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JOSEP TÀPIES ELENA SAN ROMÁN ÁGUEDA GIL LÓPEZ

100 FAMILIES THAT CHANGED THE WORLD

Family Businesses and Industrialization

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challenges they have been faced with. Family businesses are usua- lly managed with a long-term vision, and there can be no doubt that the companies featured in this book provide a clear example of how to achieve this.”

José María Serra, chairman of Grupo Catalana Occidente

“This book is an effective tool for better understanding the manage- rial and industrial development of family businesses. This is undoub- tedly an objective approach that allows the reader to learn about the key factors that, in each case, have been fundamental to the suc- cess of centenarian companies. Moreover, it is a work of study and analysis that reveals the best practices of each company in an effort to keep its activity going throughout the years.”

Tomás Osborne, chairman of the Osborne Group

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Family Businesses and Industrialization

All rights reserved. Total or partial reproduction of this work by any means or process, including photocopying and computer processing, and distribution of copies released by rental or public lending is strictly prohibited without written permission from the copyright holders, under penalty of law.

The research project behind this book and its publication were sponsored by the Jesús Serra Foundation (Grupo Catalana Occidente), helping to fulfill its objective of supporting study and research in the field of family business in Spain.

Jesús Serra Foundation Avda. Alcalde Barnils, 63

08174 Sant Cugat del Vallès (Barcelona) www.fundacionjesusserra.org

Design: h2ò comunicació integral Printing: Xerox España S.A.U.

 Josep Tàpies, Elena San Román, Águeda Gil

First edition: May 2014

© Josep Tàpies, Elena San Román, Águeda Gil, 2014

© Jesús Serra Foundation

© Ediciones Universidad de Navarra, S.A. (EUNSA)

Campus Universitario · Universidad de Navarra · 31009 Pamplona · España +34 948 25 68 50 · www.eunsa.es · eunsa@eunsa.es

English translation: February 2016

© Josep Tàpies, Elena San Román, Águeda Gil, 2016

© Jesús Serra Foundation

ISBN (ebook): 978-84-313-5514-2 ISBN (papel): 978-84-608-5437-1

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Contents

Acknowledgments 9 Introduction 11

Objectives and Structure of the Book . . . 12

When Europe Was Bigger Than Asia . . . 12

Researching Success . . . 15

Beyond the Buddenbrooks Effect . . . 17

Rethinking Industrialization From the Standpoint of the Family Business. . . 19

Businesses by Country Germany Villeroy & Boch. 1748. . . 25

Warsteiner Gruppe (Haus Cramer Holding KG). 1753 . . . 29

Haniel. 1756 . . . 33

Faber-Castell. 1761 . . . 37

Rothschild Group. 1798 . . . 41

Bertelsmann. 1835 . . . 45

Tengelmann Group. 1867. . . 51

Fiege Group. 1873 . . . 55

Schaeffler Technologies. 1883 . . . 59

Boehringer Ingelheim. 1885 . . . 63

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Robert Bosch. 1886 . . . 67

Oetker Gruppe. 1891 . . . 73

Miele. 1899 . . . 77

HELM. 1900. . . 81

Brose Company. 1908 . . . 85

Austria Riedel. 1756. . . 91

Bene. 1790 . . . 97

Ottakringer Brauerei. 1837 . . . 101

Swarovski. 1895. . . 105

Belgium D’Ieteren. 1805 . . . 111

Bekaert. 1880 . . . 115

Denmark Maersk Gruppen. 1904 . . . 121

Spain Miquel y Costas & Miquel (MCM). 1725 . . . 127

Osborne Group. 1772 . . . 131

La Farga Group. 1808 . . . 135

Roca Corporación Empresarial. 1830 . . . 139

Grupo Ybarra Alimentación. 1842 . . . 143

Editorial Espasa. 1860 . . . 149

Grupo Catalana Occidente. 1864 . . . 155

Hijos de Juan de Garay. 1864 . . . 161

Miguel Torres. 1870 . . . 165

Grupo Iberostar. Familia Fluxà. 1877 . . . 169

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Sedatex. 1886 . . . 181

Mahou. 1890. . . 185

García Carrión. 1890 . . . 191

Comsa Emte. 1891. . . 195

Perfumería Gal. 1898 . . . 199

Fomento de Construcciones y Contratas (FCC). 1900 . . . 205

United States Olde Nourse Farm. 1722 . . . 211

Imperial Sugar. 1843 . . . 215

The New York Times Company. 1851 . . . 219

Levi Strauss & Co. 1853 . . . 223

Cargill. 1865 . . . 227

Campbell Soup Company. 1869 . . . 231

Follett Corporation. 1873 . . . 237

Gilbane. 1873 . . . 241

SC Johnson & Son. 1886 . . . 245

Bechtel Corporation. 1898 . . . 249

Cox Enterprises. 1898 . . . 255

Day & Zimmermann. 1901 . . . 259

Ford Motor. 1903 . . . 263

Paccar. 1905 . . . 269

Mars. 1911 . . . 273

Finland KONE. 1908. . . 279

France Wendel. 1704 . . . 285

Champagne Taittinger. 1734 . . . 289

Banque Jean-Philippe Hottinguer & Cie. 1786. . . 293 Contents

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Viellard Migeon. 1796 . . . 297

Peugeot Group. 1810. . . 301

Bolloré. 1822 . . . 305

Hachette Livre. 1826 . . . 309

Hermès. 1837 . . . 315

Groupe Louis Dreyfus. 1851 . . . 319

Groupe Bel. 1865. . . 323

Michelin. 1889. . . 327

L’Oréal. 1909 . . . 333

Netherlands C&A. 1841. . . 339

Heineken. 1864 . . . 343

SHV. 1896 . . . 347

Italy Amarelli Fabbrica di Liquirizia. 1731 . . . 353

Fratelli Piacenza. 1733 . . . 357

Fonderia Campane Daciano Colbachini e Figli. 1745 . . . 361

Giobatta & Piero Garbellotto. 1775. . . 365

Falck Group. 1833 . . . 369

Italcementi. 1864 . . . 373

Barilla Group. 1877 . . . 377

Bulgari. 1884 . . . 381

Luigi Lavazza. 1895 . . . 385

Fiat. 1899 . . . 389

Arnoldo Mondadori Editore. 1907 . . . 395

Portugal Espírito Santo Financial Group. 1869 . . . 403

Amorim Group. 1870 . . . 407

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Contents

United Kingdom

Hainsworth Cloth. 1783 . . . 413

Boodles. 1798 . . . 417

Bibby Line Group. 1807 . . . 421

James Purdey and Sons. 1814. . . 425

Swire Group. 1816. . . 429

Schroders. 1818 . . . 433

C & J Clark. 1825. . . 437

Willmott Dixon. 1852 . . . 441

J Sainsbury. 1869 . . . 445

George Bateman and Son. 1874. . . 449

HJ Sock Group. 1882 . . . 453

Daily Mail and General Trust. 1896 . . . 457

Sweden Bonnier. 1804 . . . 463

Switzerland Lombard Odier & Cie. 1796 . . . 471

Le Petit-Fils de L.-U. Chopard & Cie. 1860. . . 475

Victorinox. 1884 . . . 479

Roche. 1896 . . . 483 Epilogue: A Brief Reflection 487

References Cited 499

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Acknowledgments

The adventure of writing a book, no matter how modest, leads to the accu- mulation of debts of gratitude. We would first like to thank Professor Salvador Rus. His interest in family businesses prompted him to create an initial collec- tion of long-standing family companies, which then became the seed this book stemmed from. Our thanks also go to Mónica Pérez Jiménez and Teresa Mateo, whose efficient and diligent collaboration helped ripen these pages.

