brian Henry,  and Yupana Wiwattanakantang, INSEAD Publishing  (France), May 2016.

Description

Dow Jones, publisher of The Wall Street Journal, had been a source of wealth, pride and prestige for the Bancroft family for much of the 20th century. From 1928 to 2007, the family lived off company dividends and left the day-to-day management of the publishing business to senior journalists who had worked their way up through the ranks of the WSJ. But in 2007, when Rupert Murdoch – whose global media empire dwarfed that of the Bancrofts – offered to buy Dow Jones at a generous premium, the family was split down the middle. To sell or not to sell? The case explores the events that led up to the dynasty’s exit and the grandiose entrance of an Australian-American media mogul onto the US media scene.

Billionaire's Curse: Gun-based Succession Planning for a Bangkok Market 

Morten Bennedsen, Brian Henry, and  and Yupana Wiwattanakantang, INSEAD Publishing  (France), April 2016.

Description

The case highlights the infighting within a Thai family who own and operate a fresh-food market stall business in Bangkok. The case explores the depths to which the Thammawattana dynasty sank in order to keep control of a profitable cash-in-hand business that had made the matriarch, Suwapee Thammawattana, a billionaire by the time of her death at age 65.

Pedagogical objective

After reading and analyzing the case, students will be able to evaluate the importance for family businesses of having a long-term succession plan. Against the bloodstained backdrop of a family business in Thailand, students will learn about the challenges of succession in an emerging country. The case enables them to discuss the importance of cohesion among the members of a family business.

Toyota: A Family Heir Steers Carmaker out of Crisis 

 Morten Bennedsen, Brian Henry, Iand and Yupana Wiwattanakantang, NSEAD Publishing  (France), January 2016.

Description

In 2008-09, Toyota Motor Corp. became engulfed in a perfect storm: oil prices spiked, the global financial crisis brought car loans to a halt, the dollar tanked against the yen, and millions of Toyota vehicles in North America were recalled. Toyota posted its first ever loss since 1950. The case describes how Akio Toyoda, scion of the dynasty behind the Toyota empire, ascended to the top job in 2009, and turned the struggling carmaker around. It also tells the story of the Toyoda family, whose 8% ownership stake has enabled it to maintain control of one of the world’s most successful companies and steer it through one of the most difficult periods in its history.

Pedagogical objective

The case highlights the role of a powerful Japanese dynasty in managing a global multinational company for nearly 80 years, in particular how the heir single-handedly restored the company values and legacy at a crucial moment in its history. It offers an opportunity to discuss the role of professional managers who are vital for the sustainability of family-run enterprises. The case encourages students to view global companies such as Ford, Fiat and VW as more than industrial giants but as family-run businesses, each with a different approach to management.

Yung Kee: A Family Feud Divides Hong Hong

Morten Bennedsen, Brain Henry, Joseph Fan,  and Yupana Wiwattanakantang, INSEAD Publishing (France), June 2015.

Description

The Kam family has owned Yung Kee, a huge 750-seat restaurant in Hong Kong, for more than 50 years. Starting out as a food stall, the business still 'packs them in' today. However, soon after the death of the patriarch, at the age of 96, in 2004, his two oldest sons became embroiled in a bitter and very public family feud over the restaurant's management and the family fortune, estimated to be worth HK$2 billion.

Pedagogical objective

The case offers an excellent introduction to the complexities of succession in family businesses. Most students think of ownership design as a simple transfer of assets from one generation to another. As a result they fail to consider the larger social interests of the surviving family members. The Yung Kee case has the advantage of being readily accessible while giving ample opportunity to ask questions about ownership design.

East Meets West: Rothschild’s Investment in Indonesia’s Bakrie Group

Morten Bennedsen, Brain Henry, Emir Hrnjić,  and Yupana Wiwattanakantang, INSEAD Publishing (France), December, 2013.

Description

This case describes the challenges encountered by Nathaniel Rothschild after making a US$3 billion investment in 2010 in a family-owned business group in Asia. Scion of the Rothschild banking dynasty and private equity fund manager, Rothschild and his business associates created a LSE-listed shell company, Bumi PLC, which acquired PT Bumi Resources and Berau Coal. These were among Indonesia's largest coal mines and the largest coal exporters in the world, and were controlled by the Bakries, a powerful Indonesian family whose patriarch was a candidate for the presidency in 2014. After losing at least 70% of his investment in three years, Rothschild eventually requisitioned an extraordinary general meeting in February 2013, attempting to remove the Bakries and their associates from Bumi's management team. Despite western-style corporate governance manoeuvres, the PE investors found it challenging to control the politically connected family in Indonesia.