The Economic Cycle, Social Capital, Managament And
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ISSN: 2737-6206 Año 2020 ● Volumen 1 ● Número 4 ● Páginas: 219-241 EDITORIAL THE ECONOMIC CYCLE , SOCIAL CAPITAL, MANAGAMENT AND GROWTH OF THE MEXICAN FAMILY BUSINESS: AN HISTORICAL PERSPECTIVE EL CICLO ECONÓMICO, CAPITAL SOCIAL, GESTIÓN Y CRECIMIENTO DE LA EMPRESA FAMILIAR MEXICANA: UNA PERSPECTIVA HISTÓRICA Javier MORENO-LÁZARO Departamento de Fundamentos del Análisis Económico e Historia e Instituciones Económicas. Facultad de Ciencias Económicas y Empresariales, Universidad de Valladolid. Valladolid, España. E-mail: [email protected] Received: September, 2020; Accepted: October, 2020; Published: 30/12/2020 Abstract: This article describes the institutional Resumen: En este artículo se describen los changes experienced by the Mexican family-run cambios institucionales vividos por la empresa business from the beginning of the 1960s to the familiar mexicana desde principios de los años start of the crisis in 2008, which as a result, has sesenta hasta el inicio de la crisis en 2008, que, acquired even greater strength than that of the como resultado, ha adquirido una fuerza aún state itself, in addition to a very significant mayor que la del propio Estado, además de una presence in the global market and dimensions presencia muy significativa en el mercado global y uncommon in the rest of Latin America. The article dimensiones poco comunes en el resto de argues that government support, non-competitive Latinoamérica. El artículo sostiene que el apoyo del agreements and smooth succession due to the gobierno, los acuerdos no competitivos y la fluida remarkable educational qualifications of heirs, sucesión debido a la notable calificación educativa explains the success of the Mexican family business de los herederos, explica el éxito de la empresa amidst enormous difficulties, which on a number of familiar mexicana en medio de enormes occasions and throughout this period of time, the dificultades, que en varias ocasiones y a lo largo de Mexican economy has had to overcome. este período, la economía mexicana ha tenido que superar. Keywords: Family business; Business history; Mexican economic history; Generational change; Palabras clave: Empresa familiar; Historia Management. empresarial; Historia económica mexicana; Relevo generacional; Administración. Moreno-Lázaro . Perspectiva Histórica de la Empresa Familiar Mexicana INTRODUCTION The formation of the large company constitutes, in all probability, the greatest institutional change experienced by the Mexican economy since the democratisation process that began at the start of Ernesto Zedillo’s term of office in 1994. Furthermore, Mexico’s position as an emerging economy at the beginning of the 21 st century, its entry to the G-20 and the value attributed to its enormous potential for growth has much to do with the explosion of its incredibly powerful businesses into the global market. Any consideration of Mexican business success inevitably evokes the name Carlos Slim, one of the richest men in the world. However, within Mexico, his business, Grupo Carso, has to contend with the equally accredited Bimbo , FEMSA, Cemex or Modelo in the bid for global recognition [1-7]. In such circumstances, albeit relatively atypical, in which the bulk of large businesses are family-run, meeting the characterisations and assumptions of such institutions by the scientific community; namely, those in which one or more families are principal owners who assume responsibility for management and leadership among other objectives, in order to maintain control of the business in the next generation, as, in the Mexican case explains Ginebra [8]. Of course, historiography has not overlooked this occurrence [9-12]. Be it either to highlight the growing power accumulated by a number of families who, in theory, manage the country’s economic and financial influence or to extol the virtues of business modernisation, with the goal of putting a stop to the paradigm of Mexican corporate negligence; in recent years, studies have surfaced with these firms as their protagonists [13]. Moreover, throughout the second half of the 20 th and beginning of the 21 st century, an own brand model of a large business has sprung up in Mexico, one characterised by high vertical integration and a strong family component, despite the cyclical oscillations the Mexican economy has experienced in this period. In this paper, I argue that the key to explaining this phenomenon lies in state support and the management virtues of family-run businesses that knew how to combine patriarchal management with innovative guidelines from the United States, in addition to the careful education and training of executive directors. In order to demonstrate this assertion, I have availed