Conflict Issues in Family Businesses

The most common conflict issues in family businesses arise out of miscommunication and different visions and values. An experienced expert working with family systems can mitigate and solve those conflict issues in family businesses.

An example of conflict issues in family businesses

A father, founder and controlling owner of a family business operating in the hospitality sector has been away to an exhibition. During his absence his children led by one of the siblings who was being prepared to take over the management of the company, had agreed to implement a joint decision that their father could definitely agree with. The siblings, knowing their father’s character believed that he will not be ready to hand them over the reins of the business for many years to come if ever, and have lately become increasingly frustrated about the treatment they were receiving. The siblings believe that due to their lack of influence and their ability to create new opportunities for the business which were not being accepted by their father, will shortly render the business uncompetitive.

When the father and two of the siblings finally crossed swords, this took place in front of other staff, with the father angrily confronting his siblings for not consulting him on their decision. The children became defensive and stormed out.

This was not the first time that such a scene had happened. The more time passed the frequency of such occurrences was increasing. The issue is that the relationship processes in this family enterprise have been compromised. Why has this happened? Why do we have the same fights all over again? What are the the reasons for such conflict issues in family businesses?

When analysing conflict between individuals, in many instances we tend to attribute the problem to an individual. In relation to the above example, the siblings feel that they have an overly controlling father, while the father sees his children as still immature, impatient and disrespectful to authority. On the other hand family systems experts would see the problem as arising due to relationship issues, where the behaviour of the father and his siblings is being mutually influenced on each other, that is the actions and reactions between father and siblings is “coupled” in a way that the controlling behaviour of the father is likely to be countered by the siblings with impatience and protests, possibly sometimes by wielding power which they as yet do not have, hence inviting the controlling behaviour from the father’s part resulting in these typical conflict issues in family businesses.

Conflict Issues in Family Businesses: Missing Communication

These kinds of conflict patterns are common in family businesses. The siblings on the one hand want to demonstrate to their father that they now have what it takes for them to manage the business into the next generation but fears that they will never manage to get the required confidence from their father.

Conversely, the founding owner who has worked so hard to develop the family business continues to worry that if he lets go, his siblings could not understand the sacrifices he had to make, the hard work he had to undertake, and that his life could be without meaning after he hands them control.

Therefore, the issue is that each side has to manage internal conflicts and the fear of being undervalued and under appreciated, at the same time not realising the impact that each of their behaviour is having on the other side. All this is the result that their vision, values, expectations and goals of the business are never discussed.

What is required is that father and siblings need to start discussing these typical conflict issues in family businesses and more. They have to clearly establish:

  • The fact that there are different avenues leading to the same point, that is, father and siblings have different characters and capabilities and that time changes everything hence new blood could be ideal for the business
  • They have to accept that they could have a different vision and a different set of values from each other. As a result of this acceptance the discussion can now begin on the establishment of a clear mission, vision and values for the family business
  • It is also important that each side acknowledges the important contributions delivered to the business by each generation. The siblings understanding their father’s contribution and the father appreciating that his siblings are the future of the business.

Once there is this acceptance, an open and honest discussion can be opened about these conflict issues in family businesses to create the necessary structures and planning processes that would need to be addressed to secure the continuity of the business with reduced confrontation. This could be achieved by the father involving his siblings in the discussion of his plans and inviting ideas how his plans could be improved. Another important area is that of developing a clear succession plan both in management and ownership with clearly defined timelines. In this way the father is creating a clear framework of the way forward and adresses the conflict issues in family businesses. Once such a clear direction is set in place and agreed upon, there should not be any delaying or procrastination from their father’s side in meeting the timeline deadlines. The siblings on their part have to recognise the wealth of experience that their father has and mutually agree on a progressive increase in the level of divisional decision making that the siblings would be responsible for. During this transition phase the siblings have to be respectful of their father’s right to retain authority and have the final say, keeping in mind that with time they will have more in the final say until that time that they will be in full control.

Experts – a solution for conflict issues in family businesses

The above discussed scenario will normally have a much better chance of success if undertaken with a trusted and experienced expert working with family systems. He knows the most common conflict issues in family businesses and how to address them. This family systems specialist will be able to facilitate the sometimes hot discussions especially when family members are in conflict. Unfortunately, many a family business would be in denial to their precarious situation. If these situations are not nipped in the butt at the appropriate time, the only result will be of a complete fall-out between the family members with the probability of the business going to ruins.

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