University Case Study: Sekar Group Leadership and Succession

This case study analyzes the leadership and management dynamics within the Sekar Group, a family-owned business in Indonesia, focusing on the transition of leadership from Harry Susilo to the next generation. The report examines the challenges associated with this succession, including potential gaps in the new generation's knowledge and skills, corporate social responsibility issues, cultural changes, and power conflicts. It explores Susilo's moral leadership approach, influenced by both Eastern and Western cultural perspectives, and its impact on the company's ethical practices and community engagement. The analysis delves into specific issues such as leadership gaps, CSR challenges, and cultural adjustments, offering recommendations for effective succession planning, employee training, and the promotion of sustainable practices. The report emphasizes the importance of selecting the right successor, such as Welly Gunawan, who possesses the necessary skills and experience to guide the company forward. The conclusion underscores the need for a smooth transition that preserves the company's values and ensures its continued success in a competitive business environment. This assignment, available on Desklib, aims to provide a comprehensive understanding of leadership, succession, and ethical considerations within the context of a family-owned business.

Running head: MANAGEMENT
Leadership and management
Name of student
Name of University
Author note

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Executive summary
The report presented facts and ideas about the management of leadership based on the
context of a family owned business named Sekar Group. Susilo used to manage the business
but soon it was time for him to hand over the responsibilities to his family members, i.e., the
new generation members who could be the successor to him. It was found that the major
issues were associated with the poor knowledge and skills about the corporate environment
among the new generation members, which might create complexities for the organisation to
survive in the competitive business environment. To focus on the issues related to
sustainability, CSR and other related issues, Welly should be the right choice as he had
acquired a Bachelor degree and even worked as a marketing manager, which could be
suitable for managing the business and guide the team members in the right direction too.
Based on the recommendations, it could be assessed that focus on sustainable measures and
for promoting leadership programs and employee training should make the members capable
of adjusting to the change in culture and organisational functioning, furthermore allow the
manager to keep them motivated and interested to perform to their potential as well.

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Table of Contents
Executive summary....................................................................................................................2
Introduction................................................................................................................................4
Background of the company...................................................................................................4
Identified issues......................................................................................................................5
Analysis......................................................................................................................................6
Leadership issues....................................................................................................................7
Corporate social responsibility issues....................................................................................8
Cultural change issues..........................................................................................................10
Power conflict issues............................................................................................................11
Sustainability issues..............................................................................................................13
Recommendations....................................................................................................................13
Conclusion................................................................................................................................14
References................................................................................................................................15

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Introduction
The aim of the report is to discuss about the various aspects of leadership and
management considering the business organisation named Harry Susilo Private Ltd, also
known as Sekar Group at present in Indonesia. The organisation has been one of the major
moral leadership and family business succession that has managed to create a sustainable
position within the industry by adopting principled leadership and succeeding the business,
though with the consideration of both Eastern and Western cultural perspectives related to the
management of values and ethics in business. The report will discuss about the ways moral
relationship and principled leadership have been managed to meet the corporate social
responsibilities and even prioritize on the overcoming of issues associated with the
management and leadership based on the organisational context. It will also help in
identifying the issues that may be faced after the retirement of Susilo and also discuss about
the ethical leadership concepts (Renz, 2016). This will allow for fulfilling the corporate social
responsibilities and at the same time, overcome cultural issues, power conflict issues and
sustainability issues. Lastly, few recommendations will be provided, which can facilitate
leadership management and ensures better control and authority over the management of
human resources, furthermore maintain sustainability through utilisation of bottom line
techniques as well (Goetsch & Davis, 2014).
Background of the company
Harry Susilo Private Ltd is a major business organisation that used to manage various
business divisions and it started its operations with just five employees and at present, it has
been renamed as Sekar Group, which consists of more than 20000 employees and is
considered as a major company on the Jakarta Stock Exchange. The organisation has been
specialised in various sections including food, agriculture, mineral products as well as real
estate management. The company has managed to generate a revenue of more than US$1

