Case Detail

Case Summary

Plymouth Tube Company: How to Build Ownership Consensus

Case Number: 5-214-250, Year Published: 2016

HBS Number: KEL961

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Authors: John Ward; Carol Adler Zsolnay

Key Concepts

Board of Directors, Communication, Corporate Governance, Decision Making, Family Business, General Management, Growth Strategy, Leadership, Organizational Behavior, Risk Management, Strategic Planning, Team Building

Abstract

Plymouth Tube, a family business, was a manufacturer of precision tubing and extruded shapes for aerospace, desalination, medical, mining, energy, and water industries globally. Founded in 1924, as of 2012 it employed 770 people at thirteen plants in seven U.S. states and had sales of about $240 million. The family had twenty members across three generations, including spouses. The board was composed of eight members, three from the family and five who were independent. Stacy, age 30, was the only fifth-generation family member working for the company. Her father, Van, age 64 and a fourth-generation member, had been in the business for forty years and had succeeded his father as president, CEO, and chairman.

In early 2013, management presented a very large expansion project that was riskier than previous recent investments to the board, and requested the board's approval. Independent board members asked Van to obtain feedback from the family about the proposal. Van asked Stacy to direct the process for informing the family, asking for their input, and communicating it back to the board.

How should Stacy conduct the process? What should be done with the information once it has been gathered? Should family members be involved in this type of business decision? Based on the information given in the case, is this a good investment?

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Compare views of a business opportunity depending on one's role in a family business
  • Create process for obtaining feedback from family members about an ownership decision
  • Frame proposal to gain support within a family
  • Prepare family members for ownership and board roles
  • Consider non-financial perspectives of a significant investment decision
  • Debate whether family shareholders should speak with one voice or let their differences be known

Number of Pages: 10

Extended Case Information

Teaching Areas: Family Business, Strategy

Teaching Note Available: Yes

Geographic: United States

Industry: Industrial manufacturing

Organization Name: Plymouth Tube Company

Organization Size: Medium

Decision Maker Position: President, CEO, and chairman

Decision Maker Gender: Male

Year of Case: 2013