Nearly 75 years ago a charismatic Brazilian entrepreneur named Enrique Rosset started an eponymous textile and apparel manufacturing company in São Paulo. Some 40 years later he and his oldest son decided to diversify by acquiring Valisere, an upscale but failing lingerie business. Over the decades, Enrique and his four sons transformed their operation into one of South America’s leading textile and apparel manufacturers. During the 1990s Grupo Rosset expanded into swimwear, with great success. But the family knew the business faced critical strategic challenges. The rise of shopping malls was weakening the small Brazilian retailers who’d made up Rosset’s primary distribution channel. Chinese imports were beginning to pose serious competition. The advent of digital fabric printing would undercut Rosset’s core manufacturing strength unless the company adopted the technology itself. Enrique’s sons, who’d led the firm for 20 years, had to make a crucial decision about which of the five members of the third generation should assume the leadership role.

A version of this article appeared in the January–February 2012 issue of Harvard Business Review.