Family Business Case Study: Laboratorios Roe
Violeta Cuba Cavero
S00602695
* Due to privacy policies financial figures have not been able to be revealed
2nd of April 2013
History
In 1953, a Doctor called Carlos Roe Gómez founded Laboratorios Roe in
Lima, Peru. At the beginning, it was a general clinical laboratory; nowadays,
after more than 60 years, Laboratorios Roe is considered as the first private
centre of clinical analysis in the country.
Its principal competitor is
Laboratorios Blufstein, which has been in the market since 1955 and currently
has thirteen centres; ten of them are located inside clinics.
Important Dates and Facts

In 1962 the Laboratory started to operate in one of the most recognized
clinics of Lima: San Felipe Clinic.
In this manner, the laboratory had
the opportunity to offer their services to patients inside the clinic.

Due to the high demand, in 1982 the Laboratory obtained two
automated machines for high-volume biochemical analysis technology.
These machines are capable of doing 360 different tests per hour.

In 1993 the Lab started to offer tests for detection of risk of Down
syndrome for pregnant women.

In 1997 they launched their web page and in 1998 patients were able
to check their results online (Web page: http://www.labroe.com).

From 2008 to 2011 they started to open new centres across Lima City.
Services offered
Since the beginning the company was the pioneer in implementing their
service at home across Lima city. Patients can require this service at the
comfort of their own home any time, any day. This was specially created to
address the needs of old or sick people that were incapable of going directly
to a centre.
Because the company is always looking for satisfy people’s health needs,
Laboratorio Roe offers more than 3,000 different types of analysis (HIV,
Hepatitis A-B-C, blood tests, among others) and diagnostics giving as a result
an approximately of 750,000 analysis per year.
Furthermore, the patients are able to check their results through the web
page. Once a patient has had an analysis, it has the opportunity to pay
before the service or to pay once the analyses are ready. If they pay after the
service, they only need to log in to the laboratories’ web page with a user
name and password and they will be able to see all their history analysis.
However, this service will only be available if the patient has paid after having
the analysis.
Moreover, this company offers a call center where patients can call and solve
any doubts they might have about the services offered, prices and even the
laboratories’ locations.
Additionally, Laboratorios Roe has recently launched a new blog called
roewebnews. This blog offers news every week and patients can read about
health news such as new ways to prevent diseases, new types of analysis,
description of the analysis they offer, among others.
Present
Currently, the Laboratory has four diagnostician’s clinical pathologists; one
clinical haematologist and over 100 medical technologists specialized in the
latest laboratory techniques. Additionally, they are around 180 employees
working in the company.
Nowadays the company has more than 15 centres located all across Lima
and one centre located in on of the main cities of Peru: Arequipa. Part of their
future plans of expansion is to open other laboratories in other principal cities
of Peru such as Cusco, Trujillo and Chiclayo. With this, the company will
have presence in the principal cities, where the majority of the population is
located.
Strategic Alliances
Laboratorios Roe has certain alliances with other Institutes and Laboratories
around the world.
The purpose of this is to be updated with the latest
information about medical technology and certain diseases.
Quest
Diagnostics Nichols Institute, de California - USA, is their most important
alliance.
Additionally, the following Laboratories also are part of their
alliances:

Speciality Labs

Baylor
DNA

Diagnostic
Laboratory.

Immunosciences Lab Inc.

Immunolab laboratories.
Laboratorio de la Clínica
Mayo en Minesota,

UCSD
Autism
Research
Laboratory

Laboratorio Balagué Center
in Spain
Staff
Doctors

Dr. Carlos Roe Battistini (family member)

Dr. Eduardo Roe Battistini (family member)

Dr. Jorge Manuel Leiva Beraun (non-family member)

Dr. José Gálvez Dañino (non-family member)

