Evaluation of the Case in 350 words: (Resolving Conflict Using Incentives)
A few years ago, Abilio dos Santos Diniz, Brazil's most prominent retailer, was engaged in a major conflict with his business partner, Jean-Charles Naouri, the CEO of Group Casino company. When Diniz sold large stakes in his company, Grupo Pao de Acucar, to Casino he lost the operational functions of his business. Diniz first agreed to transition his firm to Naouri but subsequently changed his mind and opted against it. According to Umans et al. (2020), because of their long-term dedication to the company, family CEOs would rather hold on to power and may have a hard time letting go of their position. The difficulty of family CEOs in relinquishing power shows undesirable sentiments including anxiety and grief, the stress of quitting and confronting one's own demise, and the heartbreak of giving up prestige in the family and the company. It may have been difficult for Diniz to let go of his business, which was founded by his father many years ago. Since then, his relationship with Naouri has become increasingly strained due to the issue of control of Acucar. The conflict intensified when Diniz became a major stakeholder in Carrefour, a formidable competitor of Group Casino. As the majority stockholders, Nouri and Casino have gained control of Diniz company. On the other hand, Diniz, as chairman of the board, was unwilling to entirely relinquish control of his company since it would mean the end of his family-owned business started by his father. As a result, a court battle ensued over Acucar's ownership. The future of Acucar and its thousands of employees was compromised and were dependent on the outcome of the dispute between Diniz and Naouri.