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A family business case study: Bottling family resilience

Operating a business in volatile, uncertain, complex, and ambiguous (VUCA) markets requires strategic agility. Leaders in these companies must continually assess current strategies against a changing landscape, and run experiments to inexpensively explore alternative strategies. Both the inherent uncertainty and the required agility to succeed in a VUCA world can take a heavy emotional toll on a leader. They can experience anxiety and a sense of loss of control as markets, competitors, and customers gyrate unexpectedly.

The uncertainty and the agility required to succeed in a VUCA world can take a heavy emotional toll on a leader.

A besieged leader might turn to the executive team for emotional support . In most companies, this vulnerable admission from a leader would undermine employee and investor confidence. Family-operated businesses , however, have an advantage , because a leader’s request for support builds on existing bonds and long-term commitments.

A case in point: Kingston Family Vineyards

Take Kingston Family Vineyards as an example. Nestled between the Andes and the coastal range, the Casablanca Valley in Chile boasts the right mix of sun, rain, and fog for several varieties of grapes. Run by Courtney , with help from her father Michael and brother Tim , the company sells some of its grapes to nearby wineries, but keeps the best to press and bottle wine under its own label for export to high-end restaurants and private collectors in the United States .

Selecting and evolving the appropriate target market, branding, pricing, and channel require predictions based on incomplete information . A short list of the momentous decisions that Courtney has made recently: shifting some of the farm’s acreage from dairy to grape; building the winery; selecting market niches for early traction; collaborating with wholesalers and distributors; growing direct sales customers; constructing a luxury tasting room and restaurant on site; and merging wine tasting with management training for students in South and North American business programs.

This management training, girded by a case study about the vineyard by authors Kaitlin Malloy and Professor Alyssa Rapp from Stanford University , explicitly emphasizes the challenges of growing an export business with a complicated global supply chain . It implicitly demonstrates the often under-appreciated resilience that emanates from a multi-generational family operation.

Family-operated businesses  have an advantage  because a leader’s request for support builds on existing bonds .

Management can never match family

The fate of the farm, its employees, and its owners lie in Courtney’s hands. Luckily, her immediate and extended family thrashes through these decisions with her. The cohesion of the family is not just evident in the business strategy . It also manifests as subtle but tangible details on the vineyard. The staff refers to Courtney, Tim, and Michael, and their spouses and children, by their first names—even to passing tourists—with affection and admiration. And the family treats the staff like family . Black and white photographs next to the pressing machines show multiple generations of Kingstons working and maturing among the vines. The wines are named after Courtney’s grandfather’s horses.

Pithy management mantras advise leaders to treat employees like family. While well intentioned, this advice falls flat because the manager-employee relationship is not designed to endure for a lifetime. Leadership training can enact processes and characteristics that bolster this transient bond to optimize personal and firm performance . But only a walk among the vines and a conversation with Courtney reveals the persistence and resilience that have been required from the Kingston family to build this business into a surprise in a bottle. The legacy of the Kingston Vineyard extends beyond the wine, beyond the business, beyond the industry. It is an illustration of the power of a family.

Make the most of what your career has to offer with a Masters in International Business from Hult. To learn more, take a look at our blog Climbing the family business ladder: Q&A with EMBA alum Mike Smollan , or give your employability a huge boost with an MBA in international business . Download a brochure or get in touch today to find out how Hult can help you to explore everything about the business world, the future, and yourself.

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Sage Business Cases: Family Business

In 2018, Sage Business Cases launched Family Business, a new teaching case series within Sage Business Cases. 

“Family businesses are an important source of dynamism in most economies, usually with an entrepreneurial attitude and a passion for the business,” says Dr. Dieleman. “But family firms also face unique challenges related to the combination of family and business, including succession, professionalization and legacy-building across generations. This case series brings out these challenges and successes with examples from all continents, and provides a rich source of teaching material for educators.”

