Family Business-Assignment 1

Case analysis questions:

1-Should Robert remain chairman of ABC, or should he resign and give one of
the family members a chance to lead and run the company?
With respect to me, and with respect to what I have read in the article:
Robert worked extremely hard, and he has spent more than 8 years
working for the company. Maurice Fadel (his father) set up a trust in 2002 that
designated Robert as his successor, and in May of 2009, Maurice revised the
trust, giving Robert full control of the board as well. In June 2009, Maurice Fadel
passed away, and according to the provisions of the trust, Robert became the
chairman and CEO of ABC for a period of five years, with the possibility of
extending his term by an additional three years, on condition that he had the
support of at least one of his brothers. In his role, Robert set two main goals for
the company. First, he wanted to turn ABC into a professionally managed
organization at all levels. Second, he wanted to invest in long-term projects that
would expand the business.
Robert Fadel has worked extremely hard and given his all to ABC mall. He fixed
all the communication and sales. He worked on improving the pay structure of
the management team and he changed the management culture in whole
company by recruiting the right HR person. He established a solid board of
directors, he spent loads of hours searching for the right people to recruit them
and give them well earned position. He failed many times with his choices in the
people he recruited but he never gave up, he kept working hard. Moreover, he
created a shadow stock program that attracted talent from the outside and
reduced turnover… “Robert had one loved called ABC, and his second was
politics.” I think his top priority is ABC and not his wife and kids.
Robert persuaded Hariri to sell the land in Verdun that would allow Hariri to
become the owner of the mall.
In a board meeting they announced how they saved $100 million. They spent
1.3$ million instead of $1 million to refurbish the Villa for the new headquarters.
At the same time, they announced that the cost of setting up Verdun was not
$300 million, but only $200 million so they saved a $100 million. But they insisted
on talking about the $300,000 overspend on the villa for not less than 15 to 20
minutes instead of talking about how they saved $100 million in Verdun.
In my opinion, he was the best between his brothers because no one of them
worked like him. I don’t think that they will be able to even do 10% of what he did.
Robert Fadel failed many times in work but he still fight and worked very hard to
achieve his goals and that is why I believe in Robert that he could continue.
Robert achieved both his goals by the end of his eight years.
So with respect to me and what I read, I believe that Robert is the right fit for
chairman of ABC, but he chose the right people to continue the journey like
Frank Kunterman. And no one of his brothers should take his place in this
position.

2- Robert would need to get the approval of two of his brothers to secure
the continuation of his chairman role in ABC, but was he ready for another
fight?
Robert was the second oldest of four brothers. His father Maurice gave the
company for Robert gave him the CEO and allowed Robert to appoint the
majority of ABC board members giving him the control of the board. If Robert
wanted to continue his journey and secure the continuation of his chairman role
in the company he need to get the approval of two of his brothers because it’s
the law of the company. Maurice Fadel amended the bylaws of the trust in a way
that give him control of the board. Maurice chose that the future CEO and
chairman of ABC will have 8 years with no one interrupting and it was a good
idea because it ended a lot of family problems.
Some of the family business in Lebanon gave the CEO to the oldest brother.
Usually, the first born takes care of everything including the businesses and hold
all the responsibilities, the family problems… But if we look back to Fadel family
when the father Maurice Fadel passed away the CEO was announced to be to
Robert the second oldest of four brothers.
Habib is the oldest of the brothers who had a BA degree from Beirut University
College. He worked in ABC’s marketing for a short period of time in 1998 but he
realized that his passion was in the art, so he moved to Los Angeles to study
filmmaking. Off Corse, Habib was hard for him to not be chosen by his father to
take care of the work. So from Habib’s prospective we decided that he was
jealous, wanted her brother to fail and leave the company so that he can take his
place and he tried to let the others brother not to vote for him. While Robert tried
her best and worked hard and also he made a promise not to take any decision
without the approval of his brothers and his mother. He tried to strike a healthy
balanced between the company and the family members. And I see that Robert
was the only brother out of the four who wanted the best for the company.
I believe that Robert was not ready for another fight after all the hard work it was
enough for him, especially when he announced Kunterman as the new CEO and
Attalla talked about how they directly knew that he was done when he
announced Frank as the new CEO.
3- Which of the other family members could feasibly take on the role? Or
should they perhaps be thinking about transitioning to a non-family
members the next chairman?
No one of the other family members could feasibly take on the role. I don’t see
any of the family members when I read the article that could feasibly take on the
role. The oldest brother never wanted the best of the company always wanted to
find wrong things in Robert and he wanted her brother to fail in his work and take
her place. The other brother Karim that he moved to US to start a new life. And
the youngest one Ron who was so smart and so cleaver. Ron only cared
because he wanted to return a favor for Robert. Robert helped him and bought
shares from his business but with only on voting for the return which was the
voting for the extra 3 years that gave him 8 years.
The only one that helped the company which is outside the family was Frank.
Robert chose Frank who was a family friend who helped the company so much.
He created a full program for the company he was very educated, he spend
plenty of time with Robert to the point that they both spent every day working and
studying.
I believe that the mother Diana can take a big role in the company. Diana was
making many activities but these did not stop her from being part of the family
business. She managed to do something Robert couldn’t do which is sharing her
time for and to everyone. She is supermom and strong woman that works hard.
She loved her family and was always beside them to solve the problems. She
never accepted her kids to fight and never wanted her husband to raise them
fighting for the CEO’s positions.
4- How would a family business with a brand new CEO do without a family
member at the top steering the company?