In addition to the abovementioned, we have had the opportunity to discuss the development and unfolding of the present pages with members of the academic world, whose suggestions have enriched the cases used in this book. Among them, Mary Rose and Sarah Jack of Lancaster University and Paloma Fernández of the University of Barcelona stand out for their generos- ity and patience. And for their ever-present and unconditional support, we dedicate, as always, the fruits of our labor to our families.

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Introduction

This book aims to contribute to research on family businesses and European industrialization. We believe that through the study and analysis of the his- torical development of family businesses we can better understand the phe- nomenon of industrialization. We hope to introduce a work method that will allow for effective collaboration between economic historians and manage- ment scholars. Hence, we have briefly compiled a history of 100 long-stand- ing European and U.S. companies. Their stories help us explore the centuries in which Europe led the international economy. Watching the trajectory of said businesses as a whole will not only help us deepen our knowledge of industrialization, but also gain insight into the role family businesses have played in such a complex process and how they have been able to adapt under continuous change. All the companies studied in this book are currently active, which refutes the notion that family businesses are a thing of the past.

Additionally, in most cases they are sizeable enough to set them apart from a pattern limited to only the first wave of industrialization. The time frame chosen when selecting businesses was restricted to currently active companies founded between the 18th century and 1913. The 1913 cutoff ensures a minimum life span of 100 years.

The list of featured companies is by no means exhaustive. As the adage states, however, a journey of a thousand miles begins with a single step.

We therefore provide the proverbial first step and take a look at European industrialization from a family business point of view. The aim is to gain a better understanding of both realities and how they interact, as well as to grasp the transformation many family businesses have undergone to adapt to changes brought forth by industrialization.

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Objectives and Structure of the Book

This book gathers together the stories of 100 companies organized by country and, within each section, by seniority.1

The epilogue outlines some of the reflections that arise from reading these stories as suggested in this introduction. The actual novelty is, however, that what the reader will find in these pages are the very lessons on how said 100 companies managed to survive for more than a century.

We hope that many of these “lessons from history” are applicable to our readers’ businesses in the present day.

Students at business schools are considered to be a key component of their own individual training process, which is developed through discus- sion via the case method. Likewise, we have considered our readers to be a key component in the learning opportunities offered by these 100 stories.

While in most books written by academics the authors offer their conclu- sions systematically and defend them with examples, our aim is, rather, the opposite: to present the 100 company histories, brimming with wisdom on their own, and allow readers to draw their own conclusions.

When Europe Was Bigger Than Asia

With the discovery of America, Europe experienced an upward swing in the international economy that was inversely proportional to the downward trajectory of Asia. At the end of the 18th century, a decisive event spurred on that growth trajectory: industrialization. Coming up with a definition that encompasses all aspects of such a complex phenomenon is not an easy task. It could be understood as a process of gradual and irreversible change accompanied by a significant and sustained acceleration of economic

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Introduction

growth and profound changes in technology, the economic structure and institutions. The economy, which was agriculturally based until that point, changed its composition: the secondary sector took on a predominant role and the tertiary sector rose, while the primary sector reduced its contribu- tion in relation to global production.

Technical innovation played a significant role in this monumental trans- formation of the Western world. The change, however, spread far beyond new technology alone: society and the institutions that comprise it underwent radical change as well (Comín, 2011: p. 253). Production of manufactured goods − which until then was compatible, in many cases, with labor in the fields and was intended for nearby markets − became specialized and was relocated to the urban domain. And thus came the emergence of factories and workers. It changed the lives of many people, their customs, their habits and how they understood the world. Markets got bigger and, with the creation of new institutions, the birth of a new era was shaped.

Chart 1: Estimate of continents’ contribution to world GDP (in percentages).

70.0

Europe Asia

North America Latin America Africa Oceania 60.0

50.0 40.0 30.0 20.0 10.0 0.0

1500 1600 1700 1820 1870 1900 1913 1950 1974 1989 2001

Notes and source: Based on data compiled from Maddison (2006).

Introduction

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Table 1: Estimates of continents’ share of world population and GDP (in percentages).

Europe Asia North

America Latin

America Africa Oceania

GDP P* GDP P* GDP P* GDP P* GDP P* GDP P*

1500 24.0 20.7 64.9 63.6 1600 26.2 20.6 65.3 67.3

1700 29.6 21.7 61.6 65.7 0.2 0.2

1820 32.6 22.1 58.9 67.7 1.9 1.0 2.1 2.1 4.4 7.1 0.0 0.0

1870 45.5 26.2 38.0 59.9 9.3 3.4 2.5 3.2 4.0 7.1 0.6 0.2

1900 47.5 27.5 28.1 56.0 16.5 5.2 3.6 4.1 3.3 7.0 0.9 0.3 1913 46.7 27.9 24.9 54.4 20.1 5.9 4.4 4.5 2.9 6.9 1.1 0.3 1950 39.2 22.7 18.5 54.7 29.2 6.6 7.8 6.6 3.8 9.1 1.5 0.4 1974 38.5 18.1 24.1 57.5 23.5 5.9 9.0 7.9 3.6 10.1 1.3 0.4 1989 32.8 15.2 30.8 58.9 23.4 5.3 8.4 8.4 3.4 11.9 1.3 0.4 2001 25.9 13.1 37.9 59.4 23.3 5.1 8.3 8.6 3.3 13.4 1.3 0.4

Notes and source: P* = population; based on data compiled from Maddison (2006).

One hundred years after this powerful phenomenon began, Europe caught up with Asia. According to the estimates of Angus Maddison (2006), in 1870 Europe contributed 45.5% to the global GDP, compared with the 38% supplied by Asia. It was seven percentage points ahead for the first time since records are available or can be extrapolated. Industrialization propelled a continent representing around 7% of the Earth’s surface and less than one-third of the global population to the point of beating gigantic Asia, with an extension close to a third of the globe and almost two-thirds of the world’s population.

