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Family Business Conflict
March 26, 2010
Written By: Michelle Clark, Ph.D.

All families fight!

Families in business together face additional challenges far beyond those of most families: more proximity, less ability to “disconnect” when tensions are high, financial interdependence, and an intermixing of childhood roles with adult responsibilities. Friction between loved ones and business interests is what makes family businesses unique. Effective family businesses manage both family and working relationships productively, and most need assistance to accomplish this smoothly.
The consequences of family business conflict are twofold. In the business context, unmanaged or unresolved conflict can create havoc in the work environment, waste resources and prevent the realization of goals. In the family context, unmanaged or unresolved conflict can cause strife, tension, and competition for power -- leading ultimately to fractured relationships, resentment and distrust. Simply stated, a healthy family business is dependent upon, and interdependent with, a healthy family.
These activities help avoid conflict:
  • Clear expectations regarding pay, time-off, job descriptions and performance evaluation
  • Strategic planning that assures agreement about business goals and strategies
  • Communication training for effective negotiation and disagreement
  • Mutual agreement regarding appropriate work/family boundaries
  • Succession planning
  • Clarity regarding financial legacies and estate planning
  • Facilitated family business meetings that address issues in a timely and productive manner
These are indicators of a need for conflict resolution:
  • Reoccurring arguments that never seem to get resolved
  • An on-going feeling of “stuckness” or hopelessness regarding resolution
  • The “family” part of the work is harder than the work itself
  • Deterioration of family relationships outside of work
  • Triangulation and alliances
  • Conflicts that raise questions about the succession plan or family members staying in the business
When your family business is stuck in a conflict, it often is helpful to have an outsider assist with conflict resolution to: 1) develop procedures for problem solving, communication and solution implementation, 2) serve as a translator of family and business members’ communications, promoting empathy and understanding 3) educate family and business members on how to negotiate and communicate more effectively, 4) serve as a reality-tester, exploring the validity of members’ views and positions, 5) assists the members in reconciling differing interests, diminishing hostility and establishing trust, and 6) assists the members in drafting action plans for solution implementation

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