The cases in this series span countries and cultures and highlight the varied challenges faced by family businesses across a range of different contexts. These cases will provide students and faculty with up-to-the-minute impactful cases that truly work to prepare tomorrow’s business leaders. 

Family Business Series Editor

Call for Papers

Have you ever gone searching for a suitable case in family business and could not find one? Do you have an idea or a rough case draft? Have you written a family business-related case you currently used in your classroom? Bring it to Sage  and we’ll work with you to develop your idea. We also encourage students to work alongside you as case writing enables students to apply theory to real-world situations, and they benefit from co- publication credits.

Suggested topics include:

- Values, culture, and identity in family business 

- Disruptive change in family business

- Entrepreneurship in business families

- Family firm constitutions, trusts, and family offices

- Family business groups in emerging markets

- Outside CEOs in family business

- Family offices as global investors

- Philanthropy and social ventures by business families

DEADLINE FOR SUBMISSION: August 25, 2023 (for January 2024 publication)

- We look for cases between 1,000 and 5,000 words.

- Please include discussion questions and teaching notes.

- Authors receive decisions within 6-8 weeks of submission.

- Manuscripts are accepted through our ScholarOne portal.

- Submissions guidelines and  templates are available on the author resources page.

View author resources

Cases from the Family Business Series

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The Case Study In Family Business: An Analysis of Current Research Practices and Recommendations

( Authors : Tanja Leppäaho, Emmanuella Plakoyiannaki, and Pavlos Dimitratos)

Research Applied précis prepared by Nava Michael-Tsabari, The Raya Strauss Center for Family Business Research, Tel Aviv University

Case study has emerged as a prominent methodological approach for qualitative researchers interested in family business (FB). Thus, the research questions posed for the present study were the following: (a) How has the case study been practiced in FB as a discipline up to now? (b) How could case study methodology be applied in the future? The term “case study” refers to qualitative research which “examines, through the use of a variety of data sources, a phenomenon in its naturalistic context, with the purpose of ‘confronting’ theory with the empirical world.”

There are three possible case study approaches in research, which reflect different philosophical assumptions regarding the nature of social reality and what it means to be human (ontology), and the nature and purpose of knowledge (which can be placed along a continuum, ranging from objectivist to subjectivist perspectives). These are:

• Positivistic (“qualitative positivist”) – a search for facts and observations that closely mirror reality, emphasizing the potential of case studies to generate new theory from empirical data in the form of theoretical frameworks and/or testable propositions. This methodology is oriented to regularities rather than to the exploration of the reasons behind them .
• Interpretivist – supports the idea that knowledge development concerning the social world relies on human interpretation. According to this view, the theoretical purpose of the case is to develop an understanding of the phenomenon investigated by appreciating its uniqueness, complexity, and interaction with its context. Researchers in this tradition embrace context, narratives, and the personal engagement of the investigator. The selection of instrumental and unique cases, or of critical, extreme, or revelatory cases, is seen as offering a high potential for FB theorizing.
• Critical realist – regards explanations of social phenomena as being both causal and interpretive, matching the positivist and constructivist/interpretive views, respectively. Critical realist case studies seek to identify causal mechanisms that do not function at a general level, being rather context-based. The goal is primarily to explain the causal mechanisms that generate a certain event.

To examine the practice of qualitative FB case studies, the authors undertook an in-depth content analysis of 75 FB case studies published between 2000 and 2014 in high-quality academic journals. They analyzed the philosophical foundation of the case study (the assumptions, theoretical purpose, and research questions), the logical structure of the study (the rationale of the study, which had implications for the selection of the setting), and the rhetoric of the writing in the study (the language, structure and style). They found 67 positivist studies, seven interpretative studies, and only one critical realist case study.

The authors found that the cases seemed to struggle to align themselves with a specific philosophical orientation, often bringing disparate elements forcibly together without giving adequate justification for any of them. Cases appeared to blend different philosophical assumptions within a single article, even if they had very different ontological and epistemological starting points. Moreover, the reporting of the case study method appeared to lack transparency.

