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business
valuation measuring and managing
Questions and Answers of
Valuation Measuring And Managing
=+10. Transgenerational value creation emphasizes business and investment management. What are the respective roles that these two management spheres play in transgenerational value creation?
=+9. Which arguments speak against diversification of family wealth if a family seeks to achieve transgenerational value creation?
=+8. Why is it challenging for entrepreneurs to switch from the role of business manager to the role of investment manager?
=+7. What are the critical attributes of resources and resource management in the longevity perspective? What are they in the transgenerational value creation perspective?
=+6. What are the building blocks of transgenerational value creation? Please include an example for each element.
=+5. Why is the performance of a single firm not the most critical measure of success in the context of transgenerational value creation?
=+4. Why is a focus on longevity of the family firm limiting for families pursuing transgenerational value creation?
=+3. What are the three strategic drivers of family firm longevity?
=+2. Family firms and disruptive change: what is meant by the term ‘family innovator’s dilemma’?
=+1. Please describe the advantages and disadvantages of family firms with regard to the management of change?
=+• Which family governance structures and activities should we set up to support cohesion and identification?
=+• How do we ensure that our family identifies with our business activities?
=+• Are we a cohesive family?
=+• How do the returns from our various businesses compare to alternative investments with comparable risk profiles?
=+• How good is our ability to monitor the performance of total family wealth?
=+• For how long can family members execute a certain role?
=+• What are the requirements for family members to enter these roles?
=+What roles do we expect family members to take in the management and supervision of the firm(s), ownership, family committees and wealth administration?
=+• What reporting, incentive, control and sanctioning systems do we need to run our investments?
=+• Are the corporate and ownership governance regulations up to date so that we have good control over the assets we control?
=+• Do we ensure professional governance over the businesses through tight monitoring by the family and the involvement of nonfamily experts?
=+• Who inside or outside the family has the business intelligence needed to run a portfolio of businesses?
=+• Do we have the expertise needed to run a company outside our original industry?
=+• Do we possess the necessary expertise inside the family and from nonfamily experts for business and investment management?
=+• Have we set up a wealth governance structure that keeps liquid family wealth together with the aims of protecting wealth, supporting the firm and eventually investing in new businesses?
=+• Are we willing to keep our business assets together so as to invest as a family group?
=+• Do we reinvest the harvested resources in promising future businesses?
=+• Are we willing to exit a business that is declining or when there are more attractive alternative business opportunities?
=+• Do we invest sufficient resources in our firm(s) so that we can enter promising new businesses?
=+• How risky are our combined activities?
=+• What are the opportunities and the risks related to holding a very limited number of investments?
=+• Do we invest most of our assets in a limited number of businesses, thereby avoiding excessive diversification?
=+• How do we ensure that next-generation family members stay interested in the business?
=+• What are the impediments to being more entrepreneurial and what can we do about them?
=+• Are we proactive and tackle opportunities before others do so?
=+• Do we delegate decisions making to lower hierarchical levels and businesses?
=+• Do we take enough entrepreneurial risks?
=+• Are we innovative enough?
=+3. Which features of transgenerational value creation do you recognize in this case?
=+2. How would you assess the Quandt family’s ability to control its wealth?
=+1. How would you assess the diversification of the family’s wealth?
=+3. How can Ferdinand Ruesch ensure transgenerational value creation given the new stake in Heidelberg?
=+2. Would you consider the sale of Gallus Holding AG to Heidelberg to be a failure? Why or why not?
=+(b) a transgenerational value creation perspective?
=+1. How do you assess the sale of Gallus Holding AG from: (a) a succession perspective and
=+3. To what degree does the wish to uphold personal ties in the family and firm hamper entrepreneurship? In what ways does it do so?
=+2. To what degree do reputational concerns related to the family and firm hamper entrepreneurship? In what ways do they do so?
=+1. To what degree does the desire to retain transgenerational control in family hands hamper entrepreneurship? In what ways does it do so?
=+3. What advantages specific to the family firm could Hugendubel leverage when aiming to ultimately adopt the new technology?
=+2. What (family-specific) elements can you identify that impeded Hugendubel’s adaptation to the changing environment?
=+1. Can Amazon’s entrance into the German market be assessed as the emergence of a disruptive technology for German book retailers? If so, why?
=+4. How persistent are we in implementing change?
=+How are we going to implement the required changes?
=+3. What are the radical innovations in our industry?
=+2. How helpful are our networks and are our employees when it comes to implementing radical change?
=+1. How helpful are our networks and our employees when it comes to implementing incremental change?
=+4. Where can we obtain the capital and knowledge required to invest in the future?
=+3. What are the maximum investments that we are willing to make as a family to adapt to the changing environment?
=+2. Do our bureaucracy and hierarchy slow decision making?
=+1. How fast are we in our decision making in the face of change?
=+ Are we led to negate the need for change or to try to postpone it?
=+3. How do the threats to our SEW affect our interpretation of change?
=+ how does it affect our family firm’s identity, our relationships with stakeholders (e.g., employees, suppliers or family members) and our family’s control over the firm?
=+2. How does a particular change affect our SEW?
=+1. Do we understand our long-term focus as a means to embrace change or negate change?
=+3. Do we take new entrants and technologies seriously?
=+2. Do we openly discuss trends with partners outside our established network?
=+1. How closed is our network?
=+8. What form of wealth distribution would you recommend for the Bernet family?
=+7. What is the value of the Bernet parents’ total wealth?
=+6. How could the succession be financed if Marc takes over?
=+5. For the legal context in which you are embedded, how would you legally structure the succession?
=+4. According to which sale price should the company be passed on within the family?
=+3. What does Marc Bernet consider to be a fair price?
=+2. What are Peter Bernet’s considerations concerning a fair sale price?
=+1. What is the equity value of Bernet AG?
=+7. Describe the use of a pass-through entity in a leveraged buyout (LBO).
=+6. What are the pros and cons of a private equity recapitalization?
=+What can the owner/managers do about it?
=+5. Why is the fragmentation of shareholdings problematic for family firms?
=+4. What is the difference between an employee stock ownership plan (ESOP) and an MBO?
=+3. What are the pros and cons of trusts?
=+2. What are the arguments in favor of and against estate tax?
=+1. Describe the differences between estate and gift tax.
=+3. What are the legal and tax implications for me?
=+2. What are the opportunities and risks for me?
=+1. What is the legal setup of the takeover?
=+8. What financial, legal and tax advice do I need to set up the succession?
=+7. How will I manage the proceeds from the sale?
=+6. Does my firm qualify for private equity investment? If yes, should I go for a private equity recapitalization, or do I want to exit completely?
=+ What are the pros and cons of a an MBO?
=+5. If the firm is transferred to employees: should an employee stock ownership plan (ESOP) be set up?
=+we finance the buyout of the other owner(s)?
=+4. If the firm is sold to a co-owner: what type of buy–sell agreement do we have in place? How do
=+b. What are the pros and cons of setting up a trust?
=+a. Which trust structure suits my goals?
=+3. When setting up a trust:
=+2. If the firm is sold to family members: what is an appropriate price?
=+c. How are the family members who are excluded from the firm treated?
=+b. How much testamentary freedom do I have?
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