Sekar Group Case Study: Leadership, Ethics, and Succession Plan

This case study analyzes the leadership and succession challenges faced by the Indonesia-based Sekar Group, founded by Harry Susilo. The company, rooted in Eastern cultural values and led by Susilo's moral leadership, now faces the task of transitioning leadership to a new generation influenced by Western culture. Key challenges include selecting a successor, ensuring the continuation of long-term business ethics, and navigating generational differences. The analysis recommends developing a family vision, outlining a clear power transition plan, creating a family employment policy, preparing the next generation for leadership roles, and establishing a board of directors. It identifies Finna Huang, Harry Susilo's daughter, as a capable candidate for the next generation leader. The report emphasizes incorporating Susilo's business ethics into the company's mission and vision, establishing a code of ethics, initiating training programs, forming an ethical committee, and integrating ethical compliance into performance appraisals to ensure the enduring legacy of Sekar Group's values.

LOB6- Group Case Analysis Research
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Contents
Abstract............................................................................................................................................3
Analysis...........................................................................................................................................3
References........................................................................................................................................7
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Abstract
Indonesia based Sekar Group started in 1966 as a small company purchasing fishes and shrimps.
The company led by its founder Harry Susilo has grown today to a large holding company with
various business divisions in the global market. The achievement of Sekar can be attributed to
the moral leadership of Harry Susilo, which was influenced by Eastern Culture. Harry Susilo has
10 siblings whom he considered as his children and majority of them were involved with various
business activities of Seka, and the smallest sibling is preparing to retire from the company. As a
founder, Harry Susilo is facing the challenge of ensuring the success of the company for which a
leader needs to be chosen. Currently Harry Susilo is facing three challenges namely how the
future generation who is inspired with western culture can succeed in the company influenced by
Eastern culture, whether Finna Huang can become the next generation leader of Sekar and how
he could pass his long term business ethics to the future representatives of Sekar. The current
report helps in analyzing the issues and providing insights in regard to resolving the concerns of
Harry Susilo.
Analysis
The family successions, which occur between the second and third generation have the benefit of
experience. This is because of succession planning already occurred in the previous generation.
However, in context of the current case study, Harry Susilo’s children and that of his siblings can
be considered as second generation since Harry Susilo and his brothers more and less have
worked in the similar generation and there was no requirement for succession planning. This is
because the siblings worked simultaneously during the same period of time and as a result they
were guided and inspired by the leadership qualities and values of Harry Susilo. With the family
growing bigger, smaller issues have an ability of becoming complicated and since the time for
Harry Susilo’s children and that of his siblings has arrived for taking charge of the company, he
should prepare a succession plan where the below mentioned policies and recommendations
should be included in order to ensure that a natural leader like him emerges from the future
generation.
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Creating a family vision- Harry Susilo needs to develop a family vision. This is because
continuity and succession planning involves identification of the business’s desired future legacy
by creating a vision for the company. As opined by Crittenden et al. (2015) the vision will not
only help in providing direction, but will also make it easier for the younger generation to ensure
that their decisions are following the correct roadmap. This can be done by simply asking
themselves whether the decisions taken will contribute in achieving the family’s vision.
Clearly outlining a power transition plan- Harry Susilo in his succession planning must also
focus on clearly outlining a power transition plan in order to avoid conflicts between family
members regarding who will take company decision. As stated by Lee, Bartkus & Lee (2015) it
is often observed that the future generations of family businesses often indulge into conflicts
regarding decision-makings in the business. Hence, it is important to develop the succession
planning in a way that has provision for separation of powers between the future generations.
This will eventually contribute in bringing out the most effective decisions for the business taken
after consultation with other decision makers.
Creating a family employment policy- As opined by Mokhber et al. (2017) focus must also be
given on creating a family employment policy as a vital part of the succession plan of Sekar
Group. This is because growing size of the family will lead towards increased complications due
to generational transitions. Hence, development of a family employment policy will help in
having clear guidelines regarding the roles and responsibilities of the family members, including
in-laws, further allowing effective company operations in a manner where all family members
can fairly and equitably agree.
Preparing the next generation- As opined by Nunnemacher (2016) Harry Susilo must also
focus on preparing his next generations (his and the children of his siblings) to make them ready
for various leadership roles within the company. As Harry Susilo is greatly respected and
admired by all the family members, he is considered as a born leader responsible for the ultimate
success of Sekar Group. Hence, he should take up the role of mentoring the future generations
for developing their leadership skill further ensuring the transition of business values and ethics
from one generation to another.
