Ayala corporation: nation building and succession (2024)

Ayala corporation: nation building and succession (1)

Article

Lessons from the winner of the 2014 IMD-Lombard Odier Global Family Business Award

By Benoit F. Leleux and Anne-Catrin Glemser

6 min.

October 2014

PRINTABLE PDF – Less than 1MB

Receiving one of the most prestigious accolades for “excellence in family business” was a memorable moment for the ten Zobel de Ayala family members gathered in Dubai on October 16. They belong to the seventh and eighth generations of the family that has steered Ayala Corporation, one of the Philippines’ oldest and most successful conglomerates, through the ups and downs of an emerging market for over 180 years.

Since the company was founded in 1834, its mission has been anchored in three core values: integrity, long-term vision, and trust that empowers leaders. There are several related reasons for Ayala’s success over time, but two in particular stand out. One is the company’s strong commitment to nation building and development, reflecting its belief that inclusion and sustainability are keys to continued success. The second, related, factor is a series of well-planned successions, which has resulted in consistent values across generations.

Nation building

Since its foundation, Ayala has always been an important contributor to the Philippines’ development and growth. Jaime Augusto and Fernando Zobel de Ayala, respectively the seventh-generation chairman and president of Ayala Corporation, have continued this tradition and act as ambassadors for the Philippines, promoting the country as an up-and-coming market to global investors and potential business partners. Like their father, Don Jaime Zobel de Ayala, they believe that nation-building activities such as these will ultimately help the long-term growth prospects of the family conglomerate.

In the words of Fernando Zobel de Ayala: “We consistently look for ways to give back to our country; through Ayala’s businesses, through the Ayala Foundation and through our individual efforts.”
The family has combined its nation building with professional management structures. Many of the Ayala Corporation’s entities are publicly traded without compromising family values and control.

By the end of 2013, Ayala’s listed companies accounted for 20% of the Philippine Stock Exchange Index capitalization, and employed 42,000 people. Gross revenues from all its companies, including associate and jointly controlled entities, reached 308 billion Philippine pesos (about $7.1 billion). In 2013, the market capitalization of the entire Ayala group amounted to 1.4 trillion Philippine pesos (about $32 billion).
The group holds majority stakes in a range of businesses, principally in real estate development (Ayala Land), banking and financial services (Bank of the Philippine Islands, or BPI), telecommunications (Globe Telecom), water utilities, electronics manufacturing services, automotive dealerships, business process outsourcing, infrastructure, and power generation.

The succession challenge

The Zobel de Ayala family has always managed succession carefully, and 18 consecutive family members have now been at the helm of the group. Each generation has left its “pioneering mark,” introducing new businesses and entering new industries, developing new business models and building strategic alliances and partnerships that turned Ayala into an international player with leadership positions in its various businesses.

Ownership was passed to the seventh generation relatively early, when the nine shareholders were between 27 and 39 years old. They were well aware of the importance of further developing the family’s governance and their own generational footprint. Strictly separating the “Business of Business” from the “Business of Family,” the seventh generation set aside time and invested in strengthening family bonds through communication and educational activities. They also introduced a range of shared experiences to transmit the family heritage and values to the eighth generation, a group of 30 cousins.

As Jaime Augusto Zobel de Ayala, from the seventh generation, says: “From the earliest days, we made sure that we stayed unified as a family, organized ourselves effectively, and remained attuned to the changing needs of the business.”

In spring 2014, the first eighth-generation family members attended Ayala’s executive strategy meeting, which takes place every two years. Among the topics discussed were how to strategically allocate resources to grow the corporation within and/or beyond the Philippines, and how to venture beyond traditional business models. As potential future leaders of Ayala, the eighth generation also had to consider fundamental questions. Was the recipe for Ayala’s success over the past 180 years still relevant for the future? Would inclusion and nation building continue to serve as reliable pillars for the business? And how should they best prepare themselves to become the next generation of responsible stewards?

Over time the family has developed a number of criteria for assessing potential next-generation leaders. These include, but are not limited to, academic excellence, a balanced personality, being respected by the cousins, and having a fair and understanding character. The eighth-generation members know they need to work their way up and gradually move across the different business units while being monitored and coached by Ayala’s non-family senior staff. This will enable them to discover the size and complexity of the different businesses.

As one eighth-generation member puts it: “The opportunity to be involved in the organization is very exciting, though we have a lot to learn and achieve before determining what our trajectory within the organization will be.”

