Valentina Jaramillo

Grupo Multinacional de Seguros

A Venezuelan Family Business

History GRUPO MULTINACIONAL DE SEGUROS is an insurance company founded by Carlos Carrero (owner and president of the company) on 1983 in Venezuela. It started as Seguros La Guaira and in 1993 it changed its name to Multinacional de Seguros. After 2 years, Carlos Carrero acquired another insurance company named Seguros Guayana and five years later Interbank Seguros. In 2003; the president took the decision to merge the companies; so it was then when the Grupo Multinacional de Seguros was born. Currently, the company is within the first 10 most successful insurances company in Venezuela with more than 1000 employees around the country. It is headquartered in Caracas and has branched out to 20 cities. It has partnerships with three big insurance companies in the world: Munich Re; Swiss Re and Mapfre. Carlos Carrero is a self-made man who believes in perseverance. He also believes that the learning process is continually ongoing as technical knowledge and expertise is a competence the company needs to have in order to remain competitive in the market. Throughout years, Carlos Carrero has become one of the most successful entrepreneurs and investors in Venezuela, owning a wide range of companies within other industries. To name a few: hotels; restaurants; radio stations and telecommunication companies. Family and Business issues As he is getting old, he has wanted his sons to be involved since early ages within the company and has made them being trained in all departments. He is sick and wants to prepare a take over within the next three years. His sons are: Carlos Jr. 26 years old; Rafael, 19 years old, and Luis being 17 years old. Furthermore, they do not have privileges and are benefited from the same conditions as regular employees. Actually, Carlos Jr.s passion is not within the insurance business but to please his father he has been receiving training since 10 years ago and 4 years ago was named

the Manager of Sales. He has strong emotional attachments to his father and has performed outstandingly making sales increased drastically, although he does not love what he does. On the other hand; Rafael, against his will, is working there as well but he does not want to have big responsibilities but instead enjoying his life as a 19 years old boy. Finally, Luis does not have an official position within the company because he is a trainee. Luis feels he did not have an option to even think what he likes because since he was a child it has been heard from his father that all his sons would be his successors. Although Luis has not demonstrated resistant; he wants to set up his own business, following his mothers steps- the only one not involved in the family business. On the other hand, the presidents brother (Juan) also works on the business and is the Director of Communications and has worked with his brother since the foundation of the company. While Carlos Jr. thinks selling the company is an option in order his father can rest and therefore, he could do what he loves; Juan wishes to assume the take over and be in charge of the presidency due to the loyalty he has demonstrated to his brother as well as the experience he has got working there since the foundation day. Carlos Carrero wants his sons to become his successors.

Theories The succession model to be followed is the one stated by Churchill and Hatten (1987) as cited in Handler (1994), which researches heirs role in their family business split into three different levels of involvement. The first one demands the offspring being associated with the business through dialogues with the family or part- time employment. The second level refers to involve the offspring into a full-time employment within the firm and finally the last level demands the offsprings appointment to leading roles and assuming the responsibilities of parents in the firm. According to the business in matter; the owner has followed this model as his offspring has been associated to the company since early ages. In addition, they have been full-employed and reached high positions within the company except for the youngest. Furthermore, Longenecker and Schoen (1975) as cited in Stavrou (1999), suggest that there are two more levels: the early succession stage in which the next generation undertakes the presidency and the last level, the mature succession, in which the heir manages to be de facto leader of the business. In this case, Carlos Carrero is preparing them for the last two stages.

Having reviewed all issues, challenging questions arise: despite the training the sons have received as well as the positions they are in; are they ready to take over the company within 3 years if the insurance business is not their passion? Will their fathers values being maintained and reinforced throughout time? How to ensure continued success though lack of interest in business by successor generation? If the owner does not want to sell the company but instead leaving it in family hands; what would be the best option? Family Business structure: (just 4 members of the family are involved; excluding the founder)

Manager of Sales Founder and president

Carlos Jr.
(eldeste son)

Carlos carrero
(father) Director of Communications

Juan Carrero
(Carlos Carrero's brother)

Coordinator of IT

Rafael

Tainee

Luis
(youngest)

References Handler, W. (1994) Succession in family business: a review of the research, Family Business Review. [online] Vol. 7 (2). Available at: http://www.uk.sagepub.com/chaston/Chaston%20Web%20readings%20chapters%20 1-12/Chapter%2011%20-%2014%20Handler.pdf [Accessed 26 March 2013].

Multinacional de Seguros (2013) La empresa. [online]. Available at: http://www.multinacional.com.ve/Multinacional/index.php [Accessed 24 March 2013]. Stavrou, E. (1999) Succession in Family Businesses: Exploring the Effects of Demographic Factors on Offspring Intentions to Join and Take over the Business, Journal of Small Business Management, [online] Vol. 37 (3) Available at: http://www.questia.com/library/1G1-55413421/succession-in-family-businessesexploring-the-effects [Accessed 26 March 2013].