Case Study

Ayala (A): Going beyond the sum

19 pages
December 2012
Reference: IMD-3-2315

Jaime Augusto Zobel de Ayala and his brother Fernando, 7th generation leaders of the family-controlled Ayala Corporation, had just finished discussing a new business proposal with their father, Don Jaime, that could potentially be the company’s first public utilities services pitch. Jaime Augusto and Fernando had recently been elected CEO and COO respectively of the Ayala conglomerate. The company had over 160 years of history that was closely linked to the story of the Philippines, and both brothers were keen to continue building on their ancestors’ vision of being a “catalyst for growth and entrepreneurial development” in the country and help close the huge social gaps while driving the corporation’s growth. They were full of optimism and driven to take their businesses to the next level while shaping and leaving their mark on the organization. An opportunity to do so arose when the government called for bids to improve Metro Manila’s water distribution under a public-private partnership format. Metro Manila had one of Asia’s oldest and most inefficient water and sewage systems. Water distribution was catastrophic: around 75% of households did not have access to a 24-hour water service and many people had no access to clean water at all. Leakages and pilfering exasperated the problem. Fernando and Jaime Augusto were excited and wanted to find a new way of creating economic value, but when they discussed the venture proposal with their father, it soon became clear that not everybody shared their vision and optimism. Could Ayala turn the Manila Water business around and make it profitable? Could it help solve the water issues and improve the lives of some lower income groups? The company had always avoided becoming involved in politics and the public sector. Was the organization ready for a public-private partnership? What were the risks and advantages?

Learning Objective

Family Business Management; Succession; Entrepreneurship; Emerging Markets; Sustainability; Next Generation.

Keywords
Family Office, Succession, Generational Transition, Ownership, Family Relationship, Real Estate, Financial Services, Banking, Utilities, Automotive, Electronics, Information Technology
Settings
Asia, Philippines
Ayala Corporation
2012
Type
Field Research
Copyright
© 2012
Available Languages
English
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics