Family
Business Magazine E-Newsletter
September
4, 2007
Contents
1.
Estée Lauder's CEO confronts challenges, may consider selling.
2.
Walton family, Goldman Sachs to invest in Hyatt and help Pritzkers
restructure.
3.
Family firms must take care to avoid perceived favoritism.
4.
Choosing a facilitator to mediate family discussions.
5.
Preview of Family Business
Magazine's Autumn 2007 issue.
1. Estée Lauder's CEO
confronts challenges, may consider selling. William
Lauder, 46-year-old CEO and grandson of the founder of Estée
Lauder Cos., "faces growing competitive threats on a number of fronts,"
the Wall Street Journal recently
reported. Rival niche brands are increasing market share while newly
consolidated department stores have more clout and are putting pressure
on vendors like Estée Lauder. "Given the stockholding structure
of our family and the company," Lauder told the Journal, "we hope there will not be
anything that would force us to sell. We could choose at some point in
the future, if everyone agrees and it's in our best interest.
Obviously, it would have to be a very attractive financial opportunity.
But there's nothing we see out there that would be compelling from a
negative standpoint to sell." (Source: Wall Street Journal, Aug. 20, 2007.)
Return
to the top.
2. Walton family, Goldman Sachs to
invest in Hyatt and help Pritzkers restructure. The
Pritzker family is selling a minority stake in its Global Hyatt Corp.
to Madrone Capital Partners, an investment firm affiliated with
Wal-Mart chairman S. Robson Walton and his family, and Goldman Sachs
Capital Partners, the Wall Street
Journal reported. Madrone and Goldman Sachs will each invest
$500 million and receive a seat on Hyatt's board. The plan helps settle
a Pritzker family feud, the Journal noted.
"The arrangement was prompted, in large part, by a 2001 agreement to
split the Pritzker family's assets among 11 adult cousins over the
following decade," the article said. Cousins Thomas, Nicholas and Penny
Pritzker have been "engaged in a delicate balancing act, trying to
expand the family holdings while finding ways to divide the assets and
raise funds for the distributions." Hyatt chairman Thomas Pritzker told
the Journal that the family
has been "trying to build Global Hyatt into a world-wide, world-class
player in the hospitality industry. And we're also trying to
restructure the family entity. This transaction supports both of those
goals at the same time." The Journal
also noted that Hyatt "has taken some steps needed to make itself ready
to become a public company." (Source: Wall Street Journal, Aug. 30, 2007.)
Return
to the top.
3. Family firms must take care to
avoid perceived favoritism. The perception of favoritism
in an office can undermine employee morale and company performance,
noted a recent article in Knowledge@Wharton, an online publication of
the University of Pennsylvania's Wharton School. "The dilemmas are
acute in family-controlled businesses" because employees may view
family successors as underqualified, the article said. The report cited
the research of Wharton management professor Jennifer S. Mueller, who
found that "organizations seen by employees as unfair in pay, promotion
or other practices have higher rates of stealing, bad-mouthing and
other damaging behaviors." Mueller and colleagues found that a
situation in which "employees receive fewer resources from the
organization than they believe their performance warrants" will be
perceived as unfair and will foster counterproductive work behavior.
"When envy is added to the mix -- say, because of a supervisor's
preferential treatment of one employee over another -- the result is
magnified," the article said. (Source: Knowledge@Wharton, Aug. 8,
2007)
Return
to the top.
4. Choosing a facilitator to mediate
family discussions. Can your family mediate conflict on
its own, or should you hire an outside facilitator? "If you choose a
facilitator without consulting your children, they may view the
facilitator as your hired gun," warns family wealth mediator Gerald Le
Van in The Family Business Conflict
Resolution Handbook. "Involve them in the decision as to whether
you need a facilitator. If you do, involve them in the choice." Le Van
cautions that the facilitator you choose should have experience in
mediating family business discussions. "Family conflict offers huge
blunder potential for the well-intended amateur," he warns. "The best
facilitators understand both the 'hard side' and the 'soft side' of
business families. They know business in addition to understanding
family dynamics. A highly qualified family business consultant is
likely your best choice."
For more advice
on achieving consensus in your family and your company, see The Family Business Conflict Resolution
Handbook. Learn more about the book and see the table of
contents here.
Return
to the top.
5. Preview of Family Business Magazine's Autumn 2007 issue.
Subscribers to the print edition of Family
Business Magazine will receive their Autumn 2007 issue this
month. This edition features several articles on publicly owned,
family-run companies. Koss Corporation founder John Koss and his sons,
CEO Michael and VP John Jr., tell reporter Deanne Stone that while
running a publicly traded company has increased the family's exposure,
it has also helped with corporate discipline and estate planning.
Columnist Dan Rottenberg comments on the Bancroft family's sale of Dow
Jones & Co., and longtime contributor James E. Barrett offers an
analysis of what he sees as "the war against family control." Also in
this issue: a report on family business women in untraditional roles,
advice on managing real estate, and more. Visit our website for subscription information.
Return
to the top.
Get free access to our online archives of
more than 700 articles when you subscribe to Family Business Magazine. Learn how
to subscribe here. For information on
our money-saving Family Subscription
option, click here.
Is your e-mail address changing?
Unsubscribe your old address and subscribe your new one here.
Quick
Links:
The
Family Business Conflict Resolution Handbook
The
Family Business Policies & Procedures Handbook
Family
Business Magazine
No longer want to receive this e-newsletter?
Unsubscribe here.