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Muhammad Ahmed
SP19-BBA-032-B
Research Tools & Techniques
Assignment 1
To: Dr Amir Rashid
Case Study: The Laroche Candy Company

Question 1: What is Business Research?

Answer: Research is a systematic and objective analysis, recording of observation,
leading to the development of theories, principles, generalization, resulting in
prediction or the ultimate control of the events in future (James W). Business
research is done to learn about the information that could make a company more
successful.

Question 2: Why is the project that Paul Thomas Anderson is doing for the
LaRoche candy a research project?
Answer: This is a research project because Luc hired a consultant i.e. Paul
Anderson to conduct a research about his son Davy’s fears and opinions. Davy had
shown interest in taking over the family business but he was more fearful because
the failure rate in family transitions was very concerning to him, to reach this
conclusion Davy did a lot of research and studies that whether taking over the
company is going be a good decision if this huge responsibility is handed over to
him. The reason this is a research project is because Paul will conduct a research
based on Davy’s findings, whether family transition and family control over a
business has positive or negative impacts on the company.
Question 3: Which steps will Paul take now that he has clearly defined the
problems that need attention?
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Answer: Paul should follow the basics steps and processes of conducting a good
research, he should design the research based on the problem statement. He should
study and collect all the relevant data to have a better understanding of the issue at
hand, after this he should analyze all the collected data and come up with expert
opinions and suggestions, he should write down his findings and workout the
possible solutions and present it to Luc.
Question 4: Luc Laroche has decided to hire an external consultant
to investigate the problem. Do you think that this is a wise decision or would it
have been better to ask his son Davy or an internal consultant to do the research
project?
Answer: The decision to hire an external consultant is a wise decision, there are
several reasons to as why this is better than asking Davy or an internal consultant
to do the same thing. The main reason being that external consultants have a broad
working field; they have worked in multiple sectors of different countries and
hence they have built up good experience which makes them perfect to do this job.
The reason he could not ask Davy to conduct the same research is because Davy is
hell bent on the demerits of the family transition; he has become a victim of
selective perception. Furthermore, an internal consultant could not have gotten the
job done; the reason being that he is an employee of the company and the
information he has might not be complete which is necessary to conduct a proper
research and reach a justifiable solution.
Question 5: What can (or should) Cuc do to assist Paul to yield valuable research
results?
Answer: Luc, being the CEO of his own company must have a lot of experience
and research skills to aid Paul, he can provide suggestions and questions which can
be discussed with Paul for clarification. Furthermore, he can provide all the inside
company information that is required for an acceptable solution, lastly he can judge
the work done by Paul to give him a better understanding of what’s required of
him.
Question 6: How can basic or Fundamental research help Paul to solve the specific
problem of the Laroche Candy Company?
Answer: Basic or fundamental research can help Paul generate new ideas,
perspectives and theories based on the specific problem by the Laroche company
which can also be beneficial later on for the other companies and institutes facing
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similar problems. It can also help attain Paul more knowledge and greater
understanding of this problem which may enable him provide best solutions based
on this type of research.
Question 7: Try to find books, articles, and research reports relating to this issue.
Use among others, electronic resources of your library and/or the internet.
Answer:  Many families have successfully passed along thriving businesses for
many generations, in the process creating new wealth and carrying on the legacy of
the founder. These words: “Wealth doesn’t last beyond three generations.”,
resonate with business owners around the world. This is the most succinct
statement of a fear that can hang like a dark cloud over the otherwise remarkable
success of many entrepreneurs and their families. Whether it is an operating
business or portfolio of invested assets that is passed along to heirs, the “three
generations rule” can apply. The difference between success and failure is often
due to planning on both the business and family fronts. This parallel planning
process should be holistic in nature, including family decision making, ownership
preparation, leadership development, sound financial planning, and legal structures
that allow for the growth of both family and business.
“But Dad, you didn’t tell me I had to be at work by 8 a.m.! By the way, is six
weeks’ vacation too much? Oh, and did I mention that my car allowance needs to
be at least $1,500 per month? And just to be clear, I don’t think my brother and
sister should work in the business.” Many business owners would like to pass their
business to the next generation. They would also like to make sure they have
adequate funds to enjoy their retirement years. This concern, along with demands
similar to those in the first paragraph, are some of the reasons that the parents
oftentimes end up selling to an unrelated third party. Transferring the business to
the next generation only works if that generation has the desire to carry on the
business. The heirs may want to sell the business as much as the parents. They may
realize that the optimum value can be obtained while the parents are there to
transition to a new buyer. The heirs may also not want to risk the fortunes of the
business and their financial future on the untested management of the next
generation. Passing businesses to the next generation, however, is done
successfully on a regular basis. Getting there involves overcoming a lot of
obstacles. A lack of planning, poor communication, and insufficient “cash” are
three critical obstacles. If there is no “cash,” then something else has to be added to
the formula to get the results that the parents and the children seek to obtain.
uccession has become one of the most studied topics in family business research
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(Short et al., 2016). Most of the literature on succession focuses on intra-family

