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Case
| HBS Case Collection
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September 2018
From Beirut With Love (A)
by
Christina R. Wing, Esel Y. Cekin and Samer Al-Rachedy
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Abstract
This case describes how Robert Fadel, as CEO and chairman of ABC, one of Lebanon’s leading retail and real estate groups, professionalized the family business amid ongoing disputes with his siblings. Robert was the second son of Maurice Fadel, who had founded the business years before and who ran it single-handedly. Growing up with three brothers, Robert and his siblings were tested by their father before they were allowed to take on managerial positions at ABC, which created competition and tension between them. Their relationship was often contentious. To prevent the business from being affected by the rivalry between his sons after his death, Maurice set up a trust in 2002 that designated Robert as his successor. A month before he died, in 2009, Maurice revised the trust, granting Robert full control of the board as well.
In June 2009, Maurice passed away, and according to the provisions of the trust, Robert became the chairman and CEO of ABC for a period of five years, with the possibility of extending his term by an additional three years—on condition that he had the support of one of his brothers. In his new role, Robert had two main goals. First, he wanted to turn ABC into a professionally managed organization at all levels. Second, he wanted to invest in long-term projects that would expand the business. Actualizing his vision was not an easy task. Robert had to deal with his brothers’ opposition, who focused on collecting dividends rather than making investments to grow the business. In spite of everything, Robert achieved both his goals by the end of his eighth year, in 2017, when he stepped down as ABC’s CEO. Should he appoint someone from outside the Fadel family as ABC’s new CEO? Should Robert Fadel step down from the chairmanship as well?
Keywords: family business;
family conflicts;
sibling rivalry;
second-generation;
foundation;
trust;
governance;
work-life balance;
leadership;
leading change;
transformation;
succession planning;
management;
organizational structure;
corporate culture;
shareholders;
board of directors;
retail;
department store;
shopping mall;
real estate;
Growth;
Lebanon;
Middle East;
non-executive chairman;
sustainability;
Family Business;
Conflict Management;
Management Succession;
Transformation;
Leading Change;
Organizational Structure;
Management;
Growth and Development;
Retail Industry;
Real Estate Industry;
Lebanon;
Middle East;