It is thus worth asking the interesting and much-debated question of why industrialization was a European phenomenon. Among the numerous expla- nations available, an extraordinarily thought-provoking one is that of Vera Zamagni (2011), who, much like Pomeranz (2001) and Findlay and O’Rourke (2007), points out that it was in Europe where civilization had cultivated the highest degree of individual freedoms in the centuries prior to the great change. The decisive role of geopolitical variables, Christianity as a key socio- cultural element, and essential Western institutions would thus explain what natural resources and the internal market could not justify on their own.

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Introduction

Industrialization began in one of the smallest and most geographically removed regions of Europe, Great Britain, thereby demonstrating that it was a process nourished not just by climate or material resources; Great Britain’s leading role cannot be explained by a relative abundance of mineral coal and water alone. As stated by Mokyr (1993), this was a complex, multifactor process brought about by the interaction of many elements rather than a few independent causes. Amongst said factors, institutions were obviously key.

The United Kingdom was apparently the country that most quickly gathered together the largest number of institutional factors capable of driving the change: property rights supported by a stable legal system, a functioning financial system, the existence of insurance, a stock market, etc.

This magnificent structural change in the economy spread far and wide from British soil towards the rest of Europe and, eventually, to the United States. Following Great Britain’s example, small countries such as Belgium, and nations with no noteworthy supply of natural resources such as Switzerland, also followed suit. Big countries, including France and Germany, became industrialized and the ripple effect reached, albeit somewhat lessened, other countries on the periphery, such as Italy and Spain. Japan, the first Asian country to undergo industrialization, did not experience this phe- nomenon until the end of the 19th century. The rest of the continent would still have to wait to turn the tables on global scale manufacturing – Asia would not regain its economic primacy until much later.

Researching Success

Considering what has been exposed so far, it is easy to understand why Europeans fixate on industrialization. It was one of the brightest ages in the economic history of Europe and one of the most studied. Research on it has been addressed within a vast array of fields. Historians have pondered its causes, its determining factors and its political, economic and social effects.

Industrialization has been analyzed from both a sectorial viewpoint – par- ticularly focused on the activities that underwent bigger transformations

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– and a regional one – including the many specific cases of countries that went through such a complex process. The chronological framework estab- lished on top of said research allows us – from our current 21st century perspective – to break the process down into three industrializing waves.

The first wave, at the end of the 18th century, was led by Great Britain and linked to a number of factors, namely: coal as its new energy source, the steam engine as its flagship technology, the textile, iron and steel sectors as its key industries, as well as many other new business initiatives. These new businesses were small and medium-sized and mainly family-run, where ownership and management converged in the same person or family.

The second industrializing wave, at the end of the 19th century, occurred at the same time as the accelerated growth in Germany and the United States and the beginning of the Japanese boom. From a technologi- cal point of view, three new aspects transformed the industrial scene:

(i) electricity ended industries’ dependence on coal and freed it from having to be located near a mine or port for better access; (ii) the internal combus- tion engine opened the doors to a true revolution, with the emergence of cars and planes and the automation of numerous processes; and (iii) the development of modern chemistry gave rise to the discovery of a myriad of new materials and products, including artificial fertilizers and the first plastics. Regarding businesses, this second wave brought with it the appear- ance of what Alfred Chandler (1990) defined as the modern industrial cor- poration, linked to the new capital-intensive sectors. Its large size allowed it to benefit from economies of scale and, in contrast with the owner- manager of the first wave, it had professional and salaried management.

Lastly, the third wave of industrialization was led by the information and communications technology revolution on the threshold of the 21st century. This last wave has changed the service sector radically by giving it a once unknown influence on the economy, and it has enabled the offshor- ing of many industries and activities in search of cheap labor. This change of paradigm is exactly what allowed Asia to close the chapter that began in the 18th century and reclaim its relevance in global GDP generation: in 2001 it almost reached 40% of the total, matching its 1870 levels. Its pop-

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Introduction

was facing a falling trajectory: compared with 1870 its contribution to global GDP decreased by 20% and its population ratio by 13%.

The three waves of industrialization can be understood as a process of disruptive innovation with the meaning that Christensen (1997) applied to this term to distinguish it from evolutionary or incremental innovation. The latter is the natural response to the entry of new competitors in a market characterized by a progressive improvement in product value. Logically, this gradual change was present throughout the centuries of the Industrial Revolution. Such gradual innovation tends to carry with it an increase in cost and a progressive decline in the customer’s perception of increased value. However, disruptive innovation creates new needs, markets, products and services. And, as Christensen points out, disruptive innovation requires radical changes that go even beyond the customer’s needs. Said disruption is what prompts the idea of industrialization as a series of waves.

Industrialization was a long-term innovation process: not only evolu- tionary and incremental – as value was gradually added onto products or services – but also disruptive – as new products and markets were created.

For example, in the first wave, steam enabled the birth of the rail industry and, in the second, the mass production of vehicles triggered a similar phe- nomenon. As Henry Ford maintained, if he had asked his customers what they needed, they would have asked for faster horses.

Beyond the Buddenbrooks Effect

As we have mentioned above, one of the critical elements of industrialization was the transformation of the company. In the long preindustrial stage and during the first wave of industrialization, the vast majority of businesses were family businesses and it was not until the end of the 19th century that the modern industrial corporation (Chandler, 1990) appeared. The rise of such large industrial companies spread the misbelief that family businesses were a thing of the past: the legacy of a labor-intensive economy, sparsely – and backwardly – communicated and bound to regional markets (Colli, 2003:

p. 65). It seemed that its continuation was linked to flawed markets with

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underdeveloped information systems and unstable legal structures, which made the protection of property rights difficult.

This was the most prevalent vision of the family business in academia up until the 1970s. Clichés reinforcing negative perception were thrust upon this type of organization: its efficiency and profitability – as opposed to non- family businesses – were questioned and its capacity to operate in capital- intensive sectors was doubted. It also became identified with conservative attitudes involving short-sightedness, such as risk aversion and reluctance to innovate. Finally, it was considered incapable of enduring over time, citing the famous Buddenbrooks effect – manifested in family lines – which was outstandingly described by Thomas Mann. The argument was even taken to the extreme with the claim that it was unable to sustain the evolution of an industrial economy over time (Colli, 2003: pp. 10–13).

Nevertheless, reality is stubborn and, starting in the early 1980s, a series of events changed the perception of family businesses (Colli, 2003: p. 23).

The restructuring process undertaken by many large corporations, the crisis and decline of public companies, especially European ones, and the unques- tionable success of some economic models based on family businesses – such as the Japanese model – pushed for a reconsideration of family business theory.

Intense empirical study carried out in several countries has led to a defini- tive shift in the lines of interpretation: family businesses certainly played a leading role during preindustrial history and the first industrializing wave. A new, non-family based, company type emerged afterwards and was linked with growth from the end of the 19th century. None of these assumptions necessarily imply, however, that family businesses are obsolete organizations or a stage to overcome on the road to economic growth.

