Discerning the inertial effects of current decisions on long-term performance in family firms: the rise and fall of Casa Florio

Investigating the rise and fall of a business is commonly viewed as a matter of searching single causes to be linked with corresponding effects. Such an atomistic and static picture of the driving forces of business success and decline often produces a superficial understanding of observed phenomena.
This might be the case of Casa Florio, a family company successfully started in the beginning of the 800s. Within the space of two generations, it became a giant embracing different unrelated industries.
The business success gradually gave rise to a strong image of Casa Florio in the Mediterranean area, which exponentially boosted entrepreneurial and political contacts and Florios’ quality of life. However, by the end of the 800s, in spite of the Florios’ rising financial and social performance both the firm and the family collapsed.
To understand the structural causes of the business rise and fall, this paper adopts a feedback approach focused on the analysis of dynamic relationships between Casa Florio’s values and its local and extended environment’s culture.

Paper presentato: 20th International Conference of The System Dynamics Society – July 28 – August 1, 2002 – Palermo, Italy