Page 109 - Stakis Consolidated Teaching Note

thinking. Hence, the resignation of John Loughay, as chief
executive, for twelve years, when Andros was appointed

managing director. Figure 23 demonstrates that the

appointment of Andros also meant that with the Stakis
family, as shareholders, had an interest at every level in

the management chain, which meant that every decision

made, was in the Stakis’ families best interest, rather than

the organisation. Weakness.

Family and Professional organisations

Family Organisation Professional Organisation
Share Holders Share Holders

Chairman Chairman
Sir Reo Stakis Sir Lewis Robertson

Andros Stakis David Michaels
CEO
CEO

47 Directors Divisional Directors
Directors
Family/Unqualified
Employees Managers

Family Company Professional Company
Run by family members (little experience) Structured organisation
47 Uncontrollable directors Professionally operated
Best manager for the job
Top to bottom management
Figure 23

Traditionally, the shareholders choose the chairman who
then appoints the CEO. The CEO chooses the directors

and managers and they select the employees.

The Stakis family with their enlarged shareholding
effectively were the shareholders.