Strategic Entrepreneurial Growth and Enterprising Family Business

ENT602

Assessment 1 - Group Presentation

 1.
Introduction to Key
Characteristics H&M as a
Family Business

2.
Analysis of Family
Business Characteristics
through module contents

3.
Examination of
Strengths, Weaknesses
and Strategies

4.
Summary & Our
Recommendations

WHY ARE WE HERE TODAY ?

SUCCEEDING AT SUCCESSION
- 1947: Erling Persson opens the rst
store in Västerås, Sweden.
- 1972: Stefan Persson, rst son of
Erling, joins the business and leads
European expansion.
- 1998: Stefan succeeds his father’s
position as H&M’s chairman,
introducing a vast global supply
chain.
- 2009: Karl-Johan Persson, of the
3rd Persson family generation,
joins the company and grows the
empire from 2000 to nearly 5000
stores.
- 2020: Karl-Johan Persson
succeeds his father as CEO of
H&M.
- 2022: The family business is
valued at approximately $12.7
Billion
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 CURRENT POWER DISTRIBUTION
24%
Non-Family
42%
Non-Family
58%
Family
76%
Family

OWNERSHIP OF TOTAL SHARES OWNERSHIP OF VOTING SHARES

HIGHEST INFLUENCE IN DECISION MAKING REMAINS IN THE HANDS OF THE CLOSE FAMILY.
 External Shareholders

Erling Persson and The Lottie Tham

rest of the Persson family and
family dynasty related
companies
Stefan Persson
Karl-Johan Persson

Grandchildren and
non-biological Employees
family members
“[OUR] VALUES REPRESENT “THE H&M SPIRIT” AND THEY ARE
THE VERY SAME VALUES AS THOSE ON WHICH H&M WAS FIRST
FOUNDED BY MY GRANDFATHER ERLING PERSSON IN 1947. “
KARL-JOHAN PERSSON
CEO H&M HENNES & MAURITZ AB
BUSINESS & FAMILY CULTURE
- “When we do business “the H&M way” we do so ethically, honestly and responsibly.“ - Karl-Johan
Persson

- Family-like dynamic between all members of the organisation (reflected in the company’s values and
guidelines) Erling Persson (founder)

- Social Enterprising:
- Exceptional display of accountability and efforts toward sustainability and social causes in general -
“Conscious Fashion” is an essential part of the Family Business’ culture known as the “H&M Way / Spirit”

- Cultivation of a method called their “Open Door Policy”:

- Collaborative and straightforward approach in organisational culture results fluent communication.
- Sharing of opinion and self-expression are encouraged across all sections of the business to boost
effectiveness and efficiency.

Stefan & Karl-Johan

Persson
THE H&M FAMILY SPIRIT
- “Family Embeddedness”

- Strong family support between members that also reflected within the company’s
culture among employees and other non-family stakeholders

- Children play a crucial role in Future strategies:

- Involvement, education and training starts early
- A successful future succession strategy that proved to be effective
- High emotional and professional decision making support
- Family members became familiar with the entrepreneurial lifestyle at an early
age, encouraging their understanding and future pursuits to take part in the
business
SHARMA’S (2004) FAMILY BUSINESS FRAMEWORK
H&M can be categorised in the Warm Hearts - Deep pockets quadrant:

- The family business is a global success

- The company is highly profitable with harmonious family cooperation

(entrepreneurial spirit is reflected in the business’ succession history)

- H&M’s financial success, strong generational values and guidelines allowed the
business as well as the family to maintain its dominant market position through
turbulent economic and emotional times (including multiple successful
successions thanks to well trained and educated family members / successors)

- The family was able to maintain H&M’s position in this quadrant for a sustained
Figure 1 - Sharma (2004)

period of time, which is an accolade all family businesses strive for.

ANALYSIS
- No signs of nepotism or corruption - Indicated in the company’s Code of Ethics
through its Anti-Corruption Programme

- The family introduced the H&M Incentive Programme to reward long-term Figure 2 - Westhead and Howorth, 2007

employees and boost motivation

- maintaining positive organisational chemistry

- The organisation and its members make use of knowledge to adapt to changing
environment and produce a sustainable, competitive advantage for the business.

- An overall very carefully established and refined Family Business by the original
founder and family successors throughout generations.
Figure 3 - Westhead and Howorth, 2007
 CONCLUSION &
RECOMMENDATIONS
- The family business is not su ering from
internal management issues:
- H&M is a model example for other Family
Businesses when it comes to managerial
excellence and planning for the future.
- Outstanding history of succession through
3 generations; no dilution of power
- Strong values and guidelines are deeply
embedded into the company’s culture,
driving performance and e ciency at all
stages.
- H&M’s stock is mainly a ected by:
- The e ects of nancial crises on
consumer spending habits
- Negative reputation generated by the
environmental impact of the rate at
which their products are produced and
disposed.
- Increased focus on environmentally
conscious incentives are encouraged.
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Strategic Entrepreneurial Growth and Enterprising Family Business

ENT602

Assessment 1 - Group Presentation