Northwest Security Services

By Christopher Flanagan, H. Grousbeck
2001 | Case No. E103
This case examines issues encountered by a third-generation family-owned business. Northwest Security Services (“NSS”) is a 55 year-old company that has developed a rich history since its founding by Ernest Wilson, a less-than-affable, junior college educated family patriarch. The business challenges that NSS faces are similar to those of any company, but the fact that the company is family-owned and operated creates a host of new challenges for those involved. The majority of the case is spent focusing on several of those issues that are unique to family-owned businesses, such as: bringing younger generation family members into a business; underperformance by certain family member employees of a company; asset diversification considering much of a family’s wealth can be tied up in a business; establishing a corporate advisory board comprised of non-family members; division of ownership; payment of dividends; respective rights of family employees and non-family employees; transferring authority and power in a family business to younger family members; and the sometimes hazy line between where business stops and family begins. This case examines issues encountered by a third-generation family-owned business. Northwest Security Services (“NSS”) is a 55 year-old company that has developed a rich history since its founding by Ernest Wilson, a less-than-affable, junior college educated family patriarch. The business challenges that NSS faces are similar to those of any company, but the fact that the company is family-owned and operated creates a host of new challenges for those involved. The majority of the case is spent focusing on several of those issues that are unique to family-owned businesses, such as: bringing younger generation family members into a business; underperformance by certain family member employees of a company; asset diversification considering much of a family’s wealth can be tied up in a business; establishing a corporate advisory board comprised of non-family members; division of ownership; payment of dividends; respective rights of family employees and non-family employees; transferring authority and power in a family business to younger family members; and the sometimes hazy line between where business stops and family begins. Teaching Note available.
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