CASE STUDY 1

SEMESTER : SEPTEMBER 2021

ECB20603 SMALL BUSINESS MANAGEMENT

NAME : NURUL IZZAH BT ABD SAMAD JAMALUDDIN

NO ID : 62216119698

BTD10

• Brothers Sebastian and Alfonso grew up competing for their parents’ attention.
Everyone was surprised when they decided to go into business with each other.
• Alfonso was the reserved one. An engineer, he had developed the product that was the
basis of their venture. Sebastian was outgoing, a born salesman. He was CEO of the
company, while Alfonso worked in the laboratory, overseeing research and
development.
• The business took off, but building it into a national competitor required that all profits
be invested in product development and market expansion. After a few years, Alfonso
wanted to know where his share of the profits were. He knew sales were growing
exponentially.
• What was his brother doing with his money? One day, the brothers’ dad called and
offered to come in and run the business. He would make sure that everyone got their
fair share.
 • Question 1

What would you recommend to Sebastian at this point?

From case study 1, what I would recommend to Sebastian, in my opinion, he needs to

have good communication between him and Alfonso. Like any great relationship,
communication is the key to long-term success. Communicating your thoughts upfront is
important and so is the commitment towards maintaining a good relationship. Working
long hours inside and outside the business together at a familial level could take things
towards negativity if you do not effectively practice great communication. Since Alfonso
wanted to know where his share of the profit was, Sebastian should communicate with
his sibling on where his share of the profits was and what he is doing with the money.
Sebastian also must understand that his brother is justly concerned and needs to know
where the funding has gone.

He also needs to know the details of Alfonso's business agreement because they conduct
siblings or family businesses. Alfonso had no idea where the company's profit was being
misused. If Sebastian is unsure where the funds are going, he should request distribution
records for the firm's funds from the accounting department. He should explain well to
their staff what are the current issues faced by his brother to solve the issues immediately.

Not only that, he should be given that information because he is concerned about where
the money has gone. I would also have his father step in to help to calm both brothers
down. He also didn't know whether the company's profits were distributed evenly.
Furthermore, Sebastian as the CEO of the company must be firm in his decision-making.
He was promised the same profit if he agreed to join the company.
 • Question 2

What would you recommend to Alfonso at this point?

As we all know that Alfonso is developing the product because he is the engineer to their
business venture. He also needs to do a lot of research and development (R&D) and also
the prototype for their business which requires enough amount of money to reinvest in
their own company. For Alfonso in my point of view, I would recommend that he needs
to request a sample of the financial statement from Sebastian. It is to see the money flow
towards their company. He also can request a sample or strategic planning from
Sebastian.

He also needs to understand the concern shown by his dad. Family-owned businesses are
more innovative than non-family-owned businesses. Family-owned businesses
outperform non-family-owned businesses in human, social and marketing capital. One of
the strengthens of family firms is their relationships with stakeholders, that is, their social
capital. Moreover, a long-term relationship not only ties family-owned businesses and
stakeholders but confirms the high intensity of these links with a higher degree of
customization in their products or services. Resources do matter to family-owned
businesses. Family-owned businesses also have a stronger human capital resource base.
Next, I would recommend Alfonso to practice integrity. Personally, people of integrity
possess a strong moral compass as they keep their word, take full responsibility for their
actions, and hold to their moral codes even when they face uncomfortable situations. In
terms of business, the Business Dictionary describes integrity as "strictly adhering to a
code of morality, expressed in transparent integrity and complete harmony with what one
thinks, says, and does." Following that, a system's state in which this is conducting its
desired functionality without even being degraded or worsened by changes or
interruptions in its externally or internally environments. In this case, Alfonso needs to be
thorough with his explanation and tell his brother where his share of the profit was as his
brother knew that sales are rising fast.