The Vega Food Company

1067 Words5 Pages
1. What are the key facts of this case? And, what, in your opinion led Mari to sell her shares? Building trust and commitment inside a family business is essential in order to ensure the survival of the business. In this case, the lack of communication about the business financial information and a poor organized structure derived into a conflict characterized by broken trust in Francisco Jr. as the president of the company. For this case, we considered the following key facts. Francisco Jr. has been working the business for more than 20 years. He was the natural successor to his father as the president of the company and also he was in charge of a Senate seat. His expensive way of life, his focus on politics, and the lack of communication inside the company generated doubts among his sisters and mother, whom constantly complained about not being involved enough and not having the same benefits of Francisco Jr. Francisco Jr. and his sister Mari were in conflict. That is the reason of why he called the family council. Francisco Jr. felt that these problems were interfering with his management of the company. On the other side, Mari was concerned about her future and the security of her own young family. She did not feel that his brother was managing correctly the business. Also, there was not a clear structure for the company. There was not much evidence about respect for titles, hard work, institutions and formality. Accounting processes were unsophisticated and were an obstacle to obtain accurate information on time about the business. Also, dividends had been distributed infrequently which decreased the commitment of the members. For the third family council on May 1998, Mari sent her attorneys to put more pressure on Francisco Jr. for fuller disclosure of corporate financial information. Francisco was very upset and worried about that because of the
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