Post: Your post should be lengthy (approx. one solid paragraph) that responds to each question cogently and draws on either your own experiences or the concepts in the textbook and lectures, as appropriate. A brief post (1-2 short sentences) will result in the loss of 2-3 points.

Questions:

1.What decision should Gabriela make at this time?

2. Can she have any influence in the family business?

TAMPA INSURANCE COMPANY: LOSING CONTROL: THE TALE OF A FAMILY FIRM. Introduction The tip of the icebergThis is ridiculous, Gabriela thought to herself as she looked for a pen to use. She couldn't even find the very basic office supplies that she needed in order to perform her work adequately. How could anyone expect workers to perform in this type of environment? she wondered out loud. This was her familys business and it was hurting her to see it operate like this. In Gabrielas opinion, Tampa Insurance Company was in real trouble and needed desperately to get their act together. But how could she help her family members understand the severity of the seemingly unmistakable disaster that was lurking in the future of their family-owned company? The company had recently begun to assume an overly bureaucratic stance in response to employees requests for basic necessities like office supplies and freedom to make long-distance phone calls. For close to two months now, employees had been locking their desks at night in order to prevent coworkers fromstealing their pens, pencils, and even paper clips because all the employees were short on these items. Her cousin and also the vice president, Rose, claimed that these were necessary cost-cutting measures. The situation at work, it seemed to Gabriela, was deteriorating rapidly.

