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Chairman of the Board Eric Molson and Corporate Strategy: Letting CEOs Do Their Job ... or Not
Case 9 40 2021 004
Case published in the International Journal of Case Studies in Management, Vol. 19, No. 1
Languages : 
  • English
Keywords: 
  • Family business,
  • Strategy,
  • Corporate governance,
  • Board of directors,
  • CEO,
  • Diversification
Year of production : 
2021
Registration date : 
2021-03-04
Teaching notes included : 
Yes
Abstract

In 1988, Eric Molson became chair of the board of The Molson Companies Ltd. (TMCL). Founded in 1786, the company had focused on brewing beer until the mid-1960s, when it decided to diversify to promote its growth. In 1988, TMCL had four main divisions: brewing, chemicals, retail merchandizing, and sports (the Montreal Canadiens hockey team). Despite nagging doubts about diversification, Eric initially embraced the conglomerate strategy mapped out by his predecessors for the past two decades. He later realized, however, that it was time for TMCL’s reign as a conglomerate to end. He firmly believed that Molson’s future lay in going “back to beer” and becoming a global brewer. The case explains how, between 1988 and 1999, Eric and his board hired and fired several CEOs – John Rogers, Mickey Cohen, Norman Seagram, and Jim Arnett – in an effort to return Molson to its core business. Finally, in 1998, Molson’s regained full ownership of Molson Breweries and, in 1999, Molson’s sole focus returned to brewing. However, much remained to be done to secure Molson’s position as a global player in the brewing industry. The case lays the groundwork for a discussion of strategy and corporate governance in the context of a large family-controlled business.

Primary domain : 
Management  - Strategy
Secondary domain : 
Not available
Sectors : 
  • Consumer goods
Source : 
HEC Montréal
Type : 
Traditional case (Descriptive or analytical case)
Type of data used in the production of the case : 
Factual data that is not public wherein the identity of the company/person is disclosed
Event location : 
Canada and USA
Year of start of the event : 
1988
Year the event ended : 
2000
Business size : 
Large enterprise
Main themes covered
  • Family business
  • Strategy
  • Corporate governance
Teaching objectives
  • Understand the specificity and complexity of family-controlled businesses, especially in terms of governance
  • Analyze the business strategies and key priorities of family businesses
  • Analyze the agency problems related to the governance of large public, family-controlled businesses.
Concepts and theories related to the case
  • Family business
  • Strategy
  • Corporate governance