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Selected Case

published: 27 Jul 2015

  • Topic: Family Business
  • Industry: Chocolate industry
  • Region: Europe

Abstract:
The first of this two-part case, “Principled Capitalism”, analyses the unique values-based leadership practised for 186 years by the Cadbury owners, particularly how its strongly Quaker-inspired leaders developed a unique socially-engaged form of capitalism. Through the history of the Cadbury family, it describes the global development of the chocolate industry. Driven by a handful of dedicated entrepreneurs, and dominated in the UK by Quakers, it was an industry where an innovation could change the market overnight. Part 2 “Sold for 20p” analyses the many governance challenges the Cadburys faced. From their merger with the troubled Fry’s in 1918, which significantly enlarged the number of family owners, the transfer of their ownership to charity foundations, the motivation and long-term consequences of listing the firm in 1962, a strategic merger with Schweppes in 1969 and forced demerger in 2008, and the family’s exit with the hostile takeover by Kraft in 2010, it offers valuable lessons in how family firms can use ownership design to mitigate business and family roadblocks, and how dilution of ownership can have unforeseen consequences and ultimately leave the family firm vulnerable to predators.

Pedagogical Objectives:
. Understand the long-term family ownership and control . Understand the benefits and costs of going public . Understand why families exit their businesses

Keywords:
Chocolate Industry, Family Ownership, Family Control, Family Assets, Quaker Values, Going Public, Cadbury Code, Mergers and Split Ups, Corporate Social Responsibility, Hedge Funds, Control Contest, Hostile Take Overs, Family Exit, Corporate Governance, European Competitiveness, Europe, Best Practices, Wicfe, Succession, Next Generation, Education, Entrepreneurship, Leadership, Governance, Parallel Planning, Strategy, Boards, Social Entrepreneurship, Impact Investing, Philanthropy

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