The eighth generation is aware of how unique its situation is. Another member says: “To have the exposure to work with many different high-caliber CEOs and hear them speak about what the next five, ten years have in store for each of the companies – that is a once-in-a-lifetime opportunity. I don’t think either of us takes it for granted.”

Before long, the eighth-generation members of the Zobel de Ayala family will face managerial challenges of their own as they steer the group towards the end of its second century. But it seems safe to assume that they will maintain the longstanding commitment to nation building and will take great care in preparing the eventual handover to the ninth generation.

Benoit Leleux is Stephan Schmidheiny Professor of Entrepreneurship and Finance at IMD, where he co-directs The Next Generation (TNG). This is a program for young family members, those already involved, and those who have been identified as potential next leaders in the management, ownership or governance of their family business.

Anne-Catrin Glemser is Family Business Research and Development Manager at IMD.

The IMD-Lombard Odier Global Family Business Award was created in 1996. The aim of the award, which provides a unique platform for sharing best practices and analyzing the economic backdrop, is to promote family businesses by highlighting the exceptionally high standards they are capable of and the many forms they may take. The 2014 award ceremony took place during the 25th Summit of the Family Business Network International (FBN-I) in Dubai.

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Ayala corporation: nation building and succession (2024)

FAQs

What are the key to success in Ayala Corporation? ›

Anchored on values of integrity, long-term vision, empowering leadership, and with a strong commitment to national development, Ayala fulfills its mission to ensure long-term profitability and value creation.

What is the strategy of Ayala? ›

Our long-term growth is built on this market-leading platform and our five-pillar strategy of growth, margin improvement, capital efficiency, and brand building.

What is the mission statement of Ayala Corporation? ›

To improve lives through resilient businesses and risk-calculated investments that have a meaningful and lasting impact on the country's economic and social landscape.

What are the qualities of Jaime Zobel de Ayala which made him to pioneer in urban development through real estate? ›

1 are the qualities of Jaime Zobel de Ayala which made him pioneer in urban development through real estate? In this kind of industry, perseverance and determination helped in the pioneering of real estate development and banking in the country.

What is the key to the success of the company? ›

Consistency is key to success in business. If you are selling products or offering services, make sure that you consistently offer high-quality products and services. This way, your customers will trust you. Once you have established trust with your customers, they are less likely to move to your competitors.

Is Ayala a good company to work for? ›

93% of Ayala Land employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Ayala Land 3.6 out of 5 for work life balance, 4.3 for culture and values and 4.0 for career opportunities.

What are the goals and objectives of Ayala? ›

We improve lives.

By making good business that doesn't just focus on returns, we contribute to the communities that we serve, and ultimately to the country as a whole.

What is the competitive advantage of Ayala Corporation? ›

Furthermore, the paper tackled about how Ayala's competitive advantage is not only driven by its diversification strategy but also with its ability to preserve its core, ability to practice conservative financing, and its ability to initiate innovation.

What are the Ayala Foundation values? ›

Today, it envisions communities where people are productive, creative, self-reliant, and proud to be Filipino. As a believer in creating shared value and inclusive business, it operates in three thematic program areas—Education, Sustainable Livelihood, and Love of Country.

How does Ayala Corporation impact society? ›

Ayala is also a leader in corporate social responsibility. Through Ayala Foundation, the group's social development arm, it has helped improve the lives of people and communities, through programs in education, community leadership, suitable and sustainable livelihood, and arts and culture.

What is Ayala motto? ›

A new slogan was also launched, entitled, "Enhancing land, enriching lives for more people". Ayala Land's president then, Jaime I. Ayala, said that the brand evolved to "reflect its sharper customer focus and accountability".

What are the core values of Ayala Land? ›

Our core values of Integrity, Reliability, and Commitment, have been a magnet for people who are proud to give us their best as part of our organization, and for our customers who are proud to make our homes their own. Adherence to what is true. Consistency of results, the foundation of trust.

What are the attributes of Ayala Corporation? ›

Since the company was founded in 1834, its mission has been anchored in three core values: integrity, long-term vision, and trust that empowers leaders.

Why was the Plan of Ayala made? ›

Zapata was enraged by Madero's betrayal and fought against him with both the pen and the sword. The Plan of Ayala was designed to make Zapata's philosophy clear and draw support from other peasant groups.