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billion annually in spite of being a family owned business. Susilo was satisfied with the way
family harmony has been maintained by relying on the power of love to manage integrity and
at the same time, fulfil the roles and responsibilities towards the people and community at
large. Harry Susilo’s ethical leadership style also helped him to manage integrity and trust by
respecting the ethical values, beliefs and rights of others, according to the Western values and
beliefs, which facilitated the management of integral concepts such as honesty, trust,
consideration, fairness and transparency (McCaffery, 2018). Utilitarianism ethics also have
been managed by Susilo to undertake a suitable action based on the implementation of right
organisational policies and principles required to perform the tasks and at the same time, take
into account the interests and needs of others. These major ethical concepts contributed to the
moral philosophy and good leadership, which allowed the company to grow and expand its
operations by contributing to the corporate and social responsibilities largely too
(Amanchukwu et al., 2015).
Susilo’s approach to keep Harry motivated and encouraged further helped in
centralisation of process of decision making, which also resulted in various meetings and
conferences for sharing individual ideas, views and opinions and ensure right decision
making. Susilo was also engaged with charity work such as running a local orphanage and
even encouraged the Eastern culture to meet the local needs of people further managed
harmony, trust and openness all throughout.
Identified issues
Susilo was concerned about the highly competitive business environment, as with the
increased global competition along with rapid growth and development of the organisation,
there would be high competition. There could be issues and challenges of gaining success
because the younger generation, which has been handed over the responsibilities, may not be
knowledgeable and skilled enough to manage the workforce properly. This could affect the

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proper management of leadership and hinder successful business functioning (Thorpe,
2016).Once Susilo handed the roles and responsibilities to the new generation of members,
they might not be able to handle the corporate social responsibilities properly and this could
create internal conflict and misunderstandings, furthermore deteriorate the coordination at
work and proper management of communication too (Shattock, 2013). This would slow down
the business processes, lower the morale of employees and create bad image and reputation
too. With the emergence of new member holding the leadership position, there have been
power conflicts as the mind sets of running the business differ from that of Susilo, which also
affected the ability to manage sustainabilityfor Sekar Group.
Analysis
The concept of leadership represents the skills, knowledge and expertise possessed by
an individual holding a good position within the organisation to lead a group of the people
and the organisation as a whole. This major concept defines the skills and abilities of the
individual to guide the members in the right direction, keep them motivated and encouraged
furthermore to accomplish the tasks with ease and efficiency (Michael-Tsabari, Labaki &
Zachary, 2014). Susilo is a successful leader because he followed the moral leadership,
which has been largely influenced by the Eastern culture. The moral leadership approaches,
based on the context, include management rights and ownership of Sekar Group to be handed
to the new generation based on their strengths and even developed family governance. The
five major components of ethical leadership are communication, quality management,
collaboration, planning for succession and ethical tenure (Ramadani & Hoy, 2015). All
these components are considered for ensuring that the ethical leadership could set standards
for the next generation to take the roles and responsibilities handed to them, furthermore lead
the organisational memebrs properly.

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Leadership issues
Because the newly appointed leader might not possess the desired amount of skills,
knowledge and expertise like Susilo to manage the workforce. Susilo was also known for his
commitment towards management of corporate and social responsibilities, which the new
generation leader might not be able to do properly and this could lead to bad reputation of the
organisation (Sharma & Kiran, 2013). The company has been efficient in both the domestic
as well as global market and thus without proper leadership skills, the company might fail to
attain a sustainable position.
Community building
Susilo, being the forefront of the business, encountered the issue or challenge of
gaining unprecedented success, while appointing the next generation individual as the leader
of the organisation. The individual to be chosen must be able to cope up with the moral
leadership and should sustain family business management as well as the corporate values
and ethics. He had also provided a good amount of the share of the business to its family
members, which has also facilitated community building (Green & Haines, 2015).
Manifesting honesty
Susilo managed transparency and openness while remaining inclined to the moral
leadership, values and ethics, which furthermore contributed to the betterment of business
performance (Noe et al., 2017).
Serving justice
Susilo made sure that Sekar Group follow ethical values and adhere the organisational
policies and principles for serving justice against any kinds of unethical activities,
furthermore ensure maintaining peace and honesty. The company served others by engaging
in charity activities and also by investing on Boston University. Not only does he respect the

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views and opinions of different stakeholders, but also has respected his siblings and family
members who were handed over the responsibility (Habibi, Laroche & Richard, 2014). He
made sure to acknowledge them with various ideas and about the business, which inspired the
new generation memebrs to take over the business after he retire.
Welly Gunawan should be chosen as the next leader because of the experience and
skills that he possessed along with the Bachelor degree in marketing management from the
International business management Trainee program. As he worked as a purchasing manager
and marketing manager, he should be the right choice for the company (Von Schlippe &
Frank¸2013).
Corporate social responsibility issues
The issues mainly arise when the new generation memebrs are not knowledgeable
about the management of corporate social responsibilities, which are essential aspects for
maintenance of values and ethics. This not only could make the company less willing to
serve the community and environment, but also should result in bad reputation (McCaleb,
2013).
Utilization of Carolls CSR pyramid

