Adaptation or Expiration in Family Firms

Adaptation or Expiration in Family Firms

Organizational Flexibility in Emerging Economies

Andrés Hatum

Andrés Hatum explores determinants of organizational flexibility in this examination of four family-owned companies, two flexible and two less flexible, from the edible oil and pharmaceutical industries. By means of an innovative analysis – including longitudinal analysis, coding analysis, statistical analysis and the use of original display charts – he illustrates the determinants of flexibility and sheds light on the process of transformation and adaptation of family firms, an area that has not yet been the subject of extensive empirical inquiry.

Chapter 7: Case Study: AGD Aceitera General Deheza

Andrés Hatum

Subjects: business and management, entrepreneurship, family business, organisational behaviour


BRIEF OVERVIEW OF THE HISTORY OF AGD 1948–1999 Founded in 1948 by Adrián Urquía, AGD (Aceitera General Deheza) transformed itself from a small oil-processing factory into the biggest indigenous firm in the industry. Nowadays AGD is a leading edible oil export company and also one of the frontrunners on the retail market for bottled oil with several successful brands. It ranked 40th among the 1000 top companies in terms of turnover in Argentina in 1999 (US$841 million), and it is considered the fifth most important exporter in the country (Revista Mercado, 1999). After the changes the country went through in the 1990s, the company was able to adapt and thrive in an industry in which most indigenous businesses did not manage to survive. Nevertheless, the roots of AGD’s success do not date from the 1990s but long before, in its thinking ahead about ways of improving technology, scale and cost-effective measures – a trio of decisions that would prove to be the right combination for survival and success. The first generation tenure of the firm lasted 37 years: from 1948 to 1985, when the founder bowed out from the executive direction of the company and became its President. This foundational period can be split into three sub-periods: the founding period from 1948 to 1968, the crisis in 1968, and finally, the consolidation of the company between 1968 and 1985 (see stages of the history of the firm in Figure 7.1). The first generation tenure is shaped...

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