Dr. Juan Carlos Gomez de la Torre (non-family member)
Administrative

Sr. Cristian Concha Girardi – General Manager (non-family member)
None of the non-family members know well the possible future generation.
This makes the succession planning a difficult transition due to the fact
possible conflicts might appear.
Non-family members that have a strong
relationship with the company might feel it should be their turn to take over the
company. However, this will never happen according to the family policies.
Unless, none of the possible future generation is interested.
Family involved
Currently, two brothers from the second generation, Carlos and Eduardo Roe,
own Laboratorios Roe.
Each of them has a different shares percentage,
which cannot be revealed due to confidentiality. None of the wives of both
brothers are involved in the company.
Until now, none of their sons or
daughters (10 in total) is involved in the business (See appendix 1 for the
family tree).
Family Policies
Along with this long trajectory, family members have always preferred to not
involve the wives in the business. However, sons or daughters are more than
welcome to join the business. At the moment, one of the most important
requirements is that any family member who wishes to run the business in the
future must be a doctor. However, due to the fact that at this moment none of
the future generation is a doctor, it might be an opportunity to change these
policies.
What is going to happen next?
Ownership Structure
In ten years or less, members of the second generation will be ready to pass
their business to the third generation. However, at the moment no family
member is interested yet in taking the business.
None of the sons or
daughters is a doctor, which will make the succession planning tough giving
the fact every family member has been a doctor. It could be possible that the
third generation starts getting involved and the current owners chose not to
withdraw their position, on the contraire they can continue running the
company until they consider they can make the third generation full owners of
the shares.
Shared Leadership
If Carlos and Eduardo keep on thinking that the next generation who gets in
charge of the business should be a doctor, then one of their sons or
daughters will have to follow their path. Otherwise, no one knows what will
happen. Or may be, they will change their mind and let the third generation
run the business without medical knowledge or they will share leadership with
the any son and daughter who is interested in getting involved in the
business. If this happens, it is considered it will be necessary to estipulate
each role and make clear that now both parts are leading the company.
On the other hand, the business will continue expanding across the country
and take more presence in the market and always with its high quality
standards. Therefore it is necessary more support to continue growing and
the current owners considered the family members are the best choice to do
so.
Furthermore, there is an International Company interested in buying their
shares. The name of the company cannot be revealed due to confidentiality.
If the current owners decide to sell the company’s shares, then this family
business will end in the second generation.
In this manner, the future
generation should think twice if they want to be involved or not.
Theories and frameworks
Family business can face three different types of challenges, modernising outdated skills, managing transitions and raising capital (Leach, 2007). In this
particular case, the second generation considers the business should be run
by a certain way, this is, preferable by a doctor. However, it might happen
that the third generation prefers to manage the business from an
administrative perspective.
This might be a significant change that could
affect the relation between the family members.
Furthermore, family businesses differ from any other business in terms of
values, beliefs and behaviours they have. Thus, there are many factors in
family’s relationships that can affect the business.
An effective way to
understand this is looking at the relationship between the family and the
business is to see both, family and business, as systems (Leach, 2007) (See
Appendix 2)
The family system is based on shared emotions between family members.
While the business system is based on tasks and results.
It is possible that in Laboratorios Roe, both brothers share values and
emotions and have strong relations with their sons and daughters. However,
for them it is crucial that the next generation should have a broad knowledge
about medicine and only having a Degree in Business Administration is not
enough to run this company and obtain exceptional results as up to date.
The family business dimension, family, ownership and business (see
appendix 3), takes an important role in the succession process. However, in
order to have a successful succession, it is indispensable for these
dimensions to be related between them and work together appropriately.
Questions
1. What will happen if the third generation decides not to follow a medical
future? Will Carlos and Eduardo let the third generation to run the
business only with a business administration degree?
2. Since the third generation doesn’t have any medical knowledge, it is
hard for them to share and understand the way of thinking from a
medical point of view.
Will the third generation consider studying
medicine, so the business doesn’t get affected?
3. Will Carlos and Eduardo agree in hiring a non-family member as a
doctor and let the third generation run the business with their current
studies?
4. Carlos and Eduardo would be interested in sharing the leadership with
any member of the third generation who wants to get involved? Will
this affect the future of the company?
References
Datos Peru (n/a) Available at: http://www.datosperu.org/peru-laboratorios-roesa.php (Accessed 20th of March 2013)
Directorio
empresas
(2010)
Available
at:
http://directorioempresas.weboperador.pe/go.php?site=MzU6MjM3OjE2Njgx
(Accessed 20th of March 2013)
Laboratorios
Blufstein
(2012)
company
web
page.
Available
at:
http://www.blufsteinlab.com/index.php?mod=pagina&com=pagina&id=resenahistorica&opcID=32 (Accessed 2nd of april 2013)
Laboratorios Roe (2012) Company web page. Available at: www.labroe.com
(Accessed 20th of March 2013)
Leach, P. (2007) Family Businesses The Essentials London: Profile Books
Ltd.
Vries, M. and Carlock, R. (2010) Family Business on the Couch: A
Psychological Perspective Chichester: John Wiley & Sons Ltd.
Appendix
Appendix 1: Family tree
Carlos Roe
Founder
Son: Carlos Roe
Son: Eduardo Roe
Owner 1
Owner 2
4 children:
 Carolina Roe (30 years old)
Veterinary and has her own
business.
6 children, all of them have
 Eduardo Roe (28 years old)
different studies, none of them is
Ba in Business Administration,
a doctor:
works in Colgate Palmolive
 Carlos Roe
 Ximena Roe (28 years old)
 Daniela Roe
Lives in Barcelona and studies
 Andres Roe
art
 Titi Roe
 Lorena Roe
 Adriana Roe (22 years old)
Studies Business
Appendix 2: Family System
FAMILY
Emotion-Based
Subconscious behaviour
Inward-looking
Minimising change
FRICTION
AND
CONFLICT
BUSINESS
Task-based
Conscious behaviour
Outward-looking
Exploiting change
Source: Leach, 2007
Appendix 3: Family business dimension
Source: Vries, M. and Carlock, R., 2010