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Figure: Carolls CSR pyramid (McCaleb, 2013)
By following the philanthropic responsibilities, the company would be able to remain
ethical and also attain the desired level of profit to be achieved.
Economic
The business has already generated a revenue of more than US$1 billion annually, but
securing a profitable position in not enough to sustain in the long term. The new members
must be skilled and expert in adjusting with the changes and ensure that Susilo’s values and
ethical leadership activities are respected to attain new heights of success rather than trying
something different.
Legal
The implementation of organisational policies, reforms should help the business to
manage legality and abide by the government laws, rules and regulations. Susilo maintained a
good corporate culture and ensured implementation of legal rules that prevented
discrimination at workplace and even managed incentives system for making them gainself-
satisfaction, a sense of belonging and actualisation too (Chatterton, 2014).
Ethical
The ethical aspects were managed by Sekar Group through management of core
values, which enabled maintenance of product quality, fulfilment of corporate social
responsibilities and ensured honesty, integrity and openness all through the corporate culture,
thereby met the expectations of stakeholders and the new generation too (Ward, 2016).
Philanthropic
To gain self-satisfaction, Susilo made sure to support Boston University and even
supported the farmers to improve the agricultural activities, fishery management,

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furthermore, resulted in economic development. The farmers were educated to promote
enhancement of cashew nut production and even provided the employees with rewards and
benefits for making them perform to their potential (Cheng, Ioannou & Serafeim, 2014). The
various responsibilities presented in the CSR pyramid could be divided among the various
team memebrs to break down the tasks into simpler forms, furthermore ease down the
completion rate to gain sustainable success.
Cultural change issues
With the change in corporate culture, the new leader might be unable to adjust with
the changes, which could create complexities for the organisational memebrs to understand
the business policies, reforms, way of working and also the communication process would be
affected. There would be change in organisational structure and this could make the new
generation members unable to cope up with the changes made, thereby result in decline of
business performance. Resistance to people possessing emotional stake and consuming more
time and effort are other major issues encountered (Unit, 2015). The major drivers for change
include:
Geopolitical
To expand business, the company has promoted restoration of diplomatic relations
between Indonesia and China and ensured managing donations and funds acquiring to raise
the working capital and ensure meeting the business goals with ease and effectiveness.
Growth pressure
The business has gained great success till now, but with the handling of roles to the
new generation, the new members could face massive pressure to ensure continuity of the
business consistency. The growth pressure should be cope up with the help of understanding
the need for change and assuming the predictable outcomes too (Crowther & Seifi, 2018).

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Lewin’s change management model
The change management model by Lewin should assist in understanding the need for
change at first and then during the unfreeze stage, the employees would be able to accept that
change would be necessary, then focus on communicating the messages and information. At
the change stage, the new generation memebrs should adopt the changes and support the new
direction while in the refreeze stage, they would adopt new thinking approaches to ensure
implantation of changes successfully.
Figure: Lewin’s change management (Crowther & Seifi, 2018)
To deal with the issues related to change, the managers must follow moral leadership
style to take ethical actions for building a great corporate culture. The
Utilitarianismapproach should assist in managing cultural values and beliefs that could drive
the actions through maintenance of legality and morality, furthermore respect the rights and
duties of the employees. This should be possible through consideration of their ideas and
opinions by the manager and then make an effective decision to ensure honesty, integrity and
justice to people and community (Servaes & Tamayo, 2013).

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Power conflict issues
These kinds of issues are common when a new generation memebrs gets appointed as
the leader of the organisation after Susilo. The management of corporate or family
governance could be beneficial for managing efficacy and at the same time, address the
various conflicts and misunderstandings that have resulted from power conflicts, thereby
could result in lack of communication, poor decision making, etc (Chrisman et al., 2013). The
three circle model of family business, if implemented, should assist in assessment of the
positions that the family members do hold. Though ownership is managed by a new
generation member with other family members holding a subsequent amount of share of the
company, still external shareholders should be influenced to make investments (Hussain et
al., 2018).
With the implementation of win-win method, Sekar Group would be able to make the
family members commit themselves fully and ensure ownership by managing their own roles
and responsibilities perfectly. This would not only promote effective teamwork and
coordination, but would also foster better communication and ensure overcoming the
conflicts and misunderstandings.