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Case Studies by Morten Bennedsen

29 case studies

published: 24 Mar 2016

  • Topic: Family Business
  • Industry: Sale of food, beverages and tobacco via stalls and markets
  • Region: Asia

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Abstract:
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 Objectives:
After reading and analysing 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.

Keywords:
Thailand, Family Business, Thammawattana, Ying Charoen, Market Stalls, Linacre, Porntip, King Bhumibol, Corporate Governance, Corporate Governance for Family Firms, Wicfe, Succession, Next Generation, Fair Process, Communication, Psychology, Gender, Education, Entrepreneurship, Leadership, Women in Family Business, Gender

published: 30 Jul 2018

  • Topic: Family Business
  • Industry: Heating equipment
  • Region: Europe

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Abstract:
Family-owned firm Brunata, an engineering business and major player in Denmark’s heat consumption market, faces a leadership crisis after the retirement of its charismatic founder. Although his four children have worked in the company, none ultimately have the right stuff to lead, notably the eldest son who is removed by his father three years after taking over the top job. The professional manager who is subsequently appointed lasts only two years. The case includes interview material and highlights the emerging role of the board, whose external directors tried to turn the situation around.

Pedagogical Objectives:
The case offers penetrating insight into the issues of succession and professionalization of management at family-owned firms. It provides information for a lively discussion on the role of founders, owner-managers, next gens, professional managers and board members planning for the long term, as well as the distinctive hurdles that such firms face. It can be used for courses on family business, directors, leadership and negotiation.

Keywords:
Family Business, Board of Directors, Brunata, Danish Market, Heat Meters, Owner-Managers, Negotiations, Succession, Next Gens, Ceo, Founders, Sibling Disputes, Professionalization, Denmark

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published: 30 Jul 2018

  • Topic: Family Business
  • Industry: Heating equipment
  • Region: Europe

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Abstract:
Family-owned firm Brunata, an engineering business and major player in Denmark’s heat consumption market, faces a leadership crisis after the retirement of its charismatic founder. Although his four children have worked in the company, none ultimately have the right stuff to lead, notably the eldest son who is removed by his father three years after taking over the top job. The professional manager who is subsequently appointed lasts only two years. The case includes interview material and highlights the emerging role of the board, whose external directors tried to turn the situation around.

Pedagogical Objectives:
The case offers penetrating insight into the issues of succession and professionalization of management at family-owned firms. It provides information for a lively discussion on the role of founders, owner-managers, next gens, professional managers and board members planning for the long term, as well as the distinctive hurdles that such firms face. It can be used for courses on family business, directors, leadership and negotiation.

Keywords:
Family Business, Board of Directors, Brunata, Danish Market, Heat Meters, Owner-Managers, Negotiations, Succession, Next Gens, Ceo, Founders, Sibling Disputes, Professionalization, Denmark

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published: 25 Apr 2017

  • Topic: Family Business
  • Industry: Papers and Allied Products
  • Region: South America

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Abstract:
Carvajal traces the 110-year history of one of Colombian’s oldest family-owned firms from a small print shop to one of the largest paper product conglomerates in Latin America. Founded in 1904 by Manuel Carvajal, a Colombian educator and erstwhile politician, the company has contributed to Colombia’s economic and intellectual development ever since. By the 1950s Carvajal was the leading printer and publishing house in Latin America. Although the company benefitted from state protection, a tradition of technical innovation was established – in 1958 it printed the first telephone directory for Bogotá on two-sheet offset press – and thereafter expanded into neighboring countries, diversifying into inter-linked activities. Throughout the 20th century the firm was led by descendants of the founder. In the 21st century, a non-family CEO was hired for the first time.

Pedagogical Objectives:
This strategy-making exercise for a family-run company that has reached a turning point in its 110-year-old history requires students to think about how ‘family assets’ can contribute to the firm during the 21st century. While family firms in Colombia are often associated with conflict and failure, here the challenge is to examine the role of professional management as a force for change. Students also need to consider why many Carvajal next gens have positioned themselves as potential leaders, with skills honed at top international business schools and a deep understanding of the family enterprise. Beyond the leadership issue, discussion can encompass the vision of the Carvajal family as the company expands beyond Latin America. Students of family business in the region will find many lessons to be learned from this exceptional firm and family, and their commitment to its survival.

