Identifying and Addressing the Causes of Conflict in Family Business
23 Pages Posted: 6 May 2005
Date Written: May 2005
This paper describes the conflict that is typical in a family business and highlights some of the major factors that make family business conflict unique from other types of interpersonal conflict in the workplace.
Conflict is inevitable in any business, and often it's not a bad thing. Few people in business enjoy conflict but without it a company may not have the impetus to change and develop.
However many suggest that the failure to adequately control conflict in family business may contribute to the high mortality rate of family-owned firms.
The reason for this high level of failure is almost always due to a management failure to come to grips with the inevitable discord that arises when family members work closely together.
The difficulty for family business arises when family rules do not apply after they are transferred to the business system. This paper makes recommendations that assist practitioners in working towards an amenable resolution.
The focus of this paper is to identity common causes of conflict and it explores ways to manage or resolve this conflict in family business, with the view to preserving the existing business, ensuring its continuity in the short term and assuring succession for the long term. It also identifies some of the factors that make family business conflict difficult to resolve and highlight pitfalls for third parties or other non-family members working in this area.
Keywords: conflict, family business, non-family managers, non-executive directors
JEL Classification: D74, J12, M14
Suggested Citation: Suggested Citation