Background J.D. Irving and K.C. Irving founded a sawmill and Irving Oil, respectively, in the late 1800s in Bo touch, New Brunswick. In just over

Background

J.D. Irving and K.C. Irving founded a sawmill and Irving Oil, respectively, in the late 1800s in Bo touché, New Brunswick. In just over 80 years, K.C. Irving’s small business grew into a $6 billion regional energy processing, transportation, retail, media, and marketing company headquartered in Saint John, New Brunswick. It is privately owned and has 7,000 employees, 800 retail sites, operations from 13 marine terminals, and a fleet of tractor- trailers. It produces over 300,000 barrels of finished energy products daily, being Canada’s largest refinery. The company also operates in Eastern Canada, Quebec, and New England, leaving the Irving family among the fifth richest families in Canada. While the three brothers were able to make decisions collegially, their five children have not been able to do the same. The brothers are fearful of escalating tensions among the cousins.

Uncertainty

In 2007, media reports indicated that the three Irving brothers, J.K. Arthur, and Jack were breaking up the 125-year old family business due to a “succession impasse.” The main problem is goal incompatibility between cousins. J.K.’s two sons run J.D. Irving limited, the forestry side of the business; Arthur’s two sons run the refinery side of the business; and Jack’s son” is a bit of an enigma.” Media reports claimed that the five children of the three brothers were unable to make decisions collaboratively and tensions were escalating. Thus, a restructuring was planned whereby the family members would be given the choice of cash or business interests in the company. The future of the Irving family is highly uncertain. There are 24 grandchildren who may want to work in the company’s multiple businesses. It is clear that the ownership structure created by K.C. Irving cannot survive under the leadership of the five cousins who are currently running the organization.

Questions for Discussion

1. What do you think the best plan is for the Irving family to ensure the structure of the organization remains intact?

2. What should the company do to protect their reputation from outside sources and websites such as www.irvingsucks.com and make them seem more socially and environmentally responsible?

3. Do you think a rational model or a political model better describes the Irving Oil organization? Why?