Numerous case studies have refuted one by one the arguments employed against family businesses. As far as this type of business is concerned, there are modern and efficient companies (Hanna, 1980: p. 52) while some others are huge and specialized in capital-intensive sectors (Gourvish, 1988: p. 34; Cassis, 1997: p. 131; Rose, 1995: pp. vix and xxi).

Some are dynamic and innovative (San Román et al., 2013); others are

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Introduction

historical changes (Tàpies, 2009) and yet some more are still full of power while based in countries with fully completed industrialization processes and efficient markets. Fernández Pérez and Colli’s (2013) excellent, recently published work is a good example of this. Their book compiles a collection of papers written by family business experts. They not only shed light on the dynamics that allowed said businesses to adapt to changing historical conditions but also highlight how professionalizing management was key to making such adjustments. At the dawn of the 19th century the afore- mentioned changes gave birth to a new type of family business, since increased professionalization affected both family members themselves as well as the management employed. Nevertheless, family control of the business and the transmission of values that enabled the companies’

creation, rise and endurance were never relinquished.

The survival of the family business – especially in Europe – as an institu- tion that has gone well beyond a specific phase of industrialization forces us to reflect more deeply and provides plenty of scope for research (Rose, 1995: pp. xiii–xiv). In the words of Colli (2003: p. 21), “this institution maintains a considerable role and relevance in modern advanced economies”

– at least enough for us to take another look at its connection with the phenomenon of industrial change.

Rethinking Industrialization From the Standpoint of the Family Business

To tackle the task proposed at the start of these pages, in choosing the 100 family businesses we have sought to maintain a balance between countries and select businesses belonging to sectors that serve us in our aim of illustrating the phenomenon of industrialization. We have therefore searched for examples of food, textile and iron and steel companies that help us consider industrialization as a gradual process that allowed humans to modernize their basic needs: eating, wearing clothes and improving their work tools. We have devoted special attention to companies involved in

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traditional agricultural activities that were able to evolve from a preindus- trial way of operating.

As we advanced chronologically in our small research project, we began to explore family businesses that would reflect the technological change introduced by the second wave of industrialization: chemical, electrical, construction and automobile-related businesses, among others. The fact that all of the stories come to an end in the present day has allowed us to observe how family businesses have adapted to the third wave of industri- alization, with global markets and highly competitive environments.

However, the reality of business is alive and ever-changing and, as shown in these pages, family businesses are no exception.

For example, at the start of 2014 Peugeot was a family business but, while this book was being edited, it underwent changes in its shareholder structure that have turned the Peugeot family into a minority shareholder (the related chapter gets into some more detail). It cannot be ruled out, then, that a similar change might arise for any of the companies collected in the book after publication.

As far as balance amongst countries is concerned, the United Kingdom, the United States and Germany have greater specific weight for obvious reasons. We have, however, included a range of companies wide enough to cover Europe from north to south. Hence, companies from Finland, Sweden, Denmark, France, Switzerland, Italy, Portugal and, of course, Spain are also featured. The inclusion of the United States in a primarily European- centric study is explained by two reasons. Firstly, because the United States unmistakably belongs to the Anglo-Saxon sphere of influence. Secondly, because its presence highlights the fact that, despite the enormous influence of big corporations in American industrial history – as emphasized by Chandler – family businesses also played a vital role in its industrialization.

It is no mere coincidence that Walmart, ranked as the top business by revenue in the United States in 2013, is a family business.

In our desire to uphold this regional balance, we have been consciously inconsistent only once and in a way we believe is excusable: we have given Spain a far greater role than its industrial achievements prior to World War

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Introduction

firstly, we could not miss the opportunity to raise awareness of our own history – and, therefore, what we know best – particularly since it is not as well known abroad. Secondly, we intended to highlight the influence of family businesses in Spanish industrialization. Additionally, the role of the large company has attracted considerable attention on the part of research- ers in Spain. For instance, the work of Carreras and Tafunell (1993) did a great job in tracing back the structures of big companies in Spain. Following the steps of Chandler, in-depth studies have also been carried out, such as the one exploring the relationship between the electricity sector and the big banks forged at the turn of the 20th century (Aubanell, Anes and Bartolomé must be cited here). However, large companies in Spain never reached the size of those in other countries and, in most cases, they were linked to family groups. Evidence of the influence of business families has resulted in many interesting case studies often linked to specific activities.

In this sense, in Spain, some surnames are frequently associated with certain activities: Aznar with the shipping business, Entrecanales with construction, Luca de Tena with information, Puig with the perfume industry and Mahou, Raventós and Osborne with the agrifood sector, to name a few. This is not only a book of individual cases, although it gathers many. What we hope to achieve by placing them side by side is to inspire reflection on the role that this large group of family businesses has played in industrialization.

It is important to point out that, in dealing with the family business from a transnational perspective, we do not mean to imply that the phe- nomenon is comparable across all sectors or European countries or that its characteristics are even remotely similar. If the abundant research of the past decades has made anything clear, it is that family businesses differ extensively according to geography and history (Colli and Rose, 1994:

p. 24). And they do so to such an extent that it is difficult to find a generally applicable definition of this phenomenon (Colli, 1996: pp. 110–111). As stated by Rose, in order to understand the nature of the family business one needs to turn to its essence. One can then use common sense to apply said essence to varying legal or institutional contexts (Rose, 1994: p. 62).

That is why, instead of defining what a family business is, we would rather point out the three elements that, when appearing together, prove its

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existence: kin (defined according to the specific country where it is studied), property (understood as the ownership of a significant fraction of the capital of a business) and control (authority over the strategic management of a company) (Colli, 2003: p. 20).

Nonetheless, the existence of sometimes huge differences among family businesses in very different countries does not imply, in our opinion, that the phenomenon cannot be understood as a whole. The nature of such an endeavor is, to us, enriching enough to take on the risk of comparing very different realities. Moreover, while family businesses vary from place to place, their importance in terms of presence and numbers is overwhelming in most European countries (Colli, 2003: p. 15). And this is a stubbornly persistent and common trait in the history of European industrialization.

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Businesses by Country

Germany

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Villeroy & Boch. 1748

The origins of the company date back to 1748 when, in the village of Audun-le-Tiche – on the border between France and Luxembourg and not far from Belgium and Germany – the blacksmith François Boch, until then a manufacturer of arms, decided to launch a new business together with his three sons and began manufacturing ceramics. Given the privileged geographical location of Audun-le-Tiche, he had soon secured a significant export market. Only 18 years later, his son, Pierre-Joseph, obtained permis- sion from Empress Maria Theresa of Austria to set up a factory in the Dukedom of Luxembourg. Creations from that factory were awarded the special distinction of “Manufacture Impériale et Royale.”

The family’s third generation was headed by Jean-François Boch, the founder’s grandson. After receiving his education at the École de Sciences in Paris he introduced innovations in the materials the company used – in particular a new type of earthenware similar to porcelain but more robust and less expensive, which earned him a gold medal in 1822 at the King of Prussia Trade Show in addition to other national and international awards.

