Hoosier Castings Corporation | The Dynamics of Transitioning a Family Business | |
TEAM 7
CLARK HAYS, NITHYA SUNDARAM & JADE CHEN
TEAM 7
CLARK HAYS, NITHYA SUNDARAM & JADE CHEN
2/10/2014
2/10/2014

1. Burdens of Succession & Conflicts of Interest
The major stakeholders for HCC are the DeWitt family members (David DeWitt 51%, Gregory DeWitt 15% and Mabel DeWitt 22%), Brendon Morris’s management team (Gregory DeWitt, Scott Rolston, Ryan Williams and Jennifer Nichols), the non-DeWitt family board members (Brendon Morris and Daniel Michaelson), as well as the HCC’s employees. Among them, only the three DeWitt family members, Michelson and Morris are the shareholders of HCC.
HCC has a typical family ownership structure. The ownership and control is concentrated on the DeWitt family shareholders while currently David DeWitt serves as a chairman and consultant for the board, Gregory DeWitt is still on the top management team, and Mabel acts as an active participant in board meetings. According to Carl Magnus Bjuggren , Sven-Olov Daunfeldt and Dan Johansson’s “Highgrowth firms and family ownership” article, on the one hand, concentrated ownership gives the controlling shareholders incentives as well as ability to monitor the management. On the other hand, the combination of ownership and control means that families face opportunities to benefit themselves at the expense of other shareholders. History has also proven that this power concentration has helped HCC grew significantly and succeed in the first 20 years, yet created many burdens of succession for HCC.
The DeWitt family is very focused on the succession of the business, takes active management roles and closely monitors the management and day-to-day operation of HCC. However, the high level involvement has also caused issues for HCC. Despite Gregory filled Abraham DeWitt’s void