What is the nature of business of Ayala? ›

Ayala Corp (Ayala) is a business conglomerate with diversified business operations. It operates in real estate, financial services, water, telecommunications, automotive, power generation, transport infrastructure, electronics manufacturing services, business process outsourcing, education, and healthcare industries.

What are the 5 success factors? ›

The five critical success factors are strategic focus, people, operations, marketing, and finances. How to find success factors? The first step in finding and identifying success factors is understanding the overall objective of a project and the processes required to achieve it.

What are the 3 keys of success in industry? ›

The three key things that all long-lasting companies share, he posited, are: Great vision. Great financial management. Great people.

What 3 things make a business successful? ›

No matter how bold or ambitious your plans are to grow your business, the key to your business's success lies in three critical, interdependent components: operational excellence, customer relations/communications and financial management.

How much does Ayala pay its employee? ›

Loading results...
Job TitleAverage SalaryCompany Name
FT Administrative Assistant/Research Assistant - Perimeter Area (2202)$64,148Ayala Corporation
FT Office Manager (2214)$98,766Ayala Corporation
FT Accountant (2224)$83,304Ayala Corporation
FT Software Sales Representative (2211)$110,962Ayala Corporation
6 more rows

Which company is the best employer? ›

India's Best Companies To Work For (Top 100)​
RankCompany NameHeadQuarter
1HiltonGurgaon
2Cisco Systems India Private LimitedBengaluru
3REA India Pte. Limited (Housing, PropTiger and Makaan)Gurgaon
4SalesforceBengaluru
6 more rows

Why is Ayala stocks falling? ›

AYALA CORP. shares dipped due to bearish market sentiment as investors continue to monitor the Russia-Ukraine conflict and its impact on surging oil prices. Data from the Philippine Stock Exchange showed a total of 2.83 million Ayala Corp. shares worth P2.

Why is it good to invest in Ayala Corporation? ›

With over a century of envisioning, building, and developing masterplanned, mixed-use, and sustainable communities, Ayala Land's rich history and illustrious reputation remain unparalleled in the country. It leads the industry in raising the standard of commitment to innovation and value appreciation.

What are the goals objectives? ›

A goal is an achievable outcome that is generally broad and longer term while an objective is shorter term and defines measurable actions to achieve an overall goal. While different, the two terms are often used in unison when working on a project. This is because both are essential to planning and executing a project.

Who owns Ayala Malls? ›

Ayala Malls is a retail subsidiary of real estate company Ayala Land, an affiliate of Ayala Corporation.

What are the strengths of Ayala? ›

The Ayala Corporation is known for its financial and organizational strength, its business stability, quality products and services.

What are three major competitive advantages? ›

The three main types of competitive advantages are differentiation, cost advantages, and focus advantages.

What are five competitive advantages? ›

The five competitive strategies are: cost leadership, differentiation, innovation, growth, and alliance. Meanwhile, information systems could be a critical enabler of these five competitive strategies.

What is the foundation of core values? ›

Core Values are the characteristics and qualities an organization, a team, or an individual defines as being at the heart of what they are about and how they will conduct themselves. They are the principles that determine who you are and what you are about above all else. It is the soul of the organization.

What is Ayala sustainability blueprint? ›

Ayala believes that sustainability is key to bridging critical environmental, social, economic, and governance gaps that have disadvantaged many Filipinos. In 2012, we crafted a sustainability philosophy, which articulates our thinking around responsible and inclusive growth and its relevance to our Business.

What family owns Ayala? ›

The Zóbel de Ayala clan is a prominent Filipino family of Spanish and German descent who were the founders of Ayala y Compañía (now Ayala Corporation) and patrons of the Premio Zóbel literary awards. The clan is directly descended from Jacobo Zóbel y Zangroniz (1842–1896) and Trinidad de Ayala (1856–1918).

What is the ethical responsibility of Ayala Corporation? ›

“We have to ensure that what we do is good for them, too; not only for today, but for tomorrow. It's about being a responsible corporate citizen, and understanding that care for the environment, fair treatment of people and good corporate governance are part and parcel of doing business.”

What are the initiatives done by Ayala land to create positive impacts to the society? ›

These are: Site Resilience, Pedestrian Mobility and Transport Connectivity, Eco-efficiency, and Local Economic Development. Our initiatives aim for positive impact on the community and shape a deeper commitment to environment conservation.

What are the threats of Ayala land? ›

The Company acknowledges the risk of Ayala Land's operating properties and ongoing projects being impacted by adverse environmental issues such as natural disasters, water shortage, effects of climate change, earthquake, and other similar events.