Jean-François acquired a Benedictine abbey in Mettlach, located on the banks of the Saar River and which today serves as Villeroy & Boch’s corporate headquarters. He established a tableware factory there, for which he personally designed part of the machinery, which led to a remarkable process of industrial modernization. The achievements of the family’s initial generations were not limited to the industrial sphere; in 1812 they also founded the Antonius Guild, a social institution for insuring workers through a pension fund maintained by the company and its employees. The creation of the fund represented an important social

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advance and served as a model for the social security systems imple- mented by Bismarck 70 years later.

The history of the Villeroy family began in parallel to that of the Bochs.

In 1791 Nicolas Villeroy and two partners purchased an earthenware factory in Vaudrevange (today Wallerfangen), in Saar, less than 100 kilometers from Audun-le-Tiche. Six years later the entrepreneur had become the sole owner of the business. His innovative spirit led him to implement many advances in production; the Vaudrevange factory, for example, was one of the first to use coal for fuel. He also conducted numerous experiments with glazes, providing significant cost savings.

In 1836 a merger took place between the Villeroy and Boch family companies as a strategy for achieving economies of scale and tackling the strong competition from the British market. The success of the operation fueled a vigorous international expansion during the 1840s and 1850s, linked to the advance of the railroads. The market expanded from France and Great Britain to Russia, Southern Europe, Turkey and the United States.

This growth was accompanied by diversification in the business; in 1843 glassware was added to tableware, followed by ceramic tiles in 1852, sanitary ceramics beginning in 1870 and the production of artistic terra- cotta from 1879.

Scientific discoveries at the end of the 19th century and the start of the 20th century prompted the development of a greater culture of hygiene and the widespread use of sanitary products. Villeroy & Boch began the large-scale production of these products, particularly bathtubs and toilets, making them accessible to the middle class.

After World War I, as a result of the division of the Saar region between France and Germany, new factories had to be bought in Bonn, Torgau and Breslau. During the 1920s and 1930s the company modernized its products and designs, creating new tendencies and incorporating renowned artists.

World War  II signified a turning point for the company. Many of its factories suffered serious damage and others were expropriated. Recovery was slow. In 1959 the Septfontaines plant (Luxembourg) began producing vitreous porcelain. In 1971 large-scale exports to Japan were launched for

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Villeroy & Boch. 1748

more global concept with greater technical requirements. In 1976 Villeroy

& Boch acquired a traditional porcelain factory in Selb, giving the company an entrance into new markets.

In 1982 the company underwent a restructuring process, centralizing functions to gain in flexibility and competitiveness. Villeroy & Boch was divided into three divisions: tiles, sanitaryware and tableware/crystal. Major marketing campaigns were made a priority, such as the one carried out by the prestigious photographer Helmut Newton; new concepts were intro- duced, such as Mix & Match, which encouraged personalization by combining different tableware collections; and new collaborations were developed with artists such as Paloma Picasso.

In 1987 Villeroy & Boch became a public limited company. Its name was changed to Villeroy & Boch AG and its capital remained in the hands of the two families. Three years later, the company began trading on the stock market to facilitate its access to capital markets. During the 1980s and 1990s the company reinforced its position in the market with the purchase of several factories; it became a leader in the hotel tableware and sanitary- ware industries.

Coinciding with the end of the 20th century and the 250th year anni- versary of the founding of the company, Wendelin von Boch, a member of the family’s eighth generation, was named chairman of the Board of Directors. He remained in the position until 2007, when he took over as chairman of the Supervisory Board. Under his management, the company began a new era characterized by thorough modernization and a new approach; the company’s marketing efforts were now directed at popular- izing a lifestyle, beyond the manufacture of simple ceramic items. To this end, production capacity was increased and flexibility was promoted, without neglecting the firm’s adaptation to globalization. In the early years of the 21st century, the company’s infrastructure was enhanced, combining capital-intensive plants in the center of Europe and labor-intensive plants in Eastern European countries. The company broadened the internationaliza- tion process to Latin America and Asia; in 2004 it launched a line of bath and wellness products in Shanghai to take advantage of the potential of the Chinese market; in 2006 it purchased three sanitaryware companies in

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an effort to focus on the most profitable business area: the manufacture of this type of products. In 2008 the company also acquired Nahm Sanitaryware Co, Ltd. in Bangkok.

Currently, the company is present in 125 countries through three divisions:

bath and wellness, tableware, and tiles. It has 15 production facilities throughout Europe, Mexico and Thailand and a workforce of nearly 7,500 employees. The family, represented by Nicolas Luc Villeroy, has a presence on the company’s Board of Directors, currently chaired by Frank Göring.

Wendelin von Boch continues at the head of the Supervisory Board. In 2012 Villeroy & Boch’s sales reached €744 million, 60% of which corresponded to the bath and wellness division.

Bibliography

Company website: www.villeroy-boch.com Date accessed: June 1, 2013.

The House of Villeroy & Boch, a Philosophy and Passion: Living and Dining in the Villeroy & Boch Style (1996), Merzig: Villeroy & Boch AG.

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Warsteiner Gruppe (Haus Cramer Holding KG). 1753

The Warsteiner Group was founded in 1753. This was a direct consequence of Antonious Cramer increasing the volume of beer he produced as a side job to his farming business. As stated in the records of the Warstein Town Council (North Rhine-Westphalia), he was required to pay associated taxes and, hence, the business was created.

Fifty years later a fire destroyed the town, forcing Caspar Cramer and his son Johannes Cramer Vito to rebuild their home, to which they added an annex: a small brewery. The new Church of St. Pancrazio was built close by, giving the Cramer’s factory a privileged location right in the heart of the town of Warstein.

At the end of the 19th century the factory was modernized and profes- sionalized by members of the next generation; Albert and August Cramer applied all the technical knowledge they had acquired at the University of Worms to the family business. The technical improvements came with the introduction of the first steam engine, which shot up the production of beer to 3,000 liters annually.

In 1928 the company began to brew Pilsner beer thanks to a discovery made by Albert Cramer: the Kaiserquelle (“Kaiser’s spring”) at the edge of the Arnsberger Forest, just a little over 15 kilometers from the town of Warstein and close to the brewery site. The water from this spring had a unique quality: it was soft water (low in calcium), which allowed for low- fermentation beer production. This was a major discovery since up to that point they had only brewed lager beer, i.e., high fermentation beer using

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very hard water. Warsteiner overtook its competitors by specializing in this type of product.

The following years brought sustained growth for the company.

However, the group’s largest expansion occurred in the second half of the 20th century. In the 1960s Warsteiner managed to position itself as one of the largest breweries in Germany, with production reaching 10,000 hecto- liters. Strong demand for the company’s beer led to an increase in the workforce, which grew to over 50 employees.

