Organizational Development for a Family Owned Business
Organization: Hightowers Petroleum Company
Hightowers Petroleum Company is a private company owned by Stephen Hightower. The company is an offspring of a string of family businesses originally started by Yudell Hightower, who relocated to Middletown Ohio in the 1940's, from the cotton fields in Mississippi. Yudell would eventually sell his janitorial business and invest the proceeds in his son, Stephen Hightower's business. Today the company employs three generations of Hightower's and continues to distribute gasoline, diesel, biofuels and related products and services throughout the United States, Canada, Mexico, and Africa.
The Mission/Purpose
The company's mission statement reads "Fueling America's Needs one Customer at a Time" and this is born from the fact that the owner started with one contract and one client. He knew that if he really concentrated all his efforts of delivering excellent service to that one client, who happens to be the State of Ohio, he could convince other clients (States) to give him work. He went about meeting with the various state department buyers in an effort to understand their frustrations with managing their fuel supply. He then went back to his office and worked on solutions for each problem and won the hearts of these procurement officials by being proactive and attending their individual needs. Today the company is still focused on being that "big supplier with a small feel to it" differentiator.
1. The Issues
Most businesses in the United States are family owned. Their contribution to the economy as well as to the immediate community cannot be ignored. The consumers of products and services offered by these businesses are fully appreciative of their efforts, however not all family businesses manage to continue to operate across family generations as most of them do not last long. Just a third of them manage to make the generational transition. This is made even more challenging given the complex dynamics that have to be considered in the running of family businesses (Andrews, 2010).
Performance in innovation is often considered crucial for a family business to compete favorably in the market. With growing competition, product cycles getting shorter and increased market segmentation, family owned businesses face the need to constantly innovate or they risk being out-competed. Strategic posture is used to refer to the way the management in an organization responds to demands from the external environment (Ozgener, Oout, Kaplan & Bikes, n.d).
An active posture denotes these people taking efforts deliberately to ensure good management of expectations of the key stakeholders. A passive posture is the complete opposite and the management does not take any measures to meet these expectations. Without a doubt, the two strategies greatly affect innovation performance in any family business (Ozgener, Oout, Kaplan & Bikes, n.d). Furthermore, it is absolutely essential that succession planning is paid attention to, in a family business so that there is smooth transition to the following generation.
Organizational Diagnostic Factors Analyzed
This case study seeks to analyze the 1) ownership; 2) structure; 3) politics; and 4) culture of the family owned business, Hightowers Petroleum Company. These are the most critical factors to be considered for the longevity and success of this business, and with the right interventions in these key areas, the necessary change can take place to develop a strong and prosperous organization.
1. Ownership
1. Assumption(s) and why it is critical to analyze
Bolman & Deal's theory is to assume that the organization represents a family and that the central concepts seek to examine assumptions around needs; skills and relationships. It further looks at the image of leadership to empower and the basic leadership challenge to align the organization's needs with the needs of the people. In this case-study its critical to understand how the metaphor of a family fits into an actual family business and how this impacts the family members and non-family members of this "family."
Areas like ensuring that the family maintains control of the business and the satisfaction of both the financial needs of the family and the business must be given attention. Family businesses that get to succeed from generation have open and clear ownership structures -- for instance, regulation on the trading of the shares. These regulations are often carefully crafted and can last for as long as 20 years (Caspar, Dias & Elsdrodt, 2010).
Some of these family owned entities are holding companies that are held privately but have subsidiaries that may trade publicly but the key areas are still in control of the family. A private holding company owned by the family ensures that conflicts of interest are avoided where institutional investors might push for conflicting demands. Most of these family owned businesses pay low dividends...
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