Niagara has a horizontal organizational structure, with Ed Merski being central to the operations of the company. The company comprises four separately incorporated companies, which means that they can be run separately, and others may offset the risk in any of the companies. As the co-owner and chief executive, the success of the company can largely be attributed to his leadership and skills. He believes that Niagara’s resilience is down to his persistence in finding expansion opportunities and human capital development (p. 767). He is in charge of negotiating supplier contracts, dealing with the sales force and making decisions. His patriarchal role also gives him authority, which the company could lose and give way to destructive sibling rivalry if he left. However, the company has a wealth of reliable talents that could almost readily replace Ed. Other than Luke, other senior managers have been in the company for a long time and had the experience and skills to succeed. These include David Jones, Judy Holt, Marcus Giampolo and Gregg Seppi. Effectively, it highly unlikely that his departure would leave a huge leadership void and/or jeopardize the company’s future.
Nancy finds its exciting to run a small firm than work for a larger organization. She wants to gradually assume responsibility for the company between five and ten years. She intends to increase her ownership interest within the same period. She anticipates her leadership to carry on with the company’s aggressive expansion strategy and strong bottom line. She hopes to create a positive organizational culture and create a company that would be an industry leader, and once she achieves this, she hopes to become an equally successful philanthropist. While her conduct in the past leaves her commitment to the company in doubt, she has plenty of even more lucrative opportunities (given her education), which she has chosen to forgo in order to return to Niagara. Effectively, it is highly likely that she is genuine in her motivation and intentions.
Luke has vast, hands-on experience and knowledge of the company. He coordinated shipments from the factory and served as a general trouble-shooter. His management experience is considerable and can provide the continuity that Ed fears would lack in his absence. Further, Luke has important personal attributes that Nancy may come short at, including frugality, working long hours, but seems resistant to further expansion (p. 771). On the other hand, Nancy’s commitment to the company is doubtful, and she lacks hands-on management experience (that both Ed and Luke have). In fact, unlike Luke, she only considered working for Niagara after she grew tired of working for a large firm (772).
She can bring ideas, technical, managerial skills and most importantly an ambition that could the take the company to even higher success. The difficulty is that choosing Nancy over Look could touch off resentment on his part, and any decision either way is likely to result in a bitter sibling rivalry. The best alternative is to redesign the company’s organizational structure to give joint deputy positions (and an ownership policy) for both Nancy and Luke, possibly by giving them control over two companies under Niagara. In this way, it would be possible to get the best of both Luke and Nancy, before gradually withdrawing from the daily management of the firm whenever the situation permits.
Sharma, Pramodita and Brian Smith. "Ed’s Dilemma: Succession Planning at Niagara Paving." Entrepreneurship, Theory & Practice, Blackwell Publishing Ltd (2008): 763-774. Print.