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 8: Case Study: St Martin

Andrés Hatum

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


BRIEF OVERVIEW OF THE HISTORY OF ST MARTIN 1929–1999 In 1929, Juan and Raúl Martín set up what would become one of the most important companies in the edible oil industry in Argentina: St Martin.1 Nowadays St Martin is considered an important crushing company in the edible oil industry and ranks high among the top exporters in Argentina in terms of the value of its exports. The first generation tenure (1920–1973) was shaped by the work done by its two founders, Juan and Raúl St Martin. They saw the company reach many milestones, for example, when in 1943 the company first started processing oilseeds (mainly cotton seeds), or when in 1966 it incorporated solvent extraction, thus updating its production facilities and making them among the best in the world. The third generation tenure started right after the death of its founders in 1973. Paul St Martin, grandson of Raúl, became President. The third generation bypassed the second generation and took control of the firm. The explanation for this was very straightforward: The foundational stage was very long. The founders had a grip on the business for a long time until they died. With 40 years running the business along with their children, when the time came to change the tenure, the second generation of family members were tired and preferred their children to be in charge.2 (See stages of St Martin’s history in Figure 8.1.) This tenure witnessed the soya boom in the 1970s...

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