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Creating a board of directors and be conscientious regarding who joins the company- Harry
Susilo should focus on creating a board of directors for Sekar Group, which will not only include
the family members but also non-family members belonging to diverse background. This will
become an effective tool in reference of gaining outside perspectives of business challenges
besides mediating any conflicting or transitional issues. As stated by Perret, Burnett &
Richardson (2017) the board of director should develop a set of guidelines and policies to govern
who joins the company, be it family members or non-family members. Moreover, they should
also be given the authority to have the final say in resolving various conflicts that may arise in
the company by adhering to the ethics and values of Sekar.
Finna Huang, the elder daughter of Harry Susilo is fully capable of becoming the third
generation leader of the company owing to her vast capabilities and experiences. She possesses
expertise in managing and consulting, which can be considered as vital skills with reference to
oversee the company’s development. Additionally, she also has hands-on experience in starting
and growing new business ventures further possessing the required expertise in managing a
reputed company like that of Sekar. She was also responsible for establishing the governance
system within the company and therefore, can be considered as the ideal candidate in becoming
the third generation leader. Finna Huang also owns an exceptional academic qualification, which
includes double degree in entrepreneurship and innovation from Babson College and a MBA
degree from the Boston University School of Management. Hence, it can be said she possesses
the required knowledge and skills to become the 3rd generation of Sekar Group.
As stated by Zahrani, Nikmaram & latifi (2014) for pass down his long-held business ethics
within the younger generations of the Sekar Group, Harry Susilo must focus on incorporating his
long-term business ethics into the company’s mission and vision. Moreover, he should also make
a provision that the future goals and objectives of the company adhere to his long held business
ethics for ensuring that the ethics forever remain a part of Sekar Group. A code of ethics must
also be developed to be followed within the company so that the future generations of the family
comply with the business ethics. As stated by Phikiso & Tengeh (2017 a training program must
also be initiated in the company to train the future employees of the family about the business
ethics of Sekar Group and its significance in day to day operations of the company. In addition to
this, an ethical committee should also be formed in the company who will be accountable for
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analyzing the daily activities of both Sekar and the employees in order to determine whether it
complies with the long term business ethics held by Harry Susilo. According to Sonfield &
Lussier (2014) compliance of business ethics and the core values as an important criteria in the
company’s performance appraisal policy should also be ensured so that long held business ethics
of Harry Susilo are followed by all employees, be the family or non-family members.
References
Crittenden, V. L., Crittenden, W. F., Eddleston, K. A., Kellermanns, F. W., & Floyd, S. W.
(2015). Family business: When you can't choose your partners.Industrial
Management, 57(5), 12-17,5. Retrieved from
https://search.proquest.com/docview/1721965046?accountid=30552
Lee, Y. G., PhD.,Bartkus, K. R., PhD., & Lee, M., PhD. (2015). The diversity of legacy
motivation: Succession planning of african-american, mexican-american, and korean-
american business owners. American Journal of Entrepreneurship, 8(1), 71-93. Retrieved
from https://search.proquest.com/docview/1703375458?accountid=30552
Mokhber, M., GiGi, T., Abdul Rasid, S. Z., Vakilbashi, A., MohdZamil, N., &Woon Seng, Y.
(2017). Succession planning and family business performance in SMEs. The Journal of
Management Development, 36(3), 330-347. Retrieved from
https://search.proquest.com/docview/1882353556?accountid=30552
Nunnemacher, H. (2016). Attitudes toward trust, identity, and succession planning over
generations in family business (Order No. 10103911).Available from Business Premium
Collection. (1789315527). Retrieved from
https://search.proquest.com/docview/1789315527?accountid=30552
Perret, S. T., Burnett, M. F., & Richardson, W. B. (2017). Perceptions of the importance of
succession planning in family owned businesses. Academy of Business Research
Journal, 3, 44-63. Retrieved from https://search.proquest.com/docview/2187375326?
accountid=30552
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Phikiso, Z., &Tengeh, R. K. (2017).CHALLENGES TO INTRA-FAMILY SUCCESSION IN
SOUTH AFRICAN TOWNSHIPS. Academy of Entrepreneurship Journal, 23(2), 1-13.
Retrieved from https://search.proquest.com/docview/1987376936?accountid=30552
Sonfield, M. C., &Lussier, R. N. (2014). The relationship between managerial characteristics and
succession planning in family businesses: A multinational analysis. American Journal of
Entrepreneurship, 7(1), 1-39. Retrieved from
https://search.proquest.com/docview/1545976369?accountid=30552
Zahrani, M. A., Nikmaram, S., &latifi, M. (2014). Impact of family business characteristics on
succession planning: A case study in tehran industrial towns. Iranian Journal of
Management Studies, 7(2), 229-243. Retrieved from
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