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As old as history: Family-controlled business groups in transport services: the case of SEUR

2014; Taylor & Francis; Volume: 56; Issue: 8 Linguagem: Inglês

10.1080/00076791.2013.851523

1743-7938

Elena San Román, Paloma Fernández Pérez, Águeda Gil-López,

Cooperative Studies and Economics

AbstractThis article presents empirical evidence about the contribution of family-controlled business groups as highly efficient alternatives to the large vertically integrated and professionally managed corporation in specific institutional and market environments. This hypothesis is tested with a single case study, SEUR, in the Spanish transport services sector. SEUR is one of the most prominent Spanish courier companies. It was founded during Franco's dictatorship, expanded in democratic times, and imaginatively adapted to the financial challenges of the late globalisation at the end of the twentieth century, while maintaining the traditional values based on personal trust and family ties.Keywords:: family businessbusiness groupsnetwork business groupsexpress transportSpanish business history AcknowledgementsThis work stems from research funded by the company SEUR. We thank SEUR, which permitted the use of the information contained in this paper. We especially thank Carmen Queipo de Llano (Director of Communications Department), Laura Gonzalvo (External Communications Manager) and Manuel Valle (President of SEUR at the time of the research) for all their support. We also thank IESE Business School and its members: Professor Josep Tàpies (Chair of Family-Owned Business) and Joaquín Molina (Director of Corporate Development) for their help and advice. We finally thank Antonio Garrigues Walker who has enriched our view of SEUR with his comments. DBK and A.T. Kearney gave us valuable advice and some interesting data from their own research work.Notes 1. E.g. CitationLeff, “Industrial Organization and Entrepreneurship”; CitationGuillén, “Business Groups in Emerging Economies”; CitationKock and Guillén, “Strategy and Structure”; CitationValdaliso, “Grupos Empresariales, marco institucional”; CitationBarbero and Jacob, Nueva historia empresas en América; CitationColpan, Hikino, and Lincoln, Oxford Handbook of Business Groups. 2.CitationValdaliso, Familia Aznar y sus negocios; CitationDíaz Morlán, Los Ybarra; CitationFernández Pérez, Siglo y medio de trefilería; CitationSan Román, Ildefonso Fierro. 3.CitationTàpies, Empresa familiar, 11. 4. They identify two basic types of business groups: the network type in which the constituent companies adopt the behavioural principle of alliance and the hierarchy type which are organised by the authority. CitationColpan and Hikino, “Foundations of Business Groups,” 18–19. 5.CitationGranovetter and Swedberg, Sociology of Economic Life; CitationGranovetter, “Coase Revisited”; CitationCasson, “Cultural Determinants of Economic Performance”; CitationCasson, “Economics of the Family Firm.” 6. Fernández Pérez and Rose highlight the role of social networks and their contribution to the success of family business. Other papers that followed Granovetter and Casson footprints in business history are CitationRose, “Networks, Values and Business”; CitationColli and Rose, “Families and Firms”; CitationColli, Fernández Pérez, and Rose, “National Determinants of Family Firm”; CitationFernández Pérez and Puig, “Knowledge and Training”; CitationFernández Pérez and Rose, Innovation and Entrepreneurial Networks. 7.CitationPowell, “Neither Market nor Hierarchy.” 8. Since the late 1980s, the distinction between courier and express activities began to disappear. The former couriers were companies providing fast and reliable delivery services, usually oriented to international markets. They used to employ commercial air routes. Meanwhile, national express companies organised fleets of trucks and small aircraft without relying on scheduled air routes, so they were able to carry large items on an urgent basis but supporting high fixed costs. Both activities, courier and express, have in common the provision of faster and more reliable transport services than the ones provided by traditional postal operators. According to the need to respond to new demands, transportation techniques were rapidly improved and couriers and express national companies began to compete in the same global delivery market: couriers started operating with owned fleets and express carriers began to use courier services where traffic was insufficient to charter their own aircraft (CitationCampbell, Rise of Global Delivery Services). Throughout this article, we will take both courier and express services as parts of the same express delivery market. 