TAMPA INSURANCE COMPANY: LOSING CONTROL: THE TALE OF A FAMILY FIRM I. Introduction - The tip of the iceberg This is ridiculous, Gabriela thought to herself as she looked for a pen to use. She couldn't even find the very basic office supplies that she needed in order to perform her work adequately. How could anyone expect workers to perform in this type of environment? she wondered out loud. This was her family's business and it was hurting her to see it operate like this. In Gabriela's opinion, Tampa Insurance Company was in real trouble and needed desperately to get their act together. But how could she help her family members understand the severity of the seemingly unmistakable disaster that was lurking in the future of their family-owned company? The company had recently begun to assume an overly bureaucratic stance in response to employees' requests for basic necessities like office supplies and freedom to make long distance phone calls. For close to two months now, employees had been locking their desks at night in order to prevent coworkers from stealing their pens, pencils and even paper clips because all the employees were short on these items. Her cousin and also the vice president, Rose, claimed that these were necessary cost-cutting measures. The situation at work, it seemed to Gabriela, was deteriorating rapidly. Whenever she thought that it would not get any worse, a curveball came careening right at her as if to say, You haven't reached the bottom yet. At this point, she really couldn't imagine how things could look more somber, but she had learned not to underestimate family dynamics in the business. Gabriela had tried reasoning with almost all of her family, but for the most part they seemed to ignore her warnings. Gabriela genuinely wanted to help her family extract themselves from the current hardships that they were facing and save the company. At the same time, however, Gabriela knew that if the family didn't want to help themselves work through these difficulties, there was no way that she could magically do it for them. Given the fact that Gabriela was treated no different than any other employee, she realized that she had nothing restraining her from quitting and looking for a different job. But, she thought to herself, there was some sense of security in working with and for family members. As she continued her search for an available writing utensil, she pondered the events that contributed to the current situation and deliberated her future with the company. II. The Torres Family Business Julio Torres left Cuba with his family in the early 50's in their quest for a better way of life. They decided to settle in Tampa like many of their countrymen had done over the last century. At the time, Julio's son, Ricky, was a small boy. Ricky grew up as a typical Cuban-American in a family that made a strong effort to keep their heritage alive. In high school, Ricky met Maria Rivero, whose parents were also immigrants from Cuba. The high school sweethearts married a few years after high school, in the late 60's. They, too, made Tampa their home. Ricky and Maria had three daughters, Rose, Beverly and June. All of the daughters went on to receive a college education. Rose and June graduated with a Bachelor's in Finance and Beverly became a licensed CPA. Rose was the oldest of the three daughters. Most family members always viewed Rose as Ricky's favorite child. Even Rose would not completely deny these allegations. Most people considered her somewhat spoiled by her father. Beverly was the middle child and was hard-working and responsible. Her attitude has always been to make her own way in life and not to get ahead by accepting any free rides. June was the youngest daughter and has always been viewed as the baby in the family. She had no problem assuming this role, as she frequently relied on her father to carry her through. III. The Parra Family Maria's younger sister, Annie Rivero married Juan Parra in the early 70's. Although Juan knew Ricky as they grew up, they were not close friends until they were married to the two sisters. Juan worked in auto repair and eventually opened his own TV repair shop. Owning a TV sales and repair shop was not Juan's dream, but he was quite happy with the independence and income that it provided. When Ricky wanted to start his own company, Juan was more than happy to help his brother-in-law whom he trusted abundantly. Juan and Annie had three boys and one girl, John, Leonard, Mike and Gabriela. Each of their children also received college educations. Gabriela was younger than her Torres cousins by a number of years; she was still very close to them. Gabriela attended Florida International University in Miami and received and Bachelor's in Business Administration degree. IV. Tampa Insurance's History When the Torre's first daughter was born in the early 70's, Ricky began to look for a job in order to provide for his small family. Learning from one of his friends that insurance was a lucrative industry, Ricky found himself a job as a car insurance salesman. Ricky's job entailed selling the policies to potential customers, but not the signing. To handle that aspect of the transactions he would have to acquire a special license, which did not interest him. Ricky's brimming sense of confidence and natural intuition led him to quickly climb the ranks within his company. During the next few years, Ricky and his wife had two more daughters. In the early 80's, shortly after his 50th birthday, Ricky began to feel that he had succeeded as much as he could at his current job and that it was no longer satisfying for him. At that time, he decided that he wanted to start his own venture, even though he had no formalized plan to do so. For a few years, he mulled over the idea of creating an insurance company and worked out the finer details with a coworker at the agency. Finally, Ricky and his colleague decided that they would take the plunge, and in 1983 they founded Tampa Insurance Company in Tampa, Florida as copartners. Originally, Ricky and his partner planned to fully fund the company themselves, but they soon learned that establishing the company required a larger investment than they could afford. At that point, Ricky convinced his brother-in-law, Juan Parra, and another close family member to invest in the company. In addition to the four investors, the company still needed a bank loan to fund a portion of the new venture. The total outlay for the new company was roughly $5,000,000; most of which was provided by Ricky and his co-partners. V. The Early Days From the start, it was decided that Tampa Insurance would focus on term life insurance. The basic functions that the company served were policy writing and dealing with claims. In order to write policies, the company needed an acting agent. Since Ricky and his partner did not have the necessary license, Maria obtained a license and became the acting agent for the company. At about the same time, Ricky's oldest daughter, Rosalyn, was considering quitting her current job in a bank. She was in her early 30's and had graduated college with a baccalaureate in Finance before taking her current job. So, Ricky invited Rose to become Vice President of Tampa Insurance, an offer that she gladly accepted. During its first year in business, Tampa Insurance performed better than expected. Roughly twenty employees worked for the company at the time. Shortly thereafter, however, Ricky had a quarrel with his original partner. After agreeing that they couldn't work together, Ricky bought his non-family partner out of the company. Both Ricky's brother-in-law, Juan, and a close family member were still investors in the company. However, since Ricky had put forth the most significant portion of the outlay, he was unquestionably in charge of the company. Some family members now became slightly concerned with the strong concentration of power that Ricky held alone. Until then, the fact that Ricky had a partner was reassuring since it offered a forum for differences of opinion. A number of members raised the concern that it would be harder to make good business decisions without this duality. Juan, though, muted his relatives' warning bells since he felt that he had the ability to influence Ricky in cases of necessity. VI. Growth During the next few years, Tampa Life continued to grow. By 1987, there were 50 employees at the company. Ricky had decided the firm could not survive on the term life insurance business and it should focus increasingly on automobile insurance by selling policies referred to as PIPD, which covered motorists for the very minimum required by Florida state law. This type of insurance was cheaper than full insurance for the driver, but more expensive for the underwriting company since they had to pay claims out more often. But PIPD provided more immediate cash flow for Tampa Life through its automotive insurance division. Since this niche was not yet exploited by many other companies in Florida, Ricky felt that it was a good business model for his young company. For the most part, Ricky and his daughter Rose were in charge of running the company. However, Ricky frequently took off time to play golf and Rose would take command of the business