Conflict in Family Businesses
According to The Institute for Family-Owned Business, nearly 80 percent of businesses are operated by "two or more members of the same family." Running a business in a professional way while also maintaining a close family bond can be a difficult balancing act. Conflicts can arise, whether the issues originate in the home or in the business environment. Resolving issues as they arise and before they arise is vital to keeping the family and business together.
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Significance
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Mixing family relationships into a business environment can be challenging. The family endeavors to create a successful business by working together. However, the family relationship is complex. Parents may have control issues, siblings may not agree on how to do things or one family member may be dedicated to growing the business while another is reluctant to be a part of the family business. Understanding and resolving the conflicts that occur in both the family situation and the business environment is a challenge that must be addressed for the health of the business and the family unit. If conflict goes unresolved, the business can fail and family ties can be broken, according to iBizResources.
Communication Considerations
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Communication is necessary in any relationship. Regularly planned meetings should be held to ensure any issues are addressed before they escalate and become a problem that can disrupt the business or harm relationships. Meetings should include every person who is part of the company or that may influence a family member. For example, if a sister works in the company, her spouse may influence her decisions, therefore the spouse participates in her decisions. This in itself can cause a conflict if other family members feel the spouse shouldn't be influencing the business. Unless these issues are discussed openly, conflict will escalate, according to iBizResources. More formal meetings ensure that the discussion is heard by everyone -- this is more than simply a conversation.
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Conflict Significance
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The word conflict has negative connotations; conflict, however, can be beneficial. Conflict is simply differing opinions. For example, if a new family member joins an established company, she may choose to improve operations. Conflict can occur if her idea is simply rejected. Instead of saying no to the idea, use, "interest based negotiations." For example ask her to do additional research to determine the idea's chances of success. Maybe the idea is a new product. Coaching her to prove her concept is an example of taking a potential conflict and making it a positive growth experience for everyone.
Structure
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The roles of individuals are important to establish in a family business. This means that someone has to be the final decision maker. If the person in charge is very authoritarian, innovative ideas and communication can be stifled. However, a weak person in this role can be pulled in too many conflicting directions and clear business practices aren't followed. Team members should establish how decisions will be made and agree that the team will accept the final decision after due process. What this means is that the family should establish how to raise an issue in a professional manner, what steps should be taken to look at an issue and then how the resolution will be made. If these, "ground rules" are established, family members will feel free to openly discuss issues.
Planning
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Planning for the growth of the family business is important to every member in the company, according to the Business Harmonizer Group. For example, if the father runs the company and has four children, who will take over when he retires? Will the decision create conflict among the siblings? Many of these conflicts can be resolved by planning for change. For example, one son might be committed to learning business management. As he moves into the role of learning to operate the business, other children may have an interest in running one division or opening up a new market. Individual interests, capability and business needs should be part of the ongoing discussions so that no surprises crop up to harm the family or the business.
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References
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