The authors do not seek to replace the qualitative positivist case study with interpretive or critical realist studies; rather they hope to encourage a plurality by using more of the last two methods. They also suggest that FB case researchers could use data other than interviews in developing their accounts, such as direct observation, focus group discussion, and secondary materials (including company archival data). These alternative orientations, in conjunction with the positivistic approach, could allow researchers to capture more of the dynamics and complexities of FBs, and make qualitative case studies more applicable to FB theorizing.

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The Case of the Family Business

The case study, a story describing a situation where the ending is not revealed to the reader, is an amazingly powerful educational tool.

Readers are asked to develop an ending and justify their choice. In the business classroom cases easily engage students and move them higher on Bloom’s taxonomy of learning.  They apply, evaluate and integrate new knowledge rather than memorize or observe. The freedom to craft a story ending also encourages questioning and creativity.

The characters in the case study come to life to illustrate the lessons. 

I once presented a “visual case study” to an audience of financial advisors. It was a simple cartoon image.  The father, a family business owner, was relaxing in his club chair at home after work. The mother was featured in the image pleading with her husband to give their son, who was not pictured, a raise.  That single panel and my open-ended question “What’s going on here?” launched an animated discussion. Was the father not willing to recognize his son’s strong workplace performance? Was the mother asking for compensation that her son, in his employment role, didn’t deserve?  Would the son accept the raise? The simple dilemma of this family business engaged everyone.

Cases don’t have to be complex to teach next generation family members more about the business. Even a simple story will prompt broader questions about the business and the history. Here are some ideas for case discussions embedded in the story of your family business:

What is the next community service project for the family?

A story that describes the legacy of philanthropy in the company to prompt a conversation about values and the importance of giving back invites young family members to determine how they want to contribute.

What is the best department for the business internship for family members?

A story that features the early careers of family members informs a comparison of the organizational structure of departments and responsibilities in the family company. 

Should the family be featured in company advertisements?

A story about the pride of family ownership and the importance of family privacy encourages a discussion of the family brand and identity of the business.  

What new social media channels could help promote the family company?

A story describing how past social media content decisions were made and how the audience engages digitally with the family business would explore target customers and channels used to reach them. 

An opportunity to describe the business while encouraging critical thinking is a worthy investment of time.   The writer will also gain clarity and perspective when capturing a question for the business and preparing the facts and context of the situation. 

Contact us for help developing a case study for your next generation family members.

Celebrating the family in family business.

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Case Study 1: Family Business

Jane has just been hired as the head of the Payroll Department at R&S Electronics Service Company, a firm of 75 employees. She was hired by Eddie, the General Manager of the company, who informed her of the need for maintaining strict confidentiality regarding employee salaries and pay scales. He also informed her that he fired the previous Payroll Department head for breaking that confidentiality by discussing employees' salaries. She was also formally introduced to Brad, the owner, who told her to see him if she has any questions or problems. Both Brad and Eddie made her feel welcome.

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Multinational corporations' (MNCs') international staffing policies have been evaluated in terms of cost and efficiency arguments. Research has not addressed, however, the ethical impact of these policies on diverse stakeholder groups. This paper presents a conceptual framework by which ethnocentric, polycentric and geocentric staffing policies are theoretically linked to underlying decision-making modes of instrumentality, bounded rationality and economic rationality, respectively. It goes on to describe the ethical rationales associated with each policy type, namely, distributive justice, moral rights of man, and utilitarianism. An investigation of resulting ethical dilemmas affecting relevant MNC stakeholder groups is incorporated and offered as a tool for analyzing the true and full costs of trade-offs when choosing one policy over another. The paper concludes with a discussion of the implications of the conceptual framework for theory and practice and directions for future research.

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Family Business Case Study

Author: Larry Chester

A family business can be a great source of pride for everyone involved. However, working with loved ones can present its own challenges. So, whether you’re a small- or medium-sized business, maintaining a strong cash flow and ensuring the business’ profitability can go a long way when legacy and transition issues arise.