of the solid documentary base provided by Mexican statistics, which are particularly generous in this case. I have used the rankings of large companies produced regularly since 1960, completed using the most recent company summaries, exceptional in their quality in Latin America [14]. While I have availed of a solid quantitative foundation that has allowed me to produce unprecedented indicators of the economic-financial situation of the Mexican business, as seen in the long term, and to compare them with those obtained for the rest of Latin America. This paper is structured in four parts. In the first and third, I will offer a panoramic view of the Mexican business in two chronological periods: 1960 and 2007. In the second part, I will outline the current evolution of large Mexican firms in this time period and, finally, I will focus on the study of the explanatory keys mentioned of the singular role that the family has had in the corporate modernisation of Mexico. In subsequent sections, I will try to offer to those scholars unfamiliar with the world of Mexican business and finance, an explanation that, integrating political conditions and employing quantitative indicators as simple as they are unprecedented, illustrates the causes of what can only be described as “the Mexican family business miracle”. Revista de Estudios Empresariales 2020; 1(4): 219-241. 220 Moreno-Lázaro . Perspectiva Histórica de la Empresa Familiar Mexicana 1. THE MEXICAN FAMILY BUSINESS IN 1960 At the beginning of the 1960s, Mexico was enjoying the sweet economic miracle of stabilising growth under the presidency of Adolfo López Mateos, a native of Veracruz state. Four decades since the end of the Revolution, the executive continued the task of strengthening the state, creating a welfare system with the organisation Instituto de la Seguridad Social y Servicios Sociales de los Trabajadores del Estado [State’s Employees’ Social Security and Social Services Institute], the implementation of social housing programmes, among other measures) and in the vindication of national self-sufficiency and its capability as primary ingredients in the genuine policy of the Partido Revolucionario Institucional [Institutional Revolutionary Party] (PRI) in power [15]. However, this nationalist discourse had little to do with the corporate reality, given that practically half of large Mexican firms were foreign-owned [16] (Tables 1, 2 and 3). In Mexico, 1 in 3 large corporations was in the hands of American investors, a reality not entirely in keeping with the ideology of the political classes in power and of course, with the goals of the aforementioned revolution. With the beginning of the golden age of capitalism, at the end of the Second World War and the normalisation of diplomatic relations with the United States, which had deteriorated severely since the revolution (especially since 1923), the nationalist government message, on its business level, was reduced to pure rhetoric. Mexican heads of state had realised that economic progress and their continued positions of power implied allowing the influx of capital from their northern neighbour, however camouflaged by autarkic exordiums. Table 1. Ownership of the 200 largest Mexican companies in 1960. Ownership Number Porcentage Sales (*) Percentage Mexico 104 52.0 20620 57.9 USA 60 30.0 8413 23.6 United Kingdom 6 3.0 584 1.6 Switzerland 1 0.5 190 0.5 Mixed Mexico-USA 19 9.5 3454 9.7 Mixed Mexico-EEC (**) 10 5.0 2345 6.5 TOTAL 200 100.0 35606 100.0 (*): In millions of pesos; (**): Members of the European Economic Community in 1960. Source: Ceceña [13]. The PRI Governments had entrusted exploitation of the country’s mineral resources and large iron and steel plants to large firms in the United States. With the financial help of the Mexican bank, they had created the automobile market, in a period of increasing demand due to GDP growth per capita, a reduction in petrol prices and an increase in urbanisation. American firms also took over tobacco companies funded by Spanish investors at the beginning of the revolution. They also controlled department stores, large beneficiaries of emerging urban areas and the consumption that brought with it growth without development. In summary, they controlled the strategic sectors of the country’s economy. Nevertheless, the state was the country’s largest employer, due to a growth policy that aimed to substitute imports undertaken by the government using public funds [17]. This was particularly true following the nationalisation of electrical companies, which resulted in the incorporation of the state public sector of petroleum companies, begun in 1937 by Lázaro Cárdenas; However, in reality, state presence was limited to energy production. Revista de Estudios Empresariales 2020; 1(4): 219-241. 221 Moreno-Lázaro . Perspectiva