In 1976 a new brewery was built on the outskirts of Warstein: the Waldpark Brauerei. This brewery was the object of worldwide admiration as one of the largest and most modern in Europe. The company took advantage of the change in location to implement strict quality standards, which would become the hallmark of the firm. Two years later, it moved the group’s production and logistics services to the new site. At this point in its history Warsteiner’s production exceeded one million hectoliters.

Albert Cramer Junior, a member of the family’s eighth generation, became chairman of the company in 1986. Under his management, Warsteiner entered an intensive growth stage through acquisitions and diversification of the business. During the final years of the 20th century and the beginning of the 21st, the group acquired a number of breweries, such as the Paderborner Brewery in 1990, the König Ludwig Schlossbrauerei Kaltenberg in 2001, the Frankenheim Brewery in 2005 and the Herforder Brewery in 2007. Diversification of the business was achieved through the founding of the hotel chain Welcome Hotels in 1998.

This process was complemented by an important change in the group’s logistics; in 2005 Warsteiner built its own railway access, making it possible for the company to move over 200,000 metric tons of goods by rail instead of by road. The company was thus able to reduce CO2 emissions signifi- cantly and would go on to implement a policy based on growth that is both sustainable and environmentally friendly.

Most recently, the company has also made an effort to modernize its production and make the most of competitive advantages by building its own power plant, as well as a wind power plant, that supplies 40% of the

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Warsteiner Gruppe (Haus Cramer Holding KG). 1753

and development center (Brew Academy for Research and Development) was opened, focusing on the optimization and efficiency of the beer-mak- ing process. That same year, the group made a transoceanic leap by signing an agreement with SAB Miller for expansion into the Argentinian market.

Following the death of Albert Cramer Junior in 2012, the succession process resulted in the position of chairman being held, for the first time, by a woman: Catharina, Cramer’s oldest daughter, took over the reins of the family business.

The family motto – “innovation and investments by tradition” – has been reflected both in the group’s history and its principles. Warsteiner has made a special effort to promote business and social responsibility. They not only aim to preserve beer as a cultural asset and promote education in responsible consumption, but also pursue sustainability as the foundation for their business.

Currently, the Warsteiner Group has an extensive portfolio of beer brands, exported to over 60 countries, and employs more than 2,300 people. The group obtained profits of €530 million in 2012, the same year in which its production reached 4.56 million hectoliters of beer.

Bibliography

Company website: www.warsteiner-gruppe.de Date accessed: August 1, 2013.

“Warsteiner Steps Up Activity in UK,” Wholesale News, April 2012, No. 4, p. 42.

“Warsteiner Winning Over Irish Beer Lovers,” Checkout, June 2010, vol. 36, No. 5, p. 46.

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Haniel. 1756

The origins of the Haniel group can be found in the town of Ruhrort, near Duisburg, North Rhine-Westphalia, a major river port where the Rhur and Rhine Rivers meet. It was there, in 1756, that customs inspector Jan Willem Noot opened a warehouse to provide services to merchants doing business with the Netherlands. His son-in-law, Jacob W. Haniel, and his daughter, Aletta, took advantage of the facilities to trade wine and, later, also iron and steel.

Upon the death of her husband in 1782, Aletta continued the business and was soon joined by her three children. In 1802 two of them, Gerhard and Franz, founded a coal transport company together with their brothers- in-law. Shortly afterward, in 1808, they acquired a mine and became iron smelters. Franz emerged as the undisputed leader and began shifting the focus of the business away from its initial activities, centering instead on the iron production process by means of vertical integration.

In 1839 the company manufactured the first railroad locomotive in the region of Ruhr and, in 1845, the first steam tugboat to be built in Germany.

The company was also a pioneer in the construction of employee housing.

Franz and his wife, Friederike, donated a hospital to Ruhrort on the occasion of their silver wedding anniversary in 1856. Franz died in 1868. With the inheritance, his children founded Franz Haniel & Co., an equity consortium.

At the beginning of the 20th century, the company made an important strategic decision: to separate management from ownership. The business would be run by the professionals deemed most appropriate at any given time. The family’s role would be limited to supervising the company’s strategy through its governing body, the Board of Directors. Since 1917, no family members have worked in the group at the operational level.

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The company continued to expand its range of activities: maritime transport, freight services and chemicals. In 1905 it built a floating wharf in a Chinese port. In 1919 it built one of the largest river shipyards in the world in the German town of Walsum. Starting in 1920, it entered into the field of fertilizers, fuel-oil and peat. In the years preceding the Second World War, as well as during the armed conflict, the group developed a technique for producing gasoline from coal. However, the war tore apart the company’s overseas commercial network and destroyed nearly its entire fleet.

After 1945, the group was affected by the Allies’ decision to dismantle the large German industrial groups; specifically, it was forced to hand over its business in the iron and coal sectors. As a result, the family lost 42% of its holdings in Franz Haniel & Cie., the company it had founded in 1917 to group its investments. Over the years, Haniel recovered some of the assets that had been confiscated after the war.

The first postwar decisions involved rebuilding the fleet and resuming the coal business. In 1950 the company began acting as a broker in the oil and derivatives markets, creating its own network of gas stations, which it sold in 1964.

Seeing the need for reconstruction in the wake of the war, the group entered into the aggregate manufacturing business. Other channels for diversification included acquiring a whole-sale pharmaceutical company and forging partnerships with other business professionals to create the Metro chain stores; as of 2007 Haniel owns a third of the shares. In parallel, the group underwent a restructuring process to create business units with the potential to operate with a high degree of autonomy.

In 1970 another fundamental strategic decision was made: to sell all assets related to coal, iron and steel to become a conglomerate with a presence in highly diverse sectors. In 1980 the group formed a holding company.

Since then, in keeping with this new status, certain investments have been temporary; Haniel bought shares in companies with potential for growth and promoted them. When the companies had reached a sufficient level of development, the shares were sold. This was the case in certain

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Haniel. 1756

sold in 2008, and in the area of fire and water damage restoration with the company Belfor, disposed of in 2006.

In 2013 Haniel had a presence in five business sectors: cleaning (bathrooms and rooms, as well as textiles: CWS-boco), raw materials for the production of stainless steel (ELG), business supplies and equipment (Takkt), retail stores (Metro) and health and pharmacy (Celesio). This last company was the result of the acquisition of pharmaceutical product dis- tributors in Germany from 1962 to 1973 (Gehe, renamed Celesio), in France in 1993, two years later in the United Kingdom and, beginning in 2000, in Austria, Norway and the Czech Republic.

In mid-2013 the group had close to 650 family member shareholders and a total of 56,000 employees in 30 countries around the world. Turnover for the financial year was €26.3 billion.

Bibliography

Company website: www.haniel.de Date accessed: July 15, 2013.

Haniel, F. (2009), A Haniel Chronology. 1756–2008, Duisburg, Germany.

James, Harold (2006), Family Capitalism: Wendels, Haniels, Falcks, and the Continental European Model, Cambridge (MA): Belknap Press of Harvard University Press.

