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Assignment Question:
Discuss the Monarch, General and Ambassador CEO exit styles characteristics, roles,
advantages and disadvantages of having such a leader.
WHAT IS AN EXIT STYLE? According to Wikipedia an exit style is a means of leaving
one’s current situation, either after a predeterminedobjective has been achieved or as a strategy to mitigatefailure.
An organization or individual without an exit style may bein a dilemma. At worst an exit style will save face, at best,an exit style will peg a withdrawal to the achievement of anobjective worth more than the cost of continuedinvolvement.
Exit style is a plan that allows the owners of a business towalk away with what they want to walk away with giventhat they have put in place proper channels in which thesuccessor will continue to run the business efficiently.
THE SIX MAIN EXIT STYLES In a Family Business there are six common CEO exit
styles used which are: Monarch, General,Ambassador, Governor, Inventor and theTransition Czar. For the purpose of this assignmentwe are going to focus mainly on the three CEO exitstyles which are: Monarch, General andAmbassador concentrating mainly on thecharacteristics, roles, advantages and disadvantages ofhaving such leaders.
THE MONARCH The Monarch is the head of a family business and
usually stays in the business until forced out. “Themonarch rightfully operates on the assumption thatthey will die with their crown on”. (Ernesto J. Poza: 112)
Even if they retire they will still be doing businessoperations and being involved in making the companydecisions. They are usually resistant in handing overthe business which they started to someone else.
They want to be the leader till they die.
The monarch exercises the autocratic leadership stylewhereby he/she has total power and control overeveryone.
Characteristics They rule for life. They have no succession plan. A succession plan is a process for identifying and developing
internal people with the potential to fill key business leadershippositions in the company .(Charan, Drotter, Noel, (2001 page 7)How to build the Leadership Powered company)
They have no retirement provision. They feel no one can be as good as they are. They do not consult when it comes to hiring and firing. Chaos is usually the order of the day when they die. Absolute control over every business entity that they own. Monarchs are discreet even to their closest advisers and family. They have no downward delegation. They are selfish.
ROLES Only they have the authority to hire and fire
personnel.
But according to Susan M. Heathfield
(humanresources.about.com) one must not just fire the person in whom they have put a lot of effort to improve their work performance.
They formulate rules and regulations that govern the monarchy.
Oversee the overall performance of the monarch.
ADVANTAGES They maintain a certain super standard for their
business.
Power is confined to one central point which is theroyal family.
Quality maintenance as they lead with passion.
Brilliant vision for institution building.
Long term support from shareholders.
Complete personal dedication.
Assumes personal responsibility for problems.
DISADVANTAGES There is no succession plan.
Family business may face destruction due to pooroperations after his death.
Chaos usually arises when the monarchy dies.
They do not entertain subordinate ideas.
Hatred among family members.
The Ambassador The Ambassadors are the coaching types of CEO’s.
They take their time to retire from the company andmake room for the next generation and the top nonfamily members to step up and take control.
They will proceed slowly with their retirement to makesure that the business is in good hands and that thesuccessor is fully qualified and capable of coming intothe leadership position.
The Ambassador has the business in mind and will notlet anyone who is not ready to take over the day to dayoperations of the business.
CHARACTERISTICS They delegate most of the operating responsibility to
the next generation members or key non-familymanagers but hold on to their diplomatic orrepresentational duties on behalf of the corporatione.g K.F.C, Econet in the case of Strive whereby DouglasMboweni is the C.E.O.
There is room for non members to rule the nextgeneration.
Ambassadors have the company at heart i.e they donot allow anyone who is not ready to run the businessto do it.
ROLES They coach and mentor the next generation or
successors.
They do not discriminate i.e they can be succeeded bynon family members.
Advantages Continuity of command through long service.
Available for elder statesman wisdom?
Eager to accept assignments as externalrepresentatives.
Broad interests, community and outside boards.
Well informed on outside approaches tomanagement.
DISADVANTAGESMaintains awkward continued presence.
Tense restraint and impulse to intervene.
Offer unsolicited advise or public comment.
Encourages possible distraction of CEOfrom the company.
GENERAL According to (Ernesto J. Poza: 113) this chief executive
leaves office reluctantly and plots a return.
The General is the leader who retires from thebusiness with the hopes of returning to reassume hisleadership role again.
Generals do not fully retire, they wait for thesuccessor to make a mistake so that they return andwork.
CHARACTERISTICS They are militant in their behavior and approach
to business.
They enjoy semi retirement and plot a return unannounced.
They make no room for the successor to explain his or her mistakes.
ROLESSafeguarding the interests of the company.
ADVANTAGESBridges internal factions.
Ready to return to office in crisis times.
Capable of building strong top leaders.
Cautious in leadership transactions.
Ready to correct mistakes made bysuccessor.
Exemplary commitment to their work.
DISADVANTAGES May fuel internal rivalries.
Leader encourages resistance to successor.
May undermine own successor.
Leader attached to leadership identity.
CONCLUSION Having studied and discussed on these three CEO exit
styles we conclude that the Ambassador is the best exit style.
They consider the continuity of their business.
They have the best interests at heart concerning their business.
The worst exist style according to our discussions is the monarch.
The business is almost always guaranteed to crumble and fail after they are gone.
REFERENCES1. http://www.family businesswiki.org/
2. Poza, Ernesto J (2010 p112) Family Business
3. Charan, Drotter, Noel (2001 page 7) How to build the Leadership Powered company
4. Susan M. Heathfield (humanresources.about.com)
5. Tom Peter (November 11, 2013) Leaders don’t create followers, they create more
leaders.
6. Longenecker, J G Moore, CW & Petty, J W (2000), Small Business Management:
on Entreprenurial Emphasis. 11th Edition, Ohio, South Western Publishing
7. Kelin E. Gersick, John A Davis, Morion McCollom Hampton, Ivan Lansberg, (1997) Generations to Generation: Life Cycles of the Family Business: Harvard University Press
8. Mike Cohn, “Does your Company Put Family or Business First?” The Business Journal of Phoenix. (2005)
