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Case Study

Ayala (B): Purposeful leadership

By Joachim Schwass and Anne-Catrin Glemser

20 pages

April 2013

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Reference: IMD-3-2316

When CNN turned its “Eye on the Philippines” for a special edition of the “Talk Asia” series in April 2012, the Asian business community was not surprised to see Jaime Augusto and Fernando Zobel de Ayala as interviewees alongside President Benigno S. Aquino III because the name Ayala was inseparable from the story of the Philippines nation. While President Aquino discussed the Philippines’ opportunities and challenges from a political perspective, the Ayala brothers represented the view of one of the country’s largest and oldest business conglomerates, the family-controlled Ayala Corporation, founded in 1834Fernando Zobel de Ayala (1960, 7th generation) and his brother Jaime Augusto (1959, 7th generation) had just been discussing a new business venture that represented an important growth opportunity and a huge challenge for Ayala. It would mean entering a new industry and partnering with one of its competitors to develop a light rail project in Metro Manila. Metro Manila had a population of over 16 million and was one of the “Top 20 hot spots for growth”1 of the global urban world. Its fast growing “consuming classes” would push the demand for the construction of infrastructure. One of the questions the brothers discussed was how this project could be conducted in a sustainable way. They wanted Ayala to play a progressive role in society in a way that could improve the quality of human lives or solve social challenges while achieving economic success. This was not philanthropy or corporate social responsibility in its traditional sense but rather a new approach to creating economic value in a way that also benefitted society by addressing its needs and challenges. Fernando’s thoughts drifted back to a discussion he and his brother had had in 1996 with their father, Don Jaime Zobel de Ayala (1934, 6th generation), about the company’s first public utilities services pitch, the Manila Water distribution license. Some important lessons could influence their decision today.

Learning Objective

Family business management; Succession; Entrepreneurship; Emerging markets; Sustainability; Next generation

Keywords

Family Business, Family Office, Succession, Generational Transition, Ownership, Governance, Family Relationship, Entrepreneurship, Sustainability, Real Estate, Financial Services, Banking, Utilities, Automotive, Electronics, Information Technology, General Management, Strategy

Settings

Asia, Philippines
Ayala Corporation
2012

Type

Field Research

Available Languages

English

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