Kellogg School of Management (2005), “Best Practices and New Ideas,”

2005 Kellogg Family Business Conference, pp. 47–49.

Wiesmann, Gerrit, “Haniel Forced Into the Limelight,” Financial Times, December 28, 2009.

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Faber-Castell. 1761

Faber-Castell was founded in 1761 in Stein, Bavaria, a town just seven kilo- meters from Nuremberg and known for its history of pencil making. This was the birthplace of Kaspar Faber (1730–1784), a cabinet maker and a pencil maker in his spare time whose success allowed him to start his own business. When he died, he was succeeded by his son Anton Wilhelm (1758–1819), who took an important step forward with the newly estab- lished company, launching the first transition toward a more industrialized production. The current headquarters of Faber-Castell is located on land bought by Anton Wilhelm on the outskirts of Stein, where a factory was built and named A.W. Faber.

In 1809 a member of the family’s third generation, Georg Leonhard (1788–1839), took charge of the business. He was faced with a difficult political and economic climate, along with competition from English pencils that were of higher quality due to the extraordinary quality of the graphite they used, which came from Cumberland. In spite of the difficulties brought on by this competition, Georg Leonhard could see the decisive role that international expansion would have. He sent his sons, Lothar and Johann, abroad. The innovative ideas they learned there allowed them to not only lay the foundations of subsequent growth, but also leave behind the tradi- tional pencil-making processes that had been used up to that point.

After Georg Leonhard died in 1839, Lothar Faber took over the family business. The handover to the fourth generation began one of the most crucial eras in the company’s history. The founder’s great-grandson set himself the goal of “conquering the market by making the best that can be made anywhere in the world.” To achieve this, Lothar worked hard to modernize,

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expand and diversify the company. Among the strategies he adopted, one of the most noteworthy was the acquisition of exploitation rights for a high- quality graphite mine in Siberia (1856). He also modernized the factory with the construction of new buildings in 1837 that demonstrated a concern for workers’ well-being along with the desire to create a space with the potential to foster good work. Lothar’s concern for his workers also led to the creation of a social security system, which would later include pension plans and other social benefits. He also took the first steps in the marketing area, placing priority on high quality and a carefully designed presentation of the pencils.

He was a trailblazer in embossing the factory name on his products. However, this also gave rise to imitations, which Lothar reported, leading to the enactment of laws to protect property rights. It is not surprising that Faber- Castell is the oldest registered trademark in the United States.

In the middle of the 19th century, the company internationalized and branches were opened in New York, Saint Petersburg, London and Paris, putting to good use the impetus provided by the World Fairs. In 1861 the company set up its first factory abroad. It was located in Brooklyn, New York, and was managed by the youngest brother in the family, Eberhard, to boost business during the Civil War. This factory became an independent firm some time later under the name of Eberhard Faber Company. The product catalog was also enhanced; in 1861 the company began to make school chalkboards and, in 1872, an eraser factory was opened in Newark, New Jersey. A.W. Faber patented its elliptical erasers in 1875.

Lothar’s son, Wilhelm, took over the company but died without leaving any male heirs. The firm was thus inherited by his daughter, Baroness Ottilie von Faber, who married Count Alexander zu Castell-Rüdenhausen in 1898.

The latter joined the family business shortly afterward and went on to manage it until the death of the baroness. The company name then became A.W. Faber-Castell, in keeping with a condition instated by Lothar von Faber that heirs maintain his family name. Under Alexander’s management, the company modernized its image and launched new product lines, such as high-quality pencils and colored pencils.

World War I came as a tough blow to the company and it lost many of

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Faber-Castell. 1761

which were not recovered until 1994. In 1928 Ottilie and Alexander’s son, Count Roland von Faber-Castell, inherited the family business. Under his leadership, a number of companies were taken over – including the Johann Faber pencil factory founded in 1879 by Lothar’s brother, purchased in 1932 – and the international expansion of the business continued into South America and Europe.

The recovery period following World War II was less costly than that of World War I, although some factories were lost. Roland modernized the business with the addition of new products: mechanical pencils (patented in 1948), pens (in 1949) and cosmetic pencils (in 1978). He also paid metic- ulous attention to the presentation of the products, following in the footsteps of his grandfather Lothar, and he created new formats such as children’s pencils, presented in colorful packages.

Anton Wolfgang von Faber-Castell took over in 1978; this was the eighth generation of the family to be in charge of the business. This era saw the opening of new factories and offices abroad, especially in Asia; and the sustainability of the company’s projects became a goal. In 1993 the social and corporate image was redesigned to adapt it to new times, and production was reorganized into different branches. In 2003 Faber-Castell signed the United Nations Global Compact, demonstrating the company’s awareness of social responsibility.

Currently, Faber-Castell is the largest manufacturer of pencils in the world, with a production capacity exceeding two billion pencils annually and nearly 7,000 employees, approximately 13% of whom are in Germany.

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Bibliography

Casillas, José C., moreno, Ana M., and aCedo, Francisco J. (2010),

“Internationalization of Family Businesses: A Theoretical Model Based on International Entrepreneurship Perspective,” Global Management Journal, vol. 2, No. 2, pp. 18–35.

Company website: www.faber-castell.co.uk Date accessed: March 1, 2013.

marsH, Peter (2012), The New Industrial Revolution. Consumers, Globalization and the End of Mass Production, New Haven: Yale University Press.

russell, Jesse, and CoHn, Ronald (2013), Faber-Castell, Bookvika Publishing.

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Rothschild Group. 1798

The Rothschild Group dates back to the 1760s, when Mayer Amschel Rothschild – a wealthy Jewish merchant – set up a business in Frankfurt, Hesse, dealing in coins and bills. His success led him to be appointed repre- sentative of the Court of Prince William I of Hanau. His five children, after learning the business, established themselves all over Europe forming one of the largest banking empires in the world.

In 1798 his son Nathan Mayer Rothschild moved to Manchester as a textile merchant. In just a few years, he managed to build up an impressive reputation. In 1809 he moved to the City of London and established an office in New Court, where he began engaging in banking activities such as negotiating bills of exchange and granting overseas loans. In those days London was seeing an influx of capital fleeing from revolutionary movements and the Continental Blockade. The city took on an intense dynamism, dis- placing Amsterdam as the European capital of finance. Nathan Mayer Rothschild’s banking activities soon earned great recognition. This was made evident in 1814, when he and his brothers were chosen by the British government to supply the necessary financial resources to defeat Napoleon.

From that point on, raising funds for various governments through the issuance of bonds became one of the family’s main activities.

The success of the London office served as an example to be followed by the other Rothschild brothers, who set up their businesses across Europe.