What does Ayala mean in Spanish? ›

What is the meaning of the name Ayala? The name Ayala is primarily a female name of Hebrew origin that means Female Deer/Hillside Or Pasture. Hebrew name meaning "female deer" or a Spanish surname for someone who lived near a hillside or pasture.

What does Ayala mean in English? ›

Meaning:deer or gazelle. Ayala is a feminine name of Hebrew origin that is sure to keep that string in baby's step. Translating to “deer” or “gazelle,” this name is a beautiful choice to help baby's grace and elegance blossom.

Who owns Ayala now? ›

Founded in 1834, Ayala Corp. is the Philippines' oldest conglomerate, controlled by the Zobel Filipino-Spanish family. Currently, the company is led by brothers Jaime Augusto Zobel, who serves as the company's chairman and CEO, and Fernando Zobel, who sits as the president and chief operating officer.

Who is the target market of Ayala land? ›

The Ayala Land Premier brand is best known for its exclusive and distinctive developments that appeal to the high-end market; a second brand, Alveo Land Corp., targets the young urban professionals who thrive in vibrant communities that appeal to their active lifestyles; and a third, Avida, caters to middle-income ...

What is the difference between Ayala Land and Ayala Corporation? ›

(ALI) is a real estate firm based in the Philippines. It is a subsidiary of Ayala Corporation. It began as a division of Ayala Corporation until it was spun off and incorporated in 1988. It became publicly listed in the Philippine Stock Exchange (PSE: ALI) in July 1991.

What is the success story of Ayala Corporation? ›

The Ayala success story started in 1834 with the establishment of Las Islas Filipinas. Landowning entrepreneur Domingo Roxas and the young Antonio de Ayala built a distillery using cane sugar and began competing overseas. Exporting products to Europe, they found a bestseller in Ginebra San Miguel.

What is the brief history of Ayala Land Inc? ›

Ayala Land was created in 1988 when the Ayala Group decided to spin off its real estate division so that it could focus on property development. The company, one of the largest in the Philippines, has core operations in property development and management, commercial leasing, as well as hotels and leisure services.

What was the Plan of Ayala quizlet? ›

What was the Plan de Ayala? Accusatory towards Francisco Madero, the Plan de Ayala called for another rebellion against the Mexican elite in the name of land reform and the democratization of Mexican society. The Plan was issued by Emiliano Zapata.

What is the background of Ayala land? ›

A pioneer in integrated mixed-use developments

Ayala Land, Inc. was the real estate division of Ayala Corporation until it fully branched out on its own in 1988. Its beginnings are anchored on the development of Makati. Having seen the potential in a large, uncharted land known as Hacienda Makati.

What is the nature of this business? ›

The nature of business means that the purpose of a business is to provide services and products to meet the needs of customers in the market. It refers to the market sector in which the company conducts procedures and the general specifics of the company.

What is company policy of Ayala? ›

Ayala acknowledges its responsibility to the communities where it operates. The organization recognizes the stakeholders' legal rights and commit to engaging with them in a fair, honest, and ethical manner.

What are the key activities of Ayala land? ›

Business Summary

Ayala Land, Inc. engages in the development of real estate properties. It operates through the following segments: Property Developments, International, Shopping Centers, Offices, Hotels and Resorts, Construction, and Property Management and Others.

How did Jaime Zobel de Ayala become successful? ›

Jaime Zobel didn't plan to start his career in the family business. However, after completing a training program at the venerable Ayala Corporation—the largest and most widely diversified conglomerate in the Philippines—and attending HBS, he accepted a short-term position at Ayala and never left.

What are the core values of Ayala Coop? ›

To uplift the quality of life of its members by ensuring its viability and growth through superior loan products and diversified services, good returns on investments and excellent customer service. All these will be achieved by a team of highly motivated, dedicated and professional individuals.

What is the success story of Ayala? ›

The Ayala success story started in 1834 with the establishment of Las Islas Filipinas. Landowning entrepreneur Domingo Roxas and the young Antonio de Ayala built a distillery using cane sugar and began competing overseas. Exporting products to Europe, they found a bestseller in Ginebra San Miguel.

How did the Ayala became rich? ›

2022 Philippines 50 Richest Net Worth

Now Jaime's seven children control more than one-third of the $3.9 billion (revenue) conglomerate. His grandfather started with a distillery in Manila, then expanded the business into banking, real estate, hotels, telecommunications and education.

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