Otsuka Kagu: The Virtues of Being Modern

Otsuka Kagu, a Japanese furniture company, experienced a succession and strategy crisis when the founder’s daughter, who became Chief Executive Officer in 2009, deviated from her father’s business model to modernize the company. A rare public spat ensued when the father tried firing her, but she was backed by the Board and non-family shareholders. Having re-taken the reigns, Kumiko Otsuka proceeded with her new strategy. However, the company’s financial results soon deteriorated instead. Was her father right after all or was it a matter of time before the company would return to growth and profitability under the new strategy? What should Kumiko do?