Keywords:
Carvajal, Carvajal Empaques, Colombian Family Business, Grupo Norma, Publicar, Carpack, Assenda, Propal, Bernardo Quintero Balcázar, Pedro Carvajal, Ricardo Obregón Trujillo, Eugenio Castro Carvajal, Alfredo Carvajal Sinisterra, Adolfo Carvajal Quelquejeu, Wicfe, Succession, Next Generation, Education, Entrepreneurship, Leadership, Governance, Parallel Planning, Strategy, Boards

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published: 29 Mar 2017

  • Topic: Family Business
  • Industry: Papers and Allied Products
  • Region: South America

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Abstract:
Carvajal traces the 110-year history of one of Colombian’s oldest family-owned firms from a small print shop to one of the largest paper product conglomerates in Latin America. Founded in 1904 by Manuel Carvajal, a Colombian educator and erstwhile politician, the company has contributed to Colombia’s economic and intellectual development ever since. By the 1950s Carvajal was the leading printer and publishing house in Latin America. Although the company benefitted from state protection, a tradition of technical innovation was established – in 1958 it printed the first telephone directory for Bogotá on two-sheet offset press – and thereafter expanded into neighboring countries, diversifying into inter-linked activities. Throughout the 20th century the firm was led by descendants of the founder. In the 21st century, a non-family CEO was hired for the first time.

Pedagogical Objectives:
This strategy-making exercise for a family-run company that has reached a turning point in its 110-year-old history requires students to think about how ‘family assets’ can contribute to the firm during the 21st century. While family firms in Colombia are often associated with conflict and failure, here the challenge is to examine the role of professional management as a force for change. Students also need to consider why many Carvajal next gens have positioned themselves as potential leaders, with skills honed at top international business schools and a deep understanding of the family enterprise. Beyond the leadership issue, discussion can encompass the vision of the Carvajal family as the company expands beyond Latin America. Students of family business in the region will find many lessons to be learned from this exceptional firm and family, and their commitment to its survival.

Keywords:
Carvajal, Carvajal Empaques, Colombian Family Business, Grupo Norma, Publicar, Carpack, Assenda, Propal, Bernardo Quintero Balcázar, Pedro Carvajal, Ricardo Obregón Trujillo, Eugenio Castro Carvajal, Alfredo Carvajal Sinisterra, Adolfo Carvajal Quelquejeu, Wicfe, Succession, Next Generation, Education, Entrepreneurship, Leadership, Governance, Parallel Planning, Strategy, Boards

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published: 15 Dec 2016

  • Topic: Economics & Finance
  • Industry: Technology
  • Region: Europe

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Abstract:
On 30 August 2016, Margrethe Vestager, the European Commissioner for Competition, ordered Ireland to recover €13 billion in illegal state aid that the state had granted Apple over a decade from 2003. In allowing Apple to pay close to zero in taxes, she ruled, Ireland had given the foreign company a selective advantage over other businesses paying the regular corporate tax rate of 12.5%. Tim Cook, CEO of Apple, and Enda Kenny, the Irish Prime Minister, appealed the ruling, a process that is still ongoing. The case explores this event from five analytical pillars: 1) the role of Ireland’s low corporate tax rate in attracting FDI; 2) Apple’s decision to allocate its earnings to a paper company in Ireland with no physical presence in the country; 3) the repatriation of foreign earnings to the United States; 4) the transfer payments that Apple makes to the US to pay for R&D; 5) the Commissioner’s decision to impose a retroactive tax penalty on a foreign company that acted in accordance with the tax arrangements granted by its host country.

Pedagogical Objectives:
The case is designed to encourage students to think about the role of tax policy from the perspective of the company. With the rise of global companies such as Apple whose products are sold all over the world, the question of where they should be taxed becomes a particularly controversial issue. Students will be asked to reflect on tax policy around the following five points: 1) as a national competitive advantage in attracting FDI; 2) on shrewd corporate accounting that renders taxable income to nearly zero sums; 3) on powerful tax disincentives for the repatriation of earnings approaching two trillion dollars to the United States, 4) the political rational behind the current corporate tax principle that states taxes for innovative companies like Apple should be paid in the source country where R&D is carried out; 5) and that supranational entities such as the European Commission should take preventive measures and not corrective punitive measures in dealing with foreign countries who have created thousands of jobs in a particularly vulnerable host country such as Ireland.

Keywords:
Margrethe Vestager, Public Finance, Corporate Tax, Repatriation of Earnings, State Aid, Tax Haven, Ccctb, Apple, European Commission for Competition, Transfer Payments, Enda Kenny, Tax Minimization, United States, International Taxation

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published: 23 Jan 2019

  • Topic: Economics & Finance
  • Industry: Technology
  • Region: Europe

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Abstract:
On 30 August 2016, Margrethe Vestager, the European Commissioner for Competition, ordered Ireland to recover €13 billion in illegal state aid that the state had granted Apple over a decade from 2003. In allowing Apple to pay close to zero in taxes, she ruled, Ireland had given the foreign company a selective advantage over other businesses paying the regular corporate tax rate of 12.5%. Tim Cook, CEO of Apple, and Enda Kenny, the Irish Prime Minister, appealed the ruling, a process that is still ongoing. The case explores this event from five analytical pillars: 1) the role of Ireland’s low corporate tax rate in attracting FDI; 2) Apple’s decision to allocate its earnings to a paper company in Ireland with no physical presence in the country; 3) the repatriation of foreign earnings to the United States; 4) the transfer payments that Apple makes to the US to pay for R&D; 5) the Commissioner’s decision to impose a retroactive tax penalty on a foreign company that acted in accordance with the tax arrangements granted by its host country.

