Case Study #4

WHO IS THE WORTHY SUCCESSOR?

Submitted By:

AMONELO, Setchel Hya

ARENO, Vincent Jiro

CARGAMENTO, Ziah Mei

REGASPI, Krystle Joy

VILLASIN, Rene IV F.

BSMM01

Submitted to:

Ramil Paolo B. Salamat

Professor

July 2, 2023
 CASE STUDY # 1

I. TIME CONTEXT
In the year of 2003, Jun and Nena Abad were choosing among their children who
will be the successor of Total Corporation.

II. VIEWPOINT
Nena Abad, the first-generation owner of Total Corporation, and her husband are
looking for a new successor to their family business.

III. V-M-V STATEMENT

Vision
To be the leading provider of high-quality, affordable, and sustainable food
products, delivering exceptional value and convenience to our customers.

Mission
to provide our community with a convenient and comprehensive shopping
experience. We strive to create a welcoming environment that meets the diverse
needs of our customers.

Values
Customer Centricity
Customer satisfaction is our top priority. We give excellent service, and a wide
selection of high-quality products.

Quality and Sustainability

We are committed to offering products of the highest quality, sourced responsibly.
 Integrity and Transparency
We conduct our business with honesty, openness, and ethics. We build trust with
our customers and stakeholders by keeping communication open and keeping the
highest standards of integrity in every part of our company.

Teamwork and Empowerment

We encourage open communication and encourage all staff to contribute ideas.
We value their expertise, promote professional growth, and encourage teamwork,
recognizing that their dedication and passion are vital to our success.

IV. STATEMENT OF THE PROBLEM

How would Jun and Nena identify who would be chosen as the successor to their family
business?

V. STATEMENT OF OBJECTIVES

SHORT TERM
S – To maintain the business’s viability and provide for their family’s future
generation’s financial needs.
M – To officially integrate the potential successors into handling the Total
Corporation with their impressive backgrounds.
A – To expand their business nationwide with different shops that cater to
different products and services.
R – To appoint one of the candidates as a successor of the company
T – To select the new successor of the Total Corporation before the departure of
Jun and Nena from the company
 LONG TERM
S – To make Total Corporation an effective and successful business that can be a
legacy for future generations.
M – To properly utilize and make use of the two successors that were chosen to
produce corporate standard results.
A – To increase the expansion of their business throughout Southeast Asia.
R – To sustain the company’s needs and manage it properly.
T – To continuously maintain the profitability and productivity of Total Corporation
and its other businesses in the upcoming years.

VI. SWOT ANALYSIS

STRENGTHS WEAKNESSES

• Conglomerate/Multiple • Different Management

businesses Approach
• Strong Educational • Internal Management Issues
Background • Succession
• Financial Stability • Conflicts between members.
• The scale is up to a corporate • Questionable Future
standard. Management

OPPORTUNITIES THREAT

• Company exposure • Company Failure

• Nationwide Expansion • Competitive market
• Succession planning and
• Succession and generational
talent development
• Participate with charitable gaps
organizations. • Future Conflicts and
• Flexible and Adaptive
Challenges
Business
 STRENGTH
Conglomerate/Multiple businesses- Total Corporation is a company that has
multiple businesses. TC has grocery stores, department stores, RTW stores,
beauty salons, and pharmaceutical outlets.

Strong Educational Background - The children of the abad couple have a gread
educational background that would be a great advantage to the company. (

Financial Stability - Total Corporation has multiple revenue streams due to its
numerous businesses, which have allowed it to consistently meet the family's
financial needs over the years.

More branches and outlets: The grocery business had four branches while RTW
business had 82 outlets located within and outside Metro Cebu.

Market Trend Competence - The Total Corporation will be able to keep its place
long-term wise because of what they offer. Their businesses are in demand, and
it will not falter for the preceding years that they will be professionally active.

WEAKNESSES
Different Management Approach- Jun and Nena are having a conflict in terms
of their management approach. Jun is professional, and he took a scientific
approach to management. While Nena was down-to-earth, she took a personal
approach to managing their employees.

