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Learning Outcomes:
Describe decision making process for complex issues pertaining to business environment both internally and externally. (C.L.O :1.1)
Define different perspectives and concepts of problem solving in diverse contexts and business situations. (C.L.O :1.2)
Demonstrate decision tools and employ appropriate analytical business models to break down complex issues. (C.L.O :2.2)
Assignment Instructions for Part-I:
Log in to Saudi Digital Library (SDL) via University’s website
On first page of SDL, choose “English Databases”
From the list find and click on EBSCO database.
In the search bar of EBSCO find the following article:
Title: “Case Study: When the CEO Dies, What Comes First: His Company or His Family?”
Author: by C. Maria Rex Sugirtha
Date of Publication: September 1, 2023
Published: Harvard Business Review
Assignment Question(s):(Marks 10)
Read the case study titled as “Case Study: When the CEO Dies, What Comes First: His Company or His Family?” by C. Maria Rex Sugirtha published in Harvard Business Review, and answer the following Questions:
1.Identify the main problem and subproblems of the case? [Mark 2]
2.Identify the causes of problem based on the following techniques? [Marks 3]
a.Cause of the problem- 5 Why Technique
a.Why-1
b.Why-2
c.Why-3
d.Why-4
e.Why-5
b.Develop a Cause-and-Effect Diagram
3.Develop a mind map for decision making, [2 Marks]
4.Write all the alternative choices of your decision. [Mark 1]
5.Make a decision and write the conclusion. [Marks 2]
Answers
1.Answer-300
2.Answer-300
3.Answer-300
4.Answer-300
5.Answer-300
6.Answer-300
7.Answer-300
8.Answer-300
Unformatted Attachment Preview
Case Study
When the CEO Dies,
What Comes First:
His Company or His
Family?
by C. Maria Rex Sugirtha
HBR’s fictionalized case studies present problems faced
by leaders in real companies and offer solutions from
experts. This one is based on the Xavier Institute of Business
Administration Case Study “The Turnaround of Café Coffee
Day,” by C. Maria Rex Sugirtha, which is available on SSRN.com.
144
Harvard Business Review
September–October 2023
I N THE B OARD RO OM , Priya
Gowda greeted four men in
suits—the creditors of her
husband, Partha, who had died
suddenly of a heart attack 10
days earlier. She felt numb and
exhausted—but also strangely
reassured by the setting. The past
week 1 had been spent dealing
with the funeral home, lawyers,
the media, and grieving family
members. She had barely slept or
eaten. But here, in the headquarters of Splendid Ice Cream, the
business she’d watched Partha
build from a small dairy farm into
a major Indian conglomerate, she
felt his energy animating her.
As sole heir to his majority
stake in the private company,
Priya was now its de facto CEO
and chairperson, responsible for
a diverse portfolio that included
hotels, real estate, and venture
capital investments as well as
dairies and ice-cream shops.
However, she’d learned only the
day before from Splendid’s lead
accountant that the company
was in a precarious financial
position owing to huge debts her
late husband had hidden from
his investors and from her. Over
the past year he’d been taking out
short-term, high-interest loans in
the form of debentures to pay off
Illustrations by ANUJ SHRESTHA
EXPERIENCE
long-term debt. Stress over the
firm’s finances had contributed to
his death, she suspected.
“Thank you all for coming
today,” Priya ventured cautiously.
“I wish we were visiting under
different circumstances,” replied
Vijay Gupta, the president of a
local bank. “We were all shocked
by Mr. Gowda’s death. 2 He was a
visionary entrepreneur. He was
also our friend and partner. But
he left behind a lot of debt, which
is why we’re here today.”
Priya opened the document
the creditors had prepared.
She had seen the figures the
day before, but they were still
shocking. While Splendid’s core
ice-cream business had been
growing steadily and profitably,
thanks to young urban Indian
consumers with global tastes and
disposable income, the broader
company now encompassed
more than 40 subsidiaries,
many of which were in the red.
Partha had clearly been trying to
channel funds from his cash cow
into unrelated ventures, but he’d
taken on excess leverage, and the
company now faced a liquidity
crisis and was struggling to find
the money to cover high interest
payments, taxes, and legal fees.
It had a net debt to EBITDA
ratio of seven—well above the
four considered a threshold for
concern. And loans worth more
than 40 million rupees would
soon come due.