Pedagogical Objectives:
The case is designed to encourage students to think about the role of tax policy from the perspective of the company. With the rise of global companies such as Apple whose products are sold all over the world, the question of where they should be taxed becomes a particularly controversial issue. Students will be asked to reflect on tax policy around the following five points: 1) as a national competitive advantage in attracting FDI; 2) on shrewd corporate accounting that renders taxable income to nearly zero sums; 3) on powerful tax disincentives for the repatriation of earnings approaching two trillion dollars to the United States, 4) the political rational behind the current corporate tax principle that states taxes for innovative companies like Apple should be paid in the source country where R&D is carried out; 5) and that supranational entities such as the European Commission should take preventive measures and not corrective punitive measures in dealing with foreign countries who have created thousands of jobs in a particularly vulnerable host country such as Ireland.

Keywords:
Margrethe Vestager, Public Finance, Corporate Tax, Repatriation of Earnings, State Aid, Tax Haven, Ccctb, Apple, European Commission for Competition, Transfer Payments, Enda Kenny, Tax Minimization, United States, International Taxation

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published: 20 Dec 2013

  • Topic: Economics & Finance
  • Industry: Mining
  • Region: Asia

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Abstract:
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.

Pedagogical Objectives:
The case is designed for courses in Corporate Finance on the topic of family business and/or raising funds, or courses in International Finance or Investment in Emerging Markets (particularly Indonesia). Alternatively, it could be used in a course on Corporate Governance on the topic of shareholder activism and board monitoring.

Keywords:
Corporate Governance, Family Business, Asia, Reverse Merger, Board Monitoring, Business Groups, Tunneling, Shareholder Activism, Corporate Governance, Corporate Governance Across the World, Wicfe, Education, Entrepreneurship, Leadership, Governance, Parallel Planning, Strategy, Boards, Family Office, Wealth Management, Legacy, Ownership

published: 30 Jul 2018

  • Topic: Leadership & Organisations
  • Region: Global

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Abstract:
The case accounts for the gender pay gap in companies and industries around the world. In Europe, women earn on average 84 cents per hour for every euro men make. In the United States, they earn between 80 and 82 cents per hour for every dollar made by a man. The gap widens further after women have children. Iceland is a rare exception; companies in Iceland are under a legal obligation to prove that they offer equal pay. Elsewhere, the under-representation of women in leadership roles in government, industry, the boardroom and c-suite means a dearth of role models for girls. The case shines a spotlight on ingrained behaviours and perceptions that condone the gender pay gap on the grounds that men have more responsible jobs and hold more senior positions.

Pedagogical Objectives:
The case is designed for MBA participants and senior executives entering the labour force at management level or returning to the job market (female and male employees alike). It focuses on a key public policy issue that is present at all levels in the public and private sectors. Without seeking to present instant solutions to one of the thorniest problems facing organizations, it gives instructors the opportunity to demonstrate concern about gender-related issues and flexibility in handling classroom discussion on this hot topic.

Keywords:
Gender Pay Gap, Job Discrimination, Pay Data, Childbirth, Senior Positions, Low-Paid Work, Government Intervention, Women’s Work, Gender Segregation, Female Earnings, Pay Difference, Career Choices, Status Quo, Public Policy

published: 25 Sep 2017

  • Topic: Family Business
  • Industry: Household furniture
  • Region: Asia

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Abstract:
The case is about a small family-owned business making fine bone china in South Korea, whose founder was driven by a sense of filial piety, one of the principles of Confucianism. This emphasizes respect for parents, elders and children, and the idea that they will be taken care of in times of need. Exemplary behaviour is expected from children in public in order to reflect well on their family name and ancestors. Fraternity among brothers is also emphasized to prevent disputes arising out of sibling rivalry. The case explores how successive generations kept these values alive within the family, the company, and its employees. It also describes how more recently, Hankook Chinaware has lost significant market share on the domestic front as because of an influx of low-cost Chinese products flooding South Korea.

Pedagogical Objectives:
Instructors can use this case for specific situations in which the principles of Confucianism are being taught. Family business instructors who run courses in Asia-Pacific may find it particularly relevant as it deals with concepts relevant to the region. The case is short and easy to read. From a technical point of view, it can be used to shed light on the transfer of pottery skills from one generation to the next. Instructors can also use it to highlight how external market forces can transform a niche business into a commodity industry where profit margins are squeezed beyond breaking point.

Keywords:
Hankook Chinaware, Confucianism, South Korea, Porcelain, Luxury Chinaware, Dinner Plates, Dinner Plates, Pottery, Filial Piety, Wedgwood, Prouna, Vases, Josiah Wedgwood, Fine Bone China


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