Accounting Case 10 The founder left equal amounts of Grandview stock to the five

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Case 10: The Cousins Tournament

Suggestions for Use

This is a longer but still introductory case in the book aimed at generating a

discussion about a unique and central theme of family companies, CEO succession. The

student is asked to assume the role of a family business consultant to the CEO, the

Executive Brief

first time about retiring as president of Grandview Industries. Al, 67, is standing on the

back porch of his rambling Southern California home, sharing brandy and cigars with his

for one m

privately. But he and Al had separate responsibilities, and conflicts were seldom evident.

In more recent years, the two brothers had developed a greater appreciation of each

concerns about the future. Arnold, the other brother, argued that Al should remain the

CEO for another 8 or 10 years. Germaine, the other sister, joked about calling her lawyer

and selling her stock before morning.

Al decided to create a succession committee to lay out a plan for selecting the next

CEO. Peter Franklin, the owner of a large freight shipping company, and the first non–

family member added to the Grandview board in 1980, agreed to serve. Peter knew

At the first meeting of the succession committee, the members agreed that no one

individual stood out as the obvious choice. But Al did not want to continue as president

after the end of the year. Therefore, Morris agreed to take over the CEO role for an

Discussion Questions

1. What are the central challenges facing Al Blanchard, Grandview Industries, and

the Blanchard family.

Al Blanchard Succession. The transfer of power in an orderly way (in a way that

corporate control and business strategy favor the successful continuity of the

2. What does your answer to question 1 say about what is truly unique about

family-owned businesses?

Succession is the greatest challenge to family businesses. The overlap of family,

management, and ownership in family-owned and family-controlled companies,

3. What would you recommend Al Blanchard do, in his leadership capacity, on

behalf of Grandview Industries and its shareholders?

Initiate a series of family meetings (or a family council) to begin to educate the

Blanchard family about the succession and generational transition challenges.

4. What should the process for choosing the next president be?

See the information in the previous answer. Also:

Expand the search, perhaps using a search firm, to include candidates from

outside the family and the firm. This will create –

Sample Paper on The Cousins Tournament

Assignment: As a family business consultant to Grandview Industries and the

Blanchard Family, what would you recommend Al Blanchard do to promote a successful

succession and family business continuity?

Grandview Industries and the Blanchard family are far from ready for

succession. Neither has considered the subject of succession to this point.

Convincing Al Blanchard that he has a lot more work to do leading the

transition across generations before he can retire is not going to be easy, but it

has to be done. Delegating CEO leadership to his brother Morris seems out of

the question. Their history is one of sibling rivalry, even the next generation

appreciates that. Morris taking over on an interim basis would probably lead to

his branch of the family wanting to even the score a little bit because of their

sense that Morris has been under-appreciated in the family. This could result in

win-

unity and the commitment to family business continuity.

Grandview Industries, with its board and succession committee, can

continue making progress in strategic planning, successor development, and

successor selection over the next couple of years. Then and only then could Al

transfer power to either an appointed successor or a bridging nonfamily CEO

and have corporate control and business continuity assured.

Company ownership should be looked at with regards to the next generation.

It is probably not too early to adopt shareholder buy sell agreements in order to

The committee and the board can help identify and analyze more facts related to

the successors and company needs and make the decision appear more objective

and just, but will not be able to nor should it make the decision on its own.

Given the nature of the case, we need to know a lot more about Joe