Creating a Family Business Harvard Case Solution & Analysis

Creating a Family Business Case Study Solution 

Central problem

The most obvious problem which Steven Rogers face is about the structuring of the new business. He intends to start the new business with his daughter but has little confusion about the role of her daughter in this new business. He wants to establish the business according to his daughter but at the same time also want to make the business effective or viable.

To overcome this problem, he suggested two options, first is to give the first employee president title to Akilah with reasonable entrepreneur salary along with the bonus which will be based on the property sale proceeds and take theCEO title for himself.

The second option which Roger is considering is about the split in the equity ownership of the company between himself and Akilah but the main problem in this option is that he is unable to determine the ratio in which the equity should be split.

Key Players and company’s decision making process

The key players of the proposed business will be Steven Roger, his daughter Akilah and his brother-in-law Edward Perkins. Although Roger’s main intention is to establish the business for his daughters but as his second daughter (Ariel) does not show any interest in the company therefore she will not be considered as the key player.

Roger will own the company and want to become either the CEO or the shareholder of the company. Currently he is responsible for negotiating loan or finance with the bank or finance provider. Furthermore, he is also responsible to purchase properties for the business.

Akilah is responsible for preparing proposals which will be used by Roger in negotiating loan along with this she is also responsible for locating and gathering information about the properties which should be bought by the company.Hence we can conclude that these both are responsible for the strategic issues of the business.

The last person Edward Perkins is mainly responsible for managerial work. He is a licensed electrician therefore will be responsible for rehabbing of the properties. Although he does not take part in strategic work but as Roger intends to develop business along with him therefore he is considered as key player.

Mission of the Company

Roger has a will that someday he will start a business with his daughters, to accomplish his will he intends to convert Wisconsin-based household products company (owned by Roger family from last five generations) into Roger’s Empire. The main aim of this company is to develop all sorts of real estate buildings like commercial and residential buildings. Furthermore, he also wants to create jobs for family members and local residents as unemployment has become a sever issue after the Global economic recession in 2007-2009.

Core Problem vs ancillary problem

The core problem or decision which Roger has to make is about the structuring of the company. Roger is confused about what role should be assigned to her daughter Akilah. He has considered two options either to make her the first employee (president) or to make her equity owner.

The ancillary problem which is faced by Roger is about the financing of the company. Roger borrowed bank loan to purchase the properties. Although the bank provided unsecured loan of approximately $4million but from the case we can analyze that the economic recession of 2007 mostly affected the housing business therefore the company may face problems in obtaining further loan.

The other problem which maybe faced by the Roger Empire is relating to choosing of the city to establish the company. There are two cities under consideration Chicago and Glenville.

Factors which influenced the problems

Internal:           Personal vision of Akilah as she wants to become an entrepreneur

Conflicts between Akilah and Perkin in relation to the choosing of city

Conflict between Akilah and Roger relating to financing sources and ownership

Backgrounds of different stakeholders

External:          Corporate Laws

Global economic recession as this increases the risk of business

Differences in the cultureof Cleveland and   Chicago.

Regulatory environment

Financial Markets

Possible Solutions to the problems

We can recommend some solutions by conducting SWOT analysis pertaining to different problems.

SWOT analyses is a framework which enables an individual to analyze both internal and external factors which can impact over a decision. Internal factors can be analyzed through strengths and weaknesses elements while external factors can be analyzed through opportunities and threat elements.(Team FME, 2013).............

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