Professional Documents
Culture Documents
I. INTRODUCTION
The Vega Food Company is a family business that was founded by Francisco Valle Sr with its value limited to
certain members of the family to the beginning. In fact as displayed in the case, the Valle family had a message
that was built by Francisco Valle Sr. while the organization was in its early foundation: carry wealth and
nurture the family and grown up as Spanish meat-producing firm that produces hams, sausages, and other
goods for domestic and export markets as its main production process. The Vega Food Company was the $100
million company, owned and managed by the Valle family, had a Randall reputation for quality products in the
marketplace and had a potential generating $104.8 million per year. There are also, two kinds of shares issued
to the family, A meant voting shares while B meant non-voting dividend bearing shares. The shares were
distributed accordingly: the Valle family was comprised of Isabel; Francisco Sr. widowed wife, Rosa,
Francisco Jr., Ana, Maria, Tere, and Mari among which Only Francisco Jr. and Tere were involved, to some
extent, in the family business.
It was determined that upon Francisco Sr.s death, Francisco Jr. held 50 percent of the voting A shares and 20
percent of the nonvoting dividend-bearing B shares. Each of his five sisters owned 15 percent of the B shares,
and Isabel retained 5 percent of the B shares and the remaining 50 percent of the voting shares. Voting control,
therefore, rested in the hands of the founders surviving spouse and Francisco Jr., the successor president.
And the ownership structure of Vega Foods included two classes of stock, responding to Francisco's
concern with the possible loss control of the enterprise in his absence. However, the problems started
appearing after the sons take over following to his fathers miserable car accident death in 1994.
A. STRENGTH:
Patient and healthy financial resource position and obligated and striving suppliers
Fransisca Jr.s educational background can be the good success resource being he was
Agribusiness graduated.
The demand for the products is positive and this gives the Business be growing.
Production of good quality products with Profitable business investment.
Knowledge of ruling parties being part of political interest and good relationship with the
government.
B. WEAKNESS:
It was clear that the Valle family was characterized by unhealthy one; tainted by secrecy,
lacks information, low levels of emotional intelligence, and lack of knowledge by most of
the family members.
Created a sense an autocratic leadership system,
Impact of zero-sum dynamics creation by and within the family members.
The lack of a trust hindered the development of the emotional intelligence in the family.
Lack of a steady information sharing between the family and the organization
Lack of clarity and organization in the ownership structure, clear direction, vision and
mission.
No Long term strategic plan
C. OPPORTUNITY:
D. THREATS:
The establishment of a trust catalyst to act as a triangulation point for the family and the
steady form of information sharing between the family and the organization would solve its
weaknesses and at least to harmonize the threats too.
The call for greater transparency of ownership structure, estate plan, and financial fortunes
of the company going forwards lots of releases.
V. OBJECTIVE
To establish and maintain a harmonious and united relationship among the family members
through creating a well-defined family council structure and crafting/drafting a family
constitution (as expressly agreed by all of the family members).
To make a clear separation between the family and the business by creating a family
constitution.
To ensure the profitability of the business, higher dividends and more reinvestment for long-
term growth and liquidity of shareholdings for the shareholders.
VI. ALTERNATIVE 1
The core values of any family business revolve around the System Theory: Family,
Management, and ownership. Hence, a harmonious relationship among the family members,
Management and Ownership must be established and sustained. This can be achieved through
building trust, mutual respect; constant open communication and transparency among and
between the three overlapping, interacting and interdependent sub Systems.
Open this option in the family council to start opening the voting shares to non-family members
specifically to members of the senior managers of the business. The family can still retain 51% of the
voting shares to keep control of the company while 49% of the shares could be distributed to non-
family members. This will open up the company to inputs from people who know the business. The
ideal effect of this is that, people that run the business should be empowered as well to have strategic
inputs on where the company is going.
VIII. RECOMENDATION
Our group recommends all the alternatives about to have a good relationship among the family
members that will make the company become successful. Especially the underline sub systems of the
systems theory are expected to bearing harmonious relationship among the family members,
Management and Ownership and must be established and sustained for successes of the family
business operation.
And we recall also Isabile to conduct family get together or family event that will draw together her
children and make each of them spend more time together.
Professionalize the business by having a clear organizational structure, well-defined job roles and
responsibilities and transparent financial reporting and Francisco should involve families to reduce
the lack of transparency and make it possible for the family to be more involved in the decision
making process and the succession plan of future generations.
If this was applied by the family, Francisco Jr. would have been able to realize what he was
compromising earlier and would have been able to reconstruct the company earlier.
Thank you