“Priya, I’m sorry to be the one
to tell you this, but we must face
the music,” Vijay said. “You need
to find new sources of capital,
sell Splendid to a buyer willing to
take on the debt, or liquidate the
business.”
Coming into the meeting,
Priya hadn’t been sure what she
wanted to do. So it surprised
her when she blurted out, “No.
I’m not willing to give up my
husband’s legacy. I can save
this company. If you push me to
liquidate it, you’ll get pennies on
the dollar. Give me time, and I’ll
pay off 85% of the debt. All I ask is
that you freeze interest payments
for 24 months.”
Vijay leaned back. “Would
you give us a few moments?” he
asked. Priya nodded but didn’t
budge. This was Splendid’s boardroom—she had no intention
of vacating it. Vijay smiled and
signaled to the other executives
that they should leave the room
with him. A few moments later
the group returned. “We agree
in principle,” said Vijay. “We just
ask to see your plan in writing
and that you keep us regularly
updated on your progress.”
After showing the men out,
Priya sat down at the conference
table. She felt a steely resolve
building inside her. Opening
her laptop, she began typing her
first memo to Splendid’s 25,000
employees as their leader.3
“Dear colleagues,” she wrote.
“Splendid has a legacy worth
preserving….”
THE FAMILY’S PLEA
After all the heartache, today
was to be a happy day. Three
months after Partha’s death, his
and Priya’s younger daughter,
Anjali, was getting married. As
Priya and her older daughter,
Garima, watched, Anjali sat on
the hotel bed while a makeup
artist attended to her Solah
Shringar, the Indian beautifi
cation ritual.
When a mobile ringtone
sounded, the sisters looked up
in alarm. “Ah, this is our PR
firm,” Priya said. “It’s about that
article on our turnaround in
Business Today. I know I said no
work today, but I really should
take this, since it will go to press
tomorrow, and I need to make
sure they have all the facts
straight. It will just take a min—”
Suddenly, Anjali stood, tears
welling up in her eyes. “Garima,
please take the phone from Mom.”
Case Study
Classroom
Notes
1. Some argue
that demands
on grieving
workers are
unrealistic and
that firms don’t
make enough
allowances for
mourning. In
2016, for example, U.S. employees received,
on average, four
days of bereavement leave.
2. Grief.com’s
David Kessler
says to avoid
these phrases
with colleagues
who have lost
loved ones: “She
lived a long life.”
“I know how you
feel.” “Aren’t you
over him yet?
He’s been dead
a while.” “You can
still have another
child/remarry.”
“Be strong.”
3. While 20% of
all businesses in
India are owned
by women, they
are overwhelmingly singleperson enterprises, and many
are in fact controlled by men.
Harvard Business Review
September–October 2023
145
4. At what point
is it irresponsible
to continue a
doomed business? Should
an entrepreneur
always fight to
keep a business
alive?
5. In 2012, an
Australian
palliative care
nurse published
a book about
the five most
common regrets
her patients
expressed at
the end of their
lives. In the top
five was “I wish
I hadn’t worked
so hard.”
146
Her sister sighed, reached
over, and hit dismiss on the
screen.
Confused, Priya looked back
and forth between them. Now
Anjali was crying.
“Mom, I’ve hardly seen you for
months. I know how much you
want to save Splendid—and dad’s
legacy. But it’s all you’ve thought
or talked about since he passed.
You’re running yourself ragged.
Today is my wedding day, so for
once could we focus on something other than the company?”
Priya felt herself stiffen. “I’m
just trying to keep the business
going, to honor your father…”
“We know, Mom,” Garima
chimed in, with more melancholy
than anger. “But Anjali is right.
And liquidating the business
would give you more than enough
to retire and even an inheritance
to pass on to us and your grandkids 4 one day.” Garima had two
sons in preschool, and Anjali had
Harvard Business Review
September–October 2023
long joked that she planned to
get pregnant on her honeymoon.
“There’s no guarantee that you
can rescue Splendid, and if you
do, it will take years and years,”
Garima continued. “Do you
really want to spend your sixties
in business meetings instead
of with family and friends? 5
How much have you seen your
grandsons lately? Have you done
any walking with your neighborhood ladies? Are you sleeping
at all? We’re worried about your
health. And we can’t lose another
parent.” Now tears dripped down
her face, too.
“You’re not going to lose me,”
Priya said, pulling both daughters into a hug. “Don’t cry, my
sweeties. You’re right that the
business can and should wait
for today—and other days, too.
