Construction Company

Philippine Gulf Corporation

Key points for discussion:

- PGCI

o The company was the Zalamea’s family business. Though it is already a big corporation, ownership of the company still relies on being a Zalamea.

o Edgardo Zalamea as the first CEO.

 Was a good strategic leader as he was able to steer the company out of a potential crisis.

 Wasn’t able to fully train his sons for them to be able to manage the company properly.

- Eric Zalamea

o Both were incompetent leaders

 The company incurred many losses of manpower when they went into power.

 Eric cared nothing but getting money. He is greedy and is not yet competent enough to run the company, though he studied in the best schools in the country and abroad.

 As a top manager, he lacks both conceptual and diagnostic skills to be able to function well.

• Lack of conceptual skills – though they could take advantage of a boom in the industry in 1995-1996, they failed to capitalize on this and even incurred more losses.

• Lack of diagnostic skills – he doesn’t seem to get that the problem of the company mainly lies in how they spend the company’s finances. When he realizes this, his solution was to look for investors/buyers and not how to improve the company’s performance, which would be detrimental in the long run.

- What should the brothers do?

o Though fueled by greediness, selling the company to the Gorospe family would be the best thing to do for the company. The brothers are ineffective leaders, and having them stay as leaders would burn the company to the ground.