James, the youngest, founded a banking house in Paris, Salomon settled in Vienna, Carl in Naples, and Amschel, the eldest of the five brothers, took charge of the Frankfurt bank. By the time Nathan Mayer died in 1836, the Rothschilds had become the most renowned and prestigious bankers in

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Europe. Indeed, four years later the Bank of England appointed the company N M Rothschild & Sons as one of its gold bullion brokers. The Gold Rush also led to the creation of branches in California and Australia. After that, the gold market became one of the Rothschilds’ main businesses. In parallel, the company broadened its interests to include the mining of mineral deposits. Furthermore, in the mid-19th century the family secured a monopoly over the production of mercury – which was used for refining precious metals – through the acquisition of several Spanish mines. As a result, beginning in 1852 and for nearly a century, the Rothschilds were responsible for operations at the Royal Mint in London, refining and casting metals for the Bank of England and other international clients.

The political developments of the second half of the 19th century did not leave the family unscathed. The year of Revolutions, 1848, hardly affected them. However, the unification of Italy in 1861 brought about the closing of their bank in Naples. Meanwhile, the business of issuing bonds increased and continued to grow. It was due to rapid and decisive action by Lionel de Rothschild in 1875 that the British government was able to acquire an important stake in the Suez Canal.

James Mayer Rothschild, the last of the founding brothers, died in 1868. Although the different branches of the business were closely related to their respective founders, the second generation managed to maintain the family ties, strengthening them through the establishment of collabora- tion agreements. The House of Rothschild continued to play a leading role in European finances and, during the second half of the 19th century, it contributed actively to the industrialization of Europe, financing the con- struction of railroads and the creation of mining and steel industries.

At the end of that century, the Rothschilds’ interest in mining opera- tions soared. The family participated in founding The Exploration Company, dedicated to the exploration of mineral sites worldwide. It also financed the creation of the diamond mining company De Beers in 1887 and made other investments in the mining of precious stones in Africa and India. In 1901 the banking house in Frankfurt closed its doors following the death of the last living family member, who left no male heirs. Commercial ties to the

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Rothschild Group. 1798

After World War I the Rothschilds took their business in a new direction.

Their traditional activities financing governments gradually lost ground to financing commercial and industrial companies. One of their first clients was the London Underground. Nevertheless, the company’s interest in gold continued: the N M Rothschild & Sons bank was given a permanent role in fixing the world’s daily gold price, a tradition that continued until 2004.

After the downturns caused by the crisis of 1929 and the subsequent expropriation of the bank in Austria, the family attempted to refloat the banking business, with special emphasis on Paris and London, in addition to exploring new business lines. N M Rothschild & Sons began operating in the new Eurobond markets and, from Switzerland, took the first steps toward developing an asset management and risk capital business through the foundation of Rothschild Private Management Limited.

In 1981 the Rothschild House in Paris was nationalized by Prime Minister Pierre Mauroy’s socialist government, under the presidency of François Mitterrand. The family thus lost one of its longest-standing banks. However, they did not take long to react. Two years later, David de Rothschild founded the Rothschild & Cie. Bank, a successor of the former, which quickly recovered its position of leadership in international banking.

Currently, the Rothschild House operates as a single organization, present in over 40 countries, employing some 2,800 people. The group offers numerous specialized financial services, including financial advisory services, institutional asset management, wealth management and com- mercial banking.

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Bibliography

Company website: www.rothschild.com Date accessed: October 16, 2013.

Corti, Egon Caesar (1928), The Rise of the House of Rothschild, London:

V. Gollancz Ltd.

Ferguson, Niall (1998), The World’s Banker: The History of the House of Rothschild, London: Weidenfeld & Nicolson.

Kaplan, Herbert H. (2006), Nathan Mayer Rothschild and the Creation of a Dynasty: The Critical Years 1806–1816, Stanford (CA): Stanford University Press.

lópez morrell, Miguel Ángel (2005), La Casa Rothschild en España (1812–

1941), Madrid: Marcial Pons.

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Bertelsmann. 1835

The Bertelsmann group dates back to July 1, 1835, when printer Carl Bertelsmann (1791–1850) founded C. Bertelsmann Verlag in the German town of Gütersloh, North Rhine-Westphalia. Carl Bertelsmann was known for his intense political and religious activity, which explains the printing house’s original specialization in theological subjects. The printing house also published educational books and two newspapers, one of which, Evangelisches Monatsblatt für Westfalen, was in circulation until 1929.

Upon the death of Carl Bertelsmann, his son Heinrich (1827–1887) took charge, continuing the editorial tradition of his father, with whom he shared similar entrepreneurial ambitions and a strong political and religious sensibility. In fact, Heinrich would become renowned as a political figure in Eastern Westphalia. Under his leadership, the company experienced strong growth and, as a result of the acquisition of other printing houses, began publishing philosophical, philological, historical and fictional works, as well as children’s literature. This expansion made it necessary for the company to relocate to new premises, which would go on to serve as the company’s general headquarters until 1976.

Heinrich Bertelsmann died without leaving any male descendants and was thereby succeeded by his son-in-law Johannes Mohn (1857–1930), who had married his daughter Friederike in 1881. During the period in which Johannes ran the family business, the printing house returned to its focus on theological subjects. Johannes, however, could not recover from his traumatic experiences in World War I and in 1921, upon returning from the front, he was replaced by his son Heinrich (1885–1955).

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After the Great War the family’s fourth generation transformed the business into a modern, decentralized company. Despite the hyperinflation in Germany in the early 1920s, the company managed to become well established thanks to deep restructuring and modernizing strategies – strategies which, nonetheless, stayed loyal to the publishing line set by their predecessors and in close collaboration with Protestant organizations and societies. In parallel, the first sales and advertising strategies were implemented and fiction was officially added to the supply, although the publishing house continued to focus primarily on a Christian readership.

Under the Third Reich, in addition to classic and new literature, the company expanded its range of publications to include nationalist (völkisch) literature with anti-Semitic content, featuring Will Vesper as its star author.

Due to its alignment with the economic and political interests of the National Socialist (Nazi) Party, Bertelsmann emerged as one of the leading suppliers of the army (Wehrmacht), which generated an extraordinary increase in sales. It published books recounting experiences on the battle- front, as well as the Armed Forces series, a collection of classic and nation- alist literature published from 1939 for the entertainment of German soldiers. That same year, the theological publications were discontinued at the request of the government, and religious titles would not be offered again until 1941. The impressive increase in sales was achieved by subcon- tracting Dutch printing houses and enhancing the efficiency of its own production facility. In spite of this, the company was closed in 1944 by judicial order due to illegal procurement of paper, and it remained closed until a fine was paid shortly before the end of the war.

When World War II was brought to a close, Bertelsmann managed to reopen the business quite quickly. Although its facilities had been destroyed in a British bombardment, much of the printing equipment could be recovered and the company reemerged with the publication of schoolbooks commissioned by the British military government. In 1947 the baton was passed to its fifth generation representative: Reinhard Mohn (1921–2009), son of Heinrich Mohn.

Despite financial difficulties following the monetary reform of 1948,

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