Brands of family business


The title to this article is self explanatory and in this article we are summarizing points from the talks of Business consultants with reputed business families and their ups and downs. The experts talked to a wide range of family members, bankers and business people in the quest to retrace the fortunes and misfortunes of Italy’s unofficial royal family. Since the death of L’avvcato, as Giovanni Agnelli was known (he had a law degree, but never practiced), many have become openly critical of the management decisions that led to the near bankruptcy of Europe’s once dominant carmaker.

Agnelli was the boss of Fiat for many years and critics now question his neglect of research and development into new models, his investment in unrelated types of business, and (most of all) his decision not to sell the car business to Daimler-Benz, Ford or Volkswagen when those companies were interested

The result is a sound analysis of Fiat’s fall, though it sometimes reads more like a collection of long articles than a coherent narrative. Clan members such as Marella Agnelli, the patriarch’s widow, refused to be interviewed. And those who did, made few new revelations.

Short of juicy material, an Italian publication’s interview with Lapo Elkann, one of the Agnelli heirs, where he says that he feels “a bit Catholic and a bit Jewish� He also tells and retells the story of how Gianluigi Gabetti, the head of the Agnelli holding company, promised the paterfamilias on his death bed that he would protect the interest of john Philip Elkann, his dauphin.

Many in Italy are still devoted to L’avvocato, who is fondly remembered for his charm, chic and quick wit. Martine Orange, one of France’s best known business journalists, found no such loyalty when she worked on her book on Lazard, formerly one of Europe’s noblest investment banks. Michel David-Weill, who was boss of Lazard for decades, encouraged a Darwinian culture among his lieutenants. He thought this would foster clever individualists who would fight hard to bring the most lucrative deals to the bank.

David-Weill’s strategy worked for some years. Lazard attracted top banking talent in Paris as well as in London and New York. Unlike Rothschild, a similarly aristocratic family-controlled bank, Lazard was not nationalized in 1981 by the then socialist government in France. During the following decade it arranged more than 70% of all the corporate mergers and acquisitions in the country. It also played a central role in privatizations, or “de-nationalizations� as the socialists’ subsequent policy reversal was dubbed.

The nastiness of Lazard’s office culture was one of the reasons why the bank lost its shine in the late 1990s. Fed up with what Orange calls the “policy of mutual detestation�, dozens of top bankers left to work for rivals. Lazard rapidly lost market share, especially in France where by 1998 it arranged less than one-third of corporate marriages.