Leadership Crisis at Algood Press: A Case Study

CASE DESCRIPTION The primary subject matter of this case is small family business management, specifically developing a strategy for leadership succession in a crisis situation. We also examine shared leadership or family top management teams that involve multiple family members in the top management and ownership of family firms. The case is appropriate for junior and senior level undergraduate courses. The case is designed to be taught in one class hour and is expected to require approximately three hours of outside preparation by students. The events described in this case are based on real world experiences, but all names have been disguised. CASE SYNOPSIS Carlton Algood heard the devastating words from his doctor: "With the treatment we currently have available to us, which is among the best in the country, I would say that we are looking at about one year (for you to live)." As a responsible small family business leader, Carlton made plans for Algood Press to survive without him. Carlton laid the groundwork for a management committee, composed of three family members and three non-family managers, to lead the company during his illness. Passing the management and ownership from one generation to the next is a daunting task for small family businesses. Succession is even more difficult when the process is shortened by the illness or death of incumbent family leaders. We trace the story of Algood Press from its beginnings in 1933 through three generations of family owner-managers to the present day. After Carlton's death, the remaining family leaders must decide whether to continue with the management committee, who should become president of the company to replace Carlton, and if they should extend the privilege of stock ownership to other company managers. INTRODUCTION Carlton leaned his head back against the wall as he sat awkwardly on the high examination table waiting for Dr. Lee to arrive in patient room number three. He felt uncomfortable wearing the required hospital gown because the air was cool and drafry in the doctor's office. The minutes passed by slowly. In spite of the cool air, Carlton began to perspire, which was also annoying because this made the white paper, which doctors always use to cover examination tables, stick to his legs and hands as he struggled to maintain some semblance of dignity. The test results were in and Carlton feared the worst. He knew that something was wrong because of the headaches and black-outs that had occurred with increasing regularity over the past year. Finally, after what seemed like an eternity to Carlton, he heard someone approach his waiting room and knock softly on the door. Dr. Lee solemnly opened the door and entered the room. Carlton observed that his doctor, a young man barely forty years-old, seemed grim and hesitant. "What's the news, doctor? Tell me the truth. There is no need to beat around the bush," Carlton said, getting straight to the point as he always did. "Mr. Algood, we have run all the tests and double-checked ourselves. There is no way around it. You have a virulent, aggressive form of cancer," explained Dr. Lee. "Well, I figured something was wrong because of all the headaches and the spells in which I passed out. What is the prognosis? Is there anything that can be done?" asked Carlton. "Yes sir, we will definitely try everything at our disposal, but I do have to tell you that this cancer is strong and spreads rapidly," replied Dr. Lee. "I see. I will try to fight it. I still have work to do. But I do need to know, if the treatment fails, how long do you think I have?" questioned Carlton. "Naturally, that is hard to say because there are many variables involved, but I understand that you do want an answer. With the treatment we currently have available to us, which is among the best in the country, I would say that we are looking at about one year," stated Dr. …