The Vega Food Company
Case five gives us a prime example of a family business that was nearly broken due to poor communication between family members. The Valle family and their business, The Vega Food Company, recovered from the down times with strength and unity; however, it was not without the careful leadership of a few key family members. It is clear that without the intervention of Francisco Valle Jr., the company and family may have suffered a much different outcome.
Francisco Valle Jr. dedicated himself to fulfilling his father’s legacy. As the only son he slips smoothly in to his father’s footsteps by investing his time in his father’s company; while his other siblings had invested their lives in other areas. However, his sisters felt entitled to benefits from their father’s work. It is clear how they would get ...view middle of the document...
Francisco Valle Sr., although a good businessman, made many mistakes when dealing with family matters. He showed the characteristics of many self-made entrepreneurs, in that he resisted change in his business structure as the company grew. It is common for an entrepreneur to be weary of transparency when dealing with business matters. An entrepreneur, or founder of a business, has little time to implement accounting and financial systems that provide transparency to shareholders. Care must be taken in implementing new practices, as a company grows and family dynamics are introduced, so that all parties involved in the family business remain informed of financial information. Valle Sr. should have also made it clear to his children, from an early age, that they would have to invest time in the company in order to retain significant ownership; this was Valle Sr.’s opportunity to avoid future conflict, over ownership and compensation, between siblings. Valle Sr. did not invest time in guiding his children to be assets to the family business. This was a bad move for Valle Sr., if he had intentions to pass controlling ownership of the company to his children after his death or retirement.
Valle Jr. undoubtedly saved the company from this mistake by requesting the reorganization of the ownership structure, shortly before his father’s death. Francisco Sr. fulfilled his son’s request by dividing stock into voting stock and nonvoting stock. The desire to keep the family business whole was prominent in all of the siblings, with the exception of Mari. The joint efforts from Francisco Jr., Tere, and Isabel (as well as bringing in nonfamily experts to resolve conflict,) helped the Valle family to recover from their downtime. In the future the family should guide the next generation so that their goals may complement the culture of the business.