Luke Householder
J-401

Three Generations

The Three Generations case has several problems that show from the first transition of father to son, and carries on throughout the live of the business. The one major underlying problem is the lack of central control and power. This can be stated as the lack of effective corporate governance. This problem shows itself over and over in the business. The lack of conformity and strategy, the legal issues, and the splitting of the company are signs of the problem. The symptoms that arise from the lack of corporate governance are obvious, beginning with unclear leadership. The idea of corporate governance is to align the decisions of the managers to best suit the interests of the owners, or shareholders. In the case of Three Generations the owners and the decision makers are the family. The causes conflict of interest early on. The majority owner, Harry and Don after the first transition, are assigned control and given the task to build the business. The problem is that the minority owners, the sisters, have little to no say in the actions of the company. The legal battle that ensues creates a divide in the family, which are the shareholders. The intensions of the sons were to grow the business and the family legacy, but the path to do so was not shared. An alternative they could have used earlier in the process would have been to bring in an outside professional to develop the strategy and carry it out with their interests in mind. They eventually got to that point, but I believe a little too late. Once the company became large enough the family should have backed away from the decision side and let a manager run it. This would have created a clear leader in the organization, defined the goals, and allowed for the voice of the owners to be heard, but not the final word. Separation could have solved the issue with the