Bringing Value through CFO Insights

This case study tells the story of a family-run company and provides recommendations from the desk of a seasoned chief financial officer. A lot of family members worked here, and the owner was concerned about what would happen to his entire family if the business wasn’t successful. Having started in his garage, this retail powerhouse had grown without any significant internal structure. It was time to put the pieces of the puzzle in place.

• Business – E-commerce retailer
• Location – Suburban Chicago
• Sales – $11,500,000 annually
• Ownership – Single owner (many family members as employees)

Initial contact –

The business owner was concerned about cash flow and profitability. He was thinking about turning the business over to his two sons. His fear, however, was that if the company failed, his entire family would become unemployed.

Significant Findings and Recommendations:

The company was short on cash and had used up most of its operating line of credit. The company had an inadequate cash flow forecast. It was maintained out of house, making it difficult to manage.

Recommendations

• Bring the model in house and simplify it to make it more understandable and usable.
• Clamp down on immediate purchases, until cash became more readily available.

The company has many items available in low quantity. More than 29 percent of the inventory had not been sold in the last 90 days, and 16 percent hadn’t been sold in about two years. More than 1,000 items had a quantity of one, which took up space and resources, but contributed nothing to sales.

• Get rid of all the items in the warehouse that have only a quantity of one. Donate or dispose of them.

The company had no dedicated purchasing function. His sons had no strategic purchasing plan or control of economic order quantity, safety stock, etc.

• Assign one person to the purchasing of all inventory items.
• Determine if items are restocking, or one-time specials.
• Decide which channel is best for the sale of individual products.
• Establish cycle counts to keep more accurate inventory.

Sales Channels

The company sells primarily on eBay, Amazon, and Overstock plus other outlets. They are held hostage by the operating requirements of each channel and have not developed a consistent strategy to support each of the channels individually.

• Evaluate what their business model is and direct the resources in that area. Do they sell specialty products? Close-out sales? Outdoor products? Focus on one segment rather than being scattershot.
• Determine which channels are more ideally suited to their product lines and specifically identify the needs and requirements so that they focus on “favored vendor status.”
• Understand what the actual cost is of operating within each of those channels so that they understand the expected profitability and set KPIs to track their performance.

Decisions, Decisions, Decisions

All businesses face issues in operations and finance. They can be even more pronounced if it’s a family-run business. With an experienced CFO, these issues can be identified and resolved on a regular basis saving the CEO time, money, and headaches.

We hope this case study is helpful to you and your business operations and have one question to ask: Who is making these finance and operational recommendations in your organization?

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The Key to Successful Succession Planning for Family Businesses

• James Vardaman

Don’t exclude non-family members from the discussion.

Successfully passing the baton to the next generation is a goal for many family business leaders. It can also be a sound business move if the right steps are taken. By clearly communicating family succession intentions, developing strong relational bonds, and proving the fitness of next generation leaders, family firms can achieve buy-in from their nonfamily employees. Not only will this make for a smooth leadership transition, but it can also increase nonfamily identification with both the family and the firm, creating a more productive and satisfied workforce that propels the firm for years to come.

The succession process is one of the biggest challenges facing family firms, as most fail to remain a family business past the second generation. Among those that do succeed, a key concern is how nonfamily personnel will receive a successor. Perceptions of nepotism in succession can undermine nonfamily employee commitment to the business and their continued participation in the firm. Addressing this common issue can be difficult because the ability to choose a family successor and provide employment opportunities for family members is often a primary aim of family business owners. Thus, a key challenge for family businesses is gaining buy-in from nonfamily employees for the next generation of family leadership .

• WT Will Tabor is an Assistant Professor of Business Administration at Mississippi College. His research focuses on family businesses and organizational ethics. His work has been published in Family Business Review and The Journal of Business Ethics .
• JV James Vardaman holds the Chair of Excellence in Free Enterprise at the University of Memphis and is the author of Global Talent Retention: Understanding Employee Turnover Around the World .

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