succession (e.g. Daspit et al., 2016; De Massis et al., 2008; Barach and Ganitsky,
1995). Chua et al. (1999) identified ownership, governance, management and
succession as central components of family involvement in family businesses. In
their analysis of succession in 152 Belgian family companies using regression
modeling, Molly et al. (2010) rated business transfer as one of the most important
events in the life cycle of a family business. External, non-family succession may
be more likely to change the company’s character and threaten its survival (Birley,
2002).
Several studies have investigated the direct impacts of intra-family business
transfers on various business areas within companies. Both conceptual and
empirical studies have uncovered multiple effects of succession that may either
improve or impede the development and performance of the companies and
stakeholders involved (e.g. Molly et al., 2010; De Massis et al., 2008; Venter et
al., 2006; Wang et al., 2004; Lauterbach et al., 1999). However, it remains unclear
whether the effects of succession in family businesses are positive or negative with
regard to the financial performance of the company. On one hand, prior studies
have emphasized that, due to risk avoidance, successors are often reluctant to take
on external debt following a generational transfer (Kaye and Hamilton,
2004; Ward, 1997). On the other hand, the desire of successors to advance
company growth and the need to find appropriate ways to finance the transfer may
trigger increased borrowing (Bjuggren and Sund, 2005).
Concluding from all the relevant material taken from the articles, I personally think
family business should be succeeded by family only. In today’s time where the
unemployment rate is sky high this can help feed the family as other means of
income won’t be much reliable. Children who worked with their parents in the
business will know how to operate it better then anyone else and they know it’s
true worth. So final answer is that yes Davy should succeed his father Luc’s
business i.e. the Laroche company.
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References
Molly, Vincent, Eddy Laveren, and Marc Deloof. “Family Business Succession
and Its Impact on Financial Structure and Performance.” Family Business
Review 23, no. 2 (2010): 131-47.
Carlock, Randel S., and John L. Ward. Strategic Planning for the Family Business:
Parallel Planning to Unify the Family and Business. (Houndmills, Basingstoke,
Hampshrie: Palgrave, 2001.
Aronoff, Craig E. and Otis W. Baskin. Effective Leadership in the Family
Business. New York: Palgrave McMillan, 2011.
Aronoff, Craig E. and John L. Ward. Family Business Values: How to Assure a
Legacy of Continuity and Success. Marietta, GA: Family Enterprise Publishers,
2001.
Akers, Stephen R. and Myron E. Sildon. A Practical Guide to Buy-Sell
Agreements, American Law Institute-American Bar Association Committee on
Continuing Professional Education, 2002.
“Forming and Operating Limited Liability Companies,” California Continuing
Education of the Bar, updates through Summer 2010.
Robinson, Richard B. and Arthur A. Weiss. Tax Planning for S Corporations,
LexisNexis, June, 2010.
Aronoff, Craig E.  and John L. Ward. Family Business Ownership: How to be an
Effective Shareholder. Marietta, GA: Family Enterprise Publishers, 2002.
“Business Buy-Sell Agreements,” California Continuing Education of the Bar,
updates through Summer 2010.
“Sales and Mergers of California Businesses,” California Continuing Education of
the Bar, updates through Summer 2010.