Casella Family Brands is a multi-beverage, family owned company based in Yenda, New South Wales. Originating from Italy, building an empire in Australia and moving business into both the domestic and overseas markets has demonstrated that modern family businesses are not only limited to parent countries but with globalisation prominent are moving internationally. This notion flows through the attached article but importantly identifies that issues can arise and there is a possibility for the imbalance of power and individual interest (Agency theory) to supersede the stewardship theory of motivation and interfere with the natural progression of family succession. Managing Director and second generation, John Casella, is our main focus in the attached and was asked about the fact that Casella Family Brands does not have a board. Asked where the board was, Casella responded, “You’re talking to it.” (Appendix 1)
Analysis & Critique
The Issue of agency relationships in Casella Wines between shareholders and the business itself also highlighted the relationships between banks and business. “The last time a bank manager told me what to do, I went to another bank.” Casella’s comment about the board and bank highlights a warning sign in regards to the dependence of a large-scale company on one person and his ego. Casella’s role in the business highlights one of the major issues relating to all family business’ that deals with the fact that owners of a business, in a position of hierarchy will act in their own self-interest regardless of impact on shareholders. Agency theory is a resolution theory concerned with these issues and if not dealt with can be detrimental. Agents resistant to change often have the mentality of “I touched it. I did it. I am responsible. I am the real business. You are not” (Fink, 2013). This partners also with the other issue of succession planning to continue the family business through generations.