9.CitationOxford Economics, “Economy Impact of Express Carriers.” This is the last report published by Oxford Economics, referring to the 2010 economic year.10. United Parcel Services (UPS) was founded in 1907 in Seattle and FedEx in 1971, in Little Rock (Arkansas).11. Deutsche Post-DHL begins its history with German operator Deutsche Bundespost and the American company DHL established in San Francisco in 1969. Deutsche Bundespost was privatised between 1989 and 1995 and changed its name to Deutsche Post. In 1998, Deutsche Post bought 51% shares of DHL. The remaining 49% was acquired in 2002. Deutsche Post-DHL was beyond the control of state on 14 June 2005 when the financial institution KfW Bankengruppe bought shares in this company valued at €2 million. DHL Express is the division responsible for courier. CitationSavignano, Multiple Identities of an Enployer, 38–40. TNT, which was established in 1946, also belongs to this group of companies. In 1996 TNT was acquired by the Dutch national company which had been privatised in 1986 and renamed PTT Nederland and, since 1994, Royal PTT Nederland (KPN). In 1998, the postal division of the company (including TNT) have demerged from KPN and are listed separately on the Amsterdam Stock Exchange as TPG (TNT Post Group). In 2005 TPG renamed itself to TNT and, one year later, sold its logistics division to Appolo Management. Since then, TNT has focused its business in courier and postal activities. In 2011, it was decided to separate both divisions. This transaction implied the creation of a new express carrier, TNT Express.12. The American operator UPS announced the acquisition of TNT Express, the express carrier subsidiary of the Dutch group, in March 2012. Recently, this acquisition failed. In January 2013 the European Commission announced that it was working towards proposing a prohibition decision, pointing out that the merger would mean a threat to competition in several European markets.13.CitationTucker, Fundamentos de Economía, 39.14.CitationUniversal Postal Union, Acquisitions, Mergers and Strategic Alliances.15.CitationA.T. Kearney, “Estudio del Mercado de Transporte.”16.http://www.ine.es.17. In 2010, the five top companies in the business owned a joint market share of 44.3% and the 10 top ones 63.2%.18. Munuera Alemán and Rodríguez Escudero made a first classification that we have used and modified. CitationMunuera Alemán and Rodríguez Escudero, Estrategias de marketing, 529.19. DHL Express Iberia, subsidiary of the German group, appeared from the integration of the Spanish carriers Danzas and Guipuzcoana.20. Correos Group, was formed after the merger of the former Correos with its subsidiaries Chonoexprés, Correos Telecom and Nexea. CitationBahamonde, Martínez, and Otero, El Palacio de Comunicaciones.21.CitationTàpies, San Román, and Gil, SEUR. 70 Años de Entrega, 17–39.22. Justo Yúfera was born in Barcelona in 1920. His family moved to France when he was a child. He lived much of his youth between France, Cameroon and Guinea. Jorge Fernández was also born in Barcelona. Fernández also belonged to a family without financial resources. Jorge Fernandez left SEUR in 1985. Yúfera remains as Honorary President of SEUR. Interview with Justo Yúfera Cerdán, SEUR's founder (October 28, 2010); “CitationAl habla con Jorge Fernández,” 14; “CitationAl habla con Justo Yúfera,” 14.23. “CitationAl habla con Jorge Fernández,” 14–15.24. From 1959 to 1975 Spain experienced the most intense and uninterrupted growth in its history. Gross domestic product increased in real terms at an annual rate above 7%. CitationSerrano Sanz and Pardos Martínez, “Años de Crecimiento del Franquismo,” 369.25. Interview with Ramón Mayo, ex Vice-President of SEUR, President of SEUR Foundation and owner of Alicante franchise (January 21, 2010).26. Several