I’ll try to be less single-minded
going forward. But don’t discount your old mom, either. I’m
tougher than you think.” She
untangled one arm and flexed it
like a bodybuilder to get Anjali
and Garima to smile. When they
did, she patted them each on
the back. “OK, now. Let’s not
keep our guests and the groom
waiting!”
THE COO’S UPDATE
Priya sat in her office and looked
at the financial documents
in front of her. In her 40-year
marriage to Partha, the pattern
had always been the same. He
would charm everyone he met
and regularly bring new friends
home for dinner, staying up into
the small hours of the morning
eating, drinking, and laughing
with them. Then, when they were
gone and Partha slept, Priya and
her household staff would do the
cleaning up.
And now it seemed he had left
her another mess to deal with at
Splendid. So what was driving
her to mop it up? Love for her
husband? Marital duty? Resentment? The need to tie things off
and move on from him?
She heard a knock at the door.
It was Tasneem Rangwala,
Splendid’s long-standing COO,6
who had been increasingly
sidelined in the last few years of
Partha’s tenure—something that
should have been a warning sign
to Priya and the board. Talented
and honest, Tasneem wouldn’t
have signed off on the highinterest debt.
Now, however, she was Priya’s
right-hand woman, having
helped articulate the turnaround
vision and begun to execute on
it with enthusiasm. The duo
had worked tirelessly to sell
off noncore assets, cut costs,
renegotiate debt, and streamline
operations while also trying to
reinvigorate the company’s core
business by opening new stores,
replacing displays, and launching
a campaign to reaffirm Splendid’s
position as India’s favorite icecream brand. Tasneem had also
brought some new ideas to the
table, such as diversifying into
cold chain logistics—the transport of temperature-sensitive
products—which could not only
create a new revenue stream
for Splendid but also help solve
India’s food waste problem.
“Is now still a good time to
discuss the latest financial statements?” Tasneem asked.
“Of course,” Priya said. “Let’s
sit together on the sofa.”
Tasneem opened her laptop
and pulled up a spreadsheet.
There was some good news.
The net debt to EBITDA ratio
had dropped from seven to
five. Revenue had increased by
8%. Customer satisfaction had
improved by 20%. However, the
company’s operating margin
had decreased by 2% because of
higher costs associated with the
turnaround, and cash reserves
were dwindling.
Priya sighed, thinking back
to Garima’s questions about how
long it would take to turn around
Splendid—and if it could even be
saved. “Tasneem, what do you see
as our next steps?”
“I think we’re making slow
but steady progress, so we should
keep on our path. We still have a
few more real estate holdings and
noncore interests to sell off—we
just need to wait for the right
buyers. We can set up meetings
with the bankers to walk them
through our thinking, and I think
they’ll see that we’re nearly on
track to meet your 85%-in-twoyears promise. In the meantime
I wonder whether it’s time for us
to work up a pitch deck for the
cold chain idea, 7 organize a road
show, and drum up some fresh
capital.”
Priya’s phone dinged with
a text message. It was Garima.
6. In 2000,
48% of S&P 500
companies had
a COO; by 2018
only 32% did.
But COOs are
making a comeback. As of 2022,
40% of leading
companies had
one, and the
role has become
bigger and more
transformative,
according to
McKinsey.
7. Should a
struggling business continue
to try to innovate
and invest
in R&D?
Harvard Business Review
September–October 2023
147
EXPERIENCE
“Can you still babysit tonight?
We need to leave for our dinner
in a half hour.”
Priya looked at her watch and
felt a surge of guilt. She’d lost
track of time and would have to
leave within the next 10 minutes
to get to her daughter’s house
when she’d promised to. “On my
way!” she texted back.
“Tasneem, I’m so sorry. Can we
pick this up tomorrow?”
“Sure,” the COO responded.
“Shall I go ahead and set up a
meeting with Vijay for later this
week? And with the REIT that was
interested in acquiring the technology park? And start putting
together that pitch deck?”
Priya felt a wave of exhaustion
wash over her but mustered a
smile as she responded, “Yes,
please do. Thank you.”
After the COO left, Priya
hastily gathered her things from
her desk but then found herself
pausing to stare at a framed
picture of Partha. She realized
she hadn’t wept since he’d died—
not even tears of joy at Anjali’s
wedding.
