The Sustainability Frontier
Edited by Urs P. Jäger and Vijay Sathe
An organization must perform with excellence in multiple dimensions to reach the sustainability frontier, and this requires the choice of an appropriate governance and organizational structure. In Latin America, governance continues to rest primarily with the family, which may be a source of strength and continuity or a constraint on growth and innovation. A challenge that faces the increasing number of Latin American firms that pursue sustainability goals is how to reorganize the family business to achieve these goals without sacrificing economic performance. How to meet this challenge is the subject of this chapter. The first section of this chapter is a brief review of the basic forms of organizational structure and their interplay with business strategy. The second section traces the evolution of organizational structures in Latin American enterprises from their origins in centralized family businesses to the formation of multi-divisional family groups as the companies grew and diversified. The third section describes responses by these companies to forces for change: the creation of local business schools and the emergence of a new class of professional managers in the 1960s, the social convulsions of the 1970s leading to the ‘lost decade’ of the 1980s, and the development of an agenda of ‘competitiveness and sustainable development’ by local business leaders in the 1990s, which persists today despite economic shocks and social upheavals.
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