Back when Vanchai Chirathivat was busy navigating the Central Group through the 1997 financial crisis, he also thought deeply about how to keep the Chirathivat clan together as one big family.
He had become the third leader of the Chirathivat family after the death of his elder brother, Samrit Chirathivat, who took over the business from his father, the late Tiang Chirathivat.
Tiang, whose three wives bore him 26 children, had set up a small grocery store in Thon Buri, before moving to Si Phaya. In 1947, on Charoen Krung Road, he established Thailand's first modern department store, which sold clothing, shoes, imported books, cosmetics and small appliances. A chain soon materialised with branches in Wang Burapha, Yaowaraj and then Silom.
Half a century later, Vanchai realised that changes needed to be made in order to manage the assets of the Central Group, maintain family traditions and attend to clan members' welfare. From Wal-Mart to Marks & Spencer, he realised, most of the major retail businesses in the world are family-owned. And they all had to go through a transition, in which a well-structured system had to be set in place to allow business expansion and handle the interrelations between family members.
Vanchai looked carefully at the situation. The Central Group commanded total assets of around Bt40 billion and employed some 40,000 people. Meanwhile the Chirathivat clan itself had grown too, with at last count 169 members, 102 of whom used the Chirathivat surname. Of the latter, 52 were male and 50 female.
Vanchai realised he would need outside help to transform such a huge family business. Fortunately at this time he was close to Viroj Phutrakul, who was experienced in managing a multinational company and who had just retired from the Anglo-Dutch consumer-product giant Unilever Thai Holdings.
"The biggest challenges for me in restructuring this well-established family business was to create family discipline, to develop long-term business potential and to promote an orderly succession plan for the Chirathivat family members," said Viroj.
Viroj wrote "Business Charters" as "guidelines" for family change. It aimed to promote transparency and professionalism.
"The restructuring of the family's businesses is, for me, a long-distance journey. But at least the road map is clear and I can see the light at the end of the tunnel," Viroj said.
Viroj also played a key role in advising the Chirathivat family to set up a family council to look after all family affairs, including education and ethical issues.
Viroj said that the restructuring of the Central Group had been divided into three major pillars - ownership, management and family membership.
According to Viroj, the Chirathivat family needed to define and implement its core business strategy and to divest non-core activities at the appropriate time and at the right price.
Viroj defined the Chirathivat family's core businesses as retail, trading and marketing, real estate, hotels and food.
He added that a Central Group board had been established to represent the group's shareholders and family members, as well as to monitor the business direction of the family.
Meanwhile an executive committee representing the management team has been established to oversee policy and strategy planning as well as day-to-day operations.
Each of the family's business units, said Viroj, is overseen by a CEO who reports directly to the executive committee.
Author: Kwanchai Rungfapaisarn, Thanong Khanthong
Source: THE NATION (Apr 4, 02)
From : http://www.siamfuture.com/ThaiNews/ThNewsTxt.asp?tid=1241
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