partners have confirmed the role of Mayo. Interview with Justo Yúfera, SEUR's founder (October 28, 2010); Interview with José Fuentes, former owner of Bilbao franchise (March 21, 2011); interview with Manuel Valle, ex-president of SEUR (May 2011); interview with Julián Recuenco, Vice President of Quality and Operations of SEUR (February 11, 2011).27. Interview with Fernando Rodríguez Sousa, Ex-CEO of SEUR (February 15, 2011).28. SEUR España Inc. was formally constituted on December 21, 1984. The headquarters were in Madrid. SEUR Organization Statutes (1987).29. Formerly, the brand belonged to the founder Justo Yúfera.30. Interview with Carlos Sanza, director of the Corporate Legal Advice Department of SEUR (March 3, 2011); Interview with Daniel Fernández de Lis, former director of the Corporate Legal Advice Department of SEUR (April 14, 2011).31. Interview with Fernando Rodríguez Sousa, Ex-CEO of SEUR (February 15, 2011). The Spanish press published the news on April 25, 2002. It was published in Expansión, Cinco Días, and in national newspapers such as ABC, La Vanguardia and El País.32. Interview with Carlos Sanza, director of the Corporate Legal Advice Department of SEUR (March 3, 2011); interview with Daniel Fernández de Lis, director of the Corporate Legal Advice Department of SEUR (April 14, 2011); “Franchise Agreement (2003)” issued by the Corporate Legal Advice Department.33. Interview with Yves Delmas, President of SEUR (February 25, 2011).34. The purchase of the company is covered in detail in the Proceedings of the Annual General Meeting and in the Proceedings of the Board of Directors of the Company that we have consulted.35.CitationPowell, “Neither Market nor Hierarchy,” 323–7.36.CitationPowell, “Learning from Collaboration,” and CitationPowell et al., “Network Dynamics and Field Evolution.”37.The Oxford Handbook of Business Groups includes case studies from Japan, Taiwan, South Korea, China, Thailand, Singapore, India, Argentine, Brazil, Chile, Mexico, Israel, Turkey, Russia and South Africa.38. Law 27/12/1947, BOE, December, 28.39. Law 16/1.987, July 30, BOE July 31.40.CitationPowell, “Neither Market nor Hierarchy,” 326.41.CitationCope, “Toward a Dynamic Learning”; CitationHamilton, “Entrepreneurial Learning in Family Business”; CitationTaylor and Thorpe “Entrepreneurial Learning.”42. There is an extensive literature explaining why a firm uses franchising as an entrepreneurial strategy rather than company ownership and the consequences of these decisions. From the agency theory see CitationBrickley and Dark, “The Choice of Organizational Form”; CitationCaves and Murphy, “Franchising”; CitationFama and Jensen, “Separation of Ownership and Control”; CitationJensen and Meckling, “Theory of the Firm”; CitationLafontaine “Agency Theory and Franchising”; CitationCombs and Ketchen, “Why do Firms use Franchising?”; CitationLafontaine and Slade, “Vertical Integration and Firm Boundaries.” Oxenfeldt and Kelly, and Carney and Gedajlovic explain franchising decisions from the resource scarcity perspective. CitationOxenfeldt and Kelly, “Successful Franchise Systems”; CitationCarney and Gedajlovic, “Vertical Integration in Franchise Systems.”43. The more valuable the brand name, the greater the risk of opportunistic franchisees. CitationNorton, “Franchising, Brand Name Capital”; CitationMichael, “Effect of Organizational Form.”44. Knowledge is an important asset in the franchising context and its learning process requires an investment of time by franchisees not always willing. Specifically, tacit knowledge is time-consuming and requires observation, demonstration and experience. CitationHansen, “The Search-Transfer Problem”; CitationHansen, “Knowledge Networks”; CitationVon Hippel, “Sticky Information”; CitationZander and Kogut, “Knowledge and Speed of Transfer.”45.CitationColpan, Hikino, and Lincoln, Oxford Handbook of Business Groups, 7.Additional informationNotes on contributorsElena San RománElena San Román is assistant professor of Economic History at Universidad Complutense de Madrid, Spain.Paloma Fernández PérezPaloma Fernández Pérez is assistant professor of Economic History at Universitat de Barcelona, Spain.Águeda Gil LópezÁgueda Gil López is PhD student in Economics at Universidad Complutense de Madrid, Spain.