“I’m still mad at you, but I love
you and miss you,” she said to
the photo, a sob catching in her
throat. “So tell me, Partha: What
do you want me to do?”
C. MARIA REX SUGIRTHA is
an assistant professor of
finance and HR at Xavier Institute
of Business Administration (XIBA),
St. Xavier’s College (Autonomous),
in Tirunelveli, India.
148
Harvard Business Review
September–October 2023
Should Priya try to save
Splendid, let it go, or find
a third way?
The experts respond.
CHARLES READ
is the president and
CEO of GetPayroll.
Priya faces a hard choice:
liquidate or sell the firm,
which could make her
relatively wealthy, or strive
to save it and upset her
daughters.
Liquidation seems like the easy choice,
but it would have its own set of repercussions. In India bankruptcy has a
significant social stigma and often
leads to personal and professional
ostracism. But more than that, I sense
that saving the company is Priya’s true
calling. Too often talented women opt
out of leadership roles because of family
responsibilities or societal expectations.
If Priya steps away from the company, it
will be a loss not only for her personally
but also for the business world.
That isn’t to say her journey will be
easy. I’ve faced the profound grief of
surviving the loss of both my wife and
my daughter while running a company.
I also know the stress of managing a
cash-strapped business. Navigating all
that at once requires immense strength
and resilience. I cannot emphasize
enough the importance of self-care in
this context. For instance, I know from
my own experience that Priya is likely
to find dates like Partha’s birthday and
their wedding anniversary overwhelming, so it might be best to avoid being in
the office on such days. The good news
is that it does get easier. The sun continues to rise. Life overtakes mourning.
In addition, as a widow Priya might
be able to open hearts and doors for
Splendid that would otherwise be
closed. Her creditors are human and
not impervious to her situation. Their
sympathy could translate into increased
patience, giving her an advantage in
the quest to save the company. Priya
should set up regular meetings or calls
with them—perhaps weekly or monthly.
You want to overcommunicate with
creditors; never hide from them.
Most important, Priya needs to have
an open and honest conversation with
her daughters. They may yearn for her
to assume the role of doting nani
(grandmother), but she seems drawn
to a different path. She needs to explain
to them that she has chosen to be a
warrior. She loves them dearly and will
make time for them on Diwali, birthdays, and other special occasions, but
for now she is primarily focused on the
business. This is not a negation of her
affection for them but a testament to her
strength and determination to carry on
her late husband’s legacy.
SARAHJANE SACCHETTI
is the chief business
officer of Cleo.
Priya’s focus on firefighting
to save Splendid, while
commendable, is causing
her to neglect the task of
reforming its governance,
the most important step to
getting it back on track.
To start with, a detailed report that
exposes the root causes of the company’s missteps is needed. Unanswered
questions, such as how Partha’s actions
went unchecked and why his COO felt
voiceless, must be addressed. That will
pave the way for an environment with
greater transparency and accountability
and a “no surprises” rule.
Second, it’s vital for Priya to avoid
the myth of a corporate savior, which
led Partha (and Splendid) astray and
could recur if she’s not careful. Instead
of heroics, she should invest in building
a strong team that can work to prevent
misconduct and ensure higher levels of
transparency. Private companies that
let charismatic founders run unchecked
often become cautionary tales, as
Theranos and FTX illustrate.
She should also consider a co-CEO
model. That approach was instrumental
for me when I had to step back from my
CEO role and become a caregiver for a
parent with ALS. I’d recommend that
the co-CEO be an external hire—someone from industry who can bring a fresh
perspective and dilute the cult of personality that grew up around Partha and
could be re-created with Priya. While
this move may risk alienating Tasneem,
it will prepare the organization for
future contingencies and transitions.
Last, Priya’s determination to shoulder the burden of Splendid’s survival
is not only damaging to her health and
family but also potentially detrimental
to the company. Traditional perspectives might suggest that she should just
lean in to the work and let her mental
INCLUDES CUSTOMIZABLE TOOLS AND
and family healthTEMPLATES
suffer, but
soFORMATS
IN doing
MULTIPLE
can be unsustainable for her and risky
for the business. The fact is, about
70% of U.S. caregivers are women, and
the percentage is even higher in other
countries. Rethinking the executive
team with a sustainable model is a
solution that can help all leaders—not
just female ones—balance competing
demands and future-proof a company.
At Splendid it might better ensure longterm success.
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