Internal Management Issues - There are decisions that Jun made that were
resented by his children because of his approach and this can be the root of a
misunderstanding in the management role of Jun.
Succession - Transferring management and leadership to the next generation
may be difficult, with difficulties in assuring continuity and a smooth transfer.

Conflicts Between Family Members – Having four children and an adopted child
dealing with their parents' business can be horrendous for them as they show their
unwillingness to show support and take the lead for the business.

Questionable Future Management - Due to having some complications with

deciding who they choose to take over the company, all candidates are
unmotivated with leading the company which can make the future of the company
to have some management problems in the future that can also hinder the
operation of the business.

OPPORTUNITIES
Company exposure- Total Corporation operates numerous businesses, therefore
their customers are already familiar with them.

Nationwide Expansion - Total corporation has well established themselves in the

province of Cebu, It can be to their advantage if they expanded their enterprise
throughout the Philippines.

Succession planning and talent development - Total Corporation can ensure a

seamless transition and nurture a skilled next generation by investing in
succession planning and enhancing family members' talents.

Participate with charitable organizations - This could help Total Corporation to

promote their businesses and to give back to their community.
Flexible and Adaptive Business - The company can adapt to changes depending
on the market situation due to what they offer and can be tremendously
advantageous during an economic era where all are changing at a high pace.

THREATS
Company Failure- If Jun and Nena do not choose the right successor for Total
Corporation, the company will also be folded up, just like other companies that
failed to prepare for succession.

Competitive market - Total corporation can be outnumbered by its competitors

who are in the same industry and can decrease its market share in the country,

Succession and generational gaps -Total Corporation may experience conflicts,

leadership gaps, or a loss of expertise between generations if succession planning
is not managed effectively.

Future Conflicts and Challenges - Total Corporation may experience more

challenges if Jun and Nena will not be able to select who will manage properly.

Sign of the times – Failure to recognize changes can be a challenge for the
business, especially during a timeline that had tremendous and countless trends
that were created in that era.
VII. ALTERNATIVE COURSES OF ACTION

1. To Officially name Bert, the oldest as the successor of Total Corporation

2. Making Bert and Gerry Co-Successors and giving them a reasonable

percentage of the shares of Total Corporation.

3. Having Janice as the newly appointed successor of Total Corporation

VIII. ANALYSIS OF ALTERNATIVES

ACA1 - To officially name Bert as the successor of Total Corporation

Advantage:
Bert has a great educational background that can be an advantage for the
company, his experience in an auditing firm can be a tool that they can use for the
business.

Disadvantage:
Bert has not graduated from any business-related program. He is not business-
minded at all, unlike Gerry, who is already street-smart and has the knowledge to
run a business. Of all these three siblings, Bert is the only one who doesn't have
experience, while Gerry and Janice have handled financing and operations.
 ACA2 - Making Bert and Gerry to be Co-successors.

Advantage:
Having both credentials and business sense will be a massive advantage for the
company, it is not common for other corporations to have multiple successors, but
it is a strategic model that can also be effective.

Disadvantage
There will be a chance that their relationship with each other will hinder how they
run the business and business-wise, grouping them in the same place might be
bearable but not comfortable.

ACA3 - Having Janice as the newly appointed successor of Total Corporation

Advantage:
She worked with Total Corporation right after she graduated and has a good
relationship with the two elder brothers who also have a good potential as
successors of the corporation.

