SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT I

MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

RUNNING HEAD:

Title of the Case: SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT

MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

Submitted to: Prof. Maria Corazon Cuadra- Gabayan, CPA, MBA

Submitted by: DIVINE GRACE S. BASALO

ATENEO DE DAVAO UNIVERSITY

SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT II
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

Abstract

In this paper, it unfolds a history of how a particular family-owned business started,

how it handed down to 2nd generations and what were the problems incurred. According to

Motwani (2015), Family owned business outperform any other form of business organization.

Family-owned business is far more challenging than a usual form of corporation. Challenges

like it is less structured, conflict of interest may occur and personal problems may involve.

Interviews to the third generations happened, how well they know about their family roots,

how their parents or uncle and aunties solved the problems. The third generations learned what

the past generations failed to recognized, established and applied to their business. This

generations now are more hands on in the operations and they said they were now more united

in terms of decisions on what’s good for the organization. They continue what their grandfather

and grandmother built for them. They educate, train themselves to fit in the management

positions that values ethical issues, and keep their personal problems separated from the

business issues. Also, experienced from the old employees who worked for almost 30 years

has been asked about their situation during the time of downfall. Stories has been retold and

they were emotional to reiterate the sufferings they fell at the time of one family member ruled.

They share the comparison of what it’s like to be governed by the founder itself and by the

next generation. It can tell that founders/incorporators were far more concerned about the

whole welfare of the organization than the next one.

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MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

Methods

The company history was retold by the old employees of the company. They were

interviewed personally and consent of the family has been asked for the approval of the said

case. Fictitious company name and names of the involved persons were changed for their

protection.

Background of the Company

Southern Agricultural College is a non-stock, family owned corporation by the Garcia.

By 1980, the late Don Raul C. Garcia, founded the company along with his wife as the treasurer

of the board, and 3 others (in-laws, siblings) as officers of the corporation. The nature of the

business is an educational institution catering agricultural and education courses. It was

situated in the far-flung municipality of the province of Davao del Sur.

The Founder placed his school in a remote area for he believed that everyone deserves

to have a diploma. He envisioned a place where poor people can receive a proper education.

That’s why his tuition fee is much lesser than the other established colleges with the same

quality education for all.

For 10 years, the school ran smoothly through the leadership of Don Raul C. Garcia.

By 1990, the founder died, leaving his widow, Mrs. Faustina Garcia and their 5 children. After

death of the President, the board of trustees immediately elect a new one, with Mrs. Faustina

Garcia as the new elected President of the Corporation and the entry of their eldest Son, Emil

Garcia as the member of the Board.

NEW MANAGEMENT
SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT IV
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

With the direction of the New Elected President, she appointed her son, Emil Garcia,

as the Vice President for Operations, and her youngest daughter, Joy Garcia to be the Finance

Officer. Everything runs smoothly for the past years with their positions, thousands of students

were enrolling from Elementary to College. Truly, they continued what the Founder missioned.

PASSING TO SECOND GENERATIONS

By 1995, when Mrs. Garcia, suffered from heart attacked, she appointed her daughter,

Joy, to be in charge of everything while she’s on leave. Her son, Emil Garcia, was not hands

on in running the business. Therefore, Joy, took charge in handling finance as well as the

operations. While, Mrs. Garcia was away, problem in the corporation arises. Mostly the

members of the board were in different region and doesn’t involve themselves in the operation

except for Emil and Joy. With this, Joy took the chance in malversation of funds. At that time,

internal control was not yet established that’s why whatever Joy commanded to her people they

obeyed.

No receipts had been issued to those students who pay tuition fees. All cash receipts

were immediately collected by Joy and deposited it on her own bank account.

When it’s time for payment of salary, it was found out that cash on bank was not enough

to pay the payroll. Joy immediately announced to the employees that the school can’t pay their

salary on-time due to insufficient bank balance. She just suggested a cash advance. With the

thousands of students at that time, thousands of cash was also collected by the teller, that’s why

employees were curious where did the money of the customers go. These happened every

month for the past year. Employees cannot tolerate this kind of management therefore some of

them resigned from work. Aside from not paying on time of their salaries, she kept on nagging

every employee, reminding them to be thrift, and limiting office supplies per department.
SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT V
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

Mrs. Garcia cannot interfere with his daughter anymore. Even she, as the president,

didn’t received her monthly salaries. Later in 1996, the government agencies sued her for not

paying the remittances of their employees. This was caused the commotion of the Garcia

family. Mrs. Garcia summoned her children with her in-laws as part of the trustees on what

action to take on Joy.

Since Joy is a Garcia, a part of their family, no legal cases had been filed to her. Mrs.

