Chairman of the Board Eric Molson and Corporate Strategy: Letting CEOs Do Their Jobs … or Not

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CASE STUDY. Eric Molson’s corporate strategy.

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Chairman of the Board Eric Molson and Corporate Strategy: Letting CEOs Do Their Job . . . or Not : summary

In 1988, Eric Molson became chair of the board of The Molson Companies Ltd. (TMCL). Founded in 1786, the company had focused on brewing beer until the mid-1960s, when it decided to diversify to promote its growth. In 1988, TMCL had four main divisions: brewing, chemicals, retail merchandizing, and sports (the Montreal Canadiens hockey team). Despite nagging doubts about diversification, Eric initially embraced the conglomerate strategy mapped out by his predecessors for the past two decades. He later realized, however, that it was time for TMCL’s reign as a conglomerate to end. He firmly believed that Molson’s future lay in going “back to beer” and becoming a global brewer. The case explains how, between 1988 and 1999, Eric and his board hired and fired several CEOs – John Rogers, Mickey Cohen, Norman Seagram, and Jim Arnett – in an effort to return Molson to its core business. Finally, in 1998, Molson’s regained full ownership of Molson Breweries and, in 1999, Molson’s sole focus returned to brewing. However, much remained to be done to secure Molson’s position as a global player in the brewing industry. The case lays the groundwork for a discussion of strategy and corporate governance in the context of a large family-controlled business.

Teaching Objectives

Understand the specificity and complexity of family-controlled businesses, especially in terms of governance. Analyze the business strategies and key priorities of family businesses. Analyze the agency problems related to the governance of large public, family-controlled businesses.

Main Themes Covered

  • Family business
  • Strategy
  • Corporate governance

Concepts and Theories Related to the Case

  • Family business
  • Strategy
  • Corporate governance

Other Information

Teaching notes are available to the teacher only. Please reach out to Centre de cas HEC Montréal.

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