Disadvantage:
As per what in the case analysis said that even though she already had experience
with their business. She appeared to be more family-oriented than business-
oriented. Since she already had a family.
IX. DECISION STATEMENT

Our group chose ACA 2 which is making Bert and Gerry create a joint successorship and run the
business together at the same time individually. Just like how the founder of Total Corporation
managed their company by dividing their tasks into which one will be tasked to handle the financial
matters of the business and the other will oversee the operations as per Jun and Nena. The same
will be for our chosen successors since doing this approach for the company might be unorthodox.
However, this type of business model is done to numerous corporate businesses, and we want
to apply it to their company. Having both impressive and quality credentials and business sense
because of experience can be a tremendous help for Total Corporation. We did not choose the
other ACAs for the reason that we wanted to portray that having Joint Successorship will be more
efficient and effective. It might seem that they, in a long-term sense will not have great chemistry
and will not work together but it is the other way around, due to their competitive traits against
one another, by dividing their managerial tasks they can fully show who is better in handling the
business which is both beneficial to the company and to their selves as well.

X. IMPLEMENTATION PLAN

TACTICS (SHORT)
• Examine Gerry and Bert’s skills that can be useful for the welfare of the
company.
• Enhance Gerry and Bert’s skills as they move to take over the company
through training and development.
• Gerry and Bert can join seminars, or institutes in excelling and nourishing
their knowledge, and in managing their skills.
• Give Janice a spot in top management to help Gerry and Bert communicate
with each other; this results in balanced work and increased productivity on
both sides.
• Apply a turnover period for the successors to fully grasp how to operate and
manage the company.
STRATEGIES (LONG)
• Keep track of Gerry and Bert’s performance with regards to the defined
objectives and goals of the company.
• Make Gerry and Bert commit to lifelong learning and personal
development to continuously improve their skills and enhance their
leadership skills to adapt to different situations.

• Let Gerry and Bert be present to business endeavors that will help them
realize the potentials, and opportunities in handling their family
business.
• Gerry and Bert must start building good relationships with employees
that may give them lifelong realizations about the responsibility they
have now, and this will be a great motivator for them to take their work
seriously.

XI. BUSINESS LESSONS LEARNED

I learned that choosing the right person to manage a business is a huge factor in maintaining its
operations. For the past few years, I have encountered a lot of businesses that gained popularity
from their customers, which resulted in them increasing their income monthly. However, there are
such issues that some companies experienced bankruptcy after rising because of their failure to
select the right successor. (Regaspi, Krystle)

I learned that running a family business can be both rewarding and challenging. It is rewarding
because you will be the one who gets the higher authority and sales from all the businesses your
family has, but it may also be challenging because most of the burden will go to you, and it is hard
to plan for the smooth transition of leadership and ownership to the next generation. (Amonelo,
Setchel Hya)

In a family business, it’s common that their children are heirs. I am experiencing it too. I also don’t
like to work in our business even though my father always says/wants me to be the one who will
manage or handle it in the future or after I graduate. It’s just the fact that I want to experience
working in a company or somewhere that is far from our home. But then, I realized that we already
have a business in which I can manage it and I can do anything I want. So, I could only say that
people can be changed. Just like in the case study. At first their children don't want to be in their
business, but they can be changed if they see a motivation in and realize what they can get from
their business. (Cargamento, Z.M.V.)

I have learned that in a succession of a business you need to choose the most appropriate person
who knows the business inside and out especially if that person has the work ethic and passion
to keep the business in the market. In the case study, two of their children are eligible to take over
the corporation because it has helped them grow as an individual and hone their skills and
knowledge for the welfare of the company. A child is fortunate enough to have a company to
inherit but the legacy that they will build upon their generation will leave a mark in the industry, it
will boost the profile of their business making them known in the market, this can be done by
someone who is passionate about what they do and I believe that these are the keys to building
a successful business. (Areno, Vincent Jiro)

I learned that choosing your successor is also one of the scenarios you might take as a potential
entrepreneur and that all the things that I would create must continue to whomever I pass it on. I
also learned that never take things for granted as such, Total Corporation was a big factor in
financially supporting their children and yet they want to avoid the business that helped them to
where they are now. Personally, I thought that if I was their child, I would immediately volunteer
to manage such a nice company that was hard-earned and learn from them. Through this Case
Study I also learned that you cannot beat or do something about the time, and you cannot manage
a company forever so you need someone to help you move forward. (Villasin, Rene IV)