Garcia just sent her to Manila to their other relatives to rest while her mother was cleaning her

name. Mrs. Garcia took over, and with her leadership it went back to normal.

FORGIVE BUT DON’T FORGET

After 2 years, Mrs. Garcia had another heart attacked. This became a way for Joy to be

back in business again. She married in Manila, returned with a husband and child, asked

forgiveness from her family and promise her mother, Mrs. Garcia, not to do it again her deeds

last time. The matriarch forgave her for the sake of her grandchild.

With the came back of Joy Garcia, she also puts her husband to the purchasing

department. It means the husband was in charge of purchasing of supplies and contacting

suppliers. With Joy’s consent, some materials that was intended for the repairs & construction

of rooms, were also used by Joy’s Husband for their own personal used.

The Queen Joy is now back to her business; nagging every employee, collecting cash

from the corporation and depositing it to her own account, delayed of salary as well as not

paying employees’ benefits, thrifting office supplies, incurring company’s debt to different

suppliers, and not paying electricity and water.

With this kind of leadership; instructors resigned, number of students declined,

government agencies were after the company & retrenchment for non-teaching staff happened.
SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT VI
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

Different department heads immediately conducted a meeting asking Mrs. Garcia’s

help. They wrote a complaint letter to the President about the issues of Joy Garcia. All

employees signed a petition letter for Joy Garcia to be oust in the company. This reached Mrs.

Garcia, the President, and immediately called a board meeting. The board decided Joy and her

husband will no longer hold any position at the office and a termination letter was immediately

sent to their home.

ETHICAL RESOLUTION

As Joy, being the sacrificial lamb of the family to alleviate the situation of their

business, it was a hard decision for the matriarch of the family since it was choosing between

her daughter and the lives of many employees of the company. The company learned a lesson

from the past years of declining enrollees and having a bad reputation in the market. The

family/board decided to be hands-on in running the operations. They hired an external auditor

for both the operations and financial. With this, they established proper internal control and

organizational structures. The board, with the leadership of Mrs. Garcia, pay the salaries

payable to the employees, pay their debts, and organized a thorough campaign to different

schools to promote the school. They hired new skilled employees with the promise of paying

salaries on-time. Personal money of the board has been put to the fund of the corporation for it

to be back fully in operating. As years goes by, the company was still owned and managed by

the Garcia. They established more classrooms and offered additional courses. Salaries were on

time, and remittances to the government agencies was their outmost priority. Cleared Job

descriptions were emphasized to all employees especially to the owners to avoid conflict of

interests.

RECOMMENDATIONS
SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT VII
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

According to Steiner (2016), “working with family can be a blessing and a curse.

Challenges were common especially in a family owned-business.” What happened to the down

of the company was because the daughter Joy misunderstood that the money of the business or

the corporation was not her own money to be deposited in her own bank account. Joy was lack

of knowledge in determining how to split the profits of the business or owners’ stakes. She

treated the business as a sari-sari store with the cash collections putting in her own pocket. I

recommend that Management level employees especially the owners must be educated

regarding finance/accounting matters. They should send them to trainings especially the 2nd

Generations of the Garcia on how to run a family owned business.

In Ethical aspect, Joy’s attitudes toward her employees is not a good example of a

leader. It is also against the labor law when an organization is not paying the salaries of their

employees. The act of Mrs. Garcia, being the President and the Matriarch of the family, is a

difficult one. For her, it’s better to lose one than to lose the entire business which is the bread

and butter of her other children. The business should be benefited to all, especially her children

and other employees, not just for one family and putting down others. The act by Mrs. Garcia

was a best example of Altruism. Personal relationship with Joy has been sacrificed for her

concerns to others. In Political aspect, my recommendation for this is that the board should talk

to the concerned one, Joy Garcia, on what really were the issues and a due process should take

place in order for Joy to explained her side.

Lastly, in Economics aspect, the company should see to it that payment of salaries to

employees as well as government mandatory benefits are the priority expense of the

corporation. If an employee doesn’t have the wage that is due to them, then they don’t have the

money to spend for the expenses of their family. Furthermore, debt to different suppliers should

be settled in order to continue the business cycle.

SOUTHERN AGRICULTURAL COLLEGE: THE EPITOME OF GREAT VIII
MANAGEMENT, TO AFFLICTION AND BOUNCING BACK.

References:

Motwani, B. (2015). Impact of Factors of Family Business on the Performance: A PLS-SEM

Study. India: Institute of Management and Research.

Rouvinez, D. (2015). Preparing to be at the wheel- why family business education matters. 3

things to consider when getting the next generation ready to take over the family business.

Switzerland: International Institute for Management Development.