Rapid: Governance Challenge

RAPID, a private company with complex ownership and nontransparent management systems, faces challenges associated with fast growth and an archaic governance structure. The founders of the company recognize the challenges, but lack knowledge and experience to deal with them. Specifically, they are about to discuss replacement of the CEO and reorganization of their governance system. The system of corporate governance which has emerged at RAPID represents a strange mix of some contemporary practices such as a separation of chairman and CEO roles, and independent audit, family traditions, and an informal entrepreneurial approach. The case recounts the different approaches the RAPID founders explored in approaching the CEO succession and governance reform, and shows how their thinking process evolved and what decisions they made at different stages of the change process.

The pedagogical objective is to give students the opportunity to see the real situation in managing a family business, the challenges such a firm faces, and possible ways to deal with them. Moreover, the case study allows students to see how local companies in emerging markets enter the global world, how such growth affects the culture and the management system inside the organization, and how challenging it is for successful first-generation entrepreneurs to adapt and to switch to a different, international corporate and financial strategy.