Saturday, September 21, 2019
Helping Family Businesses succeed.
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Conflict in Family Businesses

Despite the love and affection family members have for each other, when they are in business together, conflict is inevitable. In fact, family businesses are subject to the same kinds of conflict as can be found in all businesses, plus a whole host of those related and unique to the family dynamic. Therefore, it’s essential for your family business managers to be aware of the common underlying causes of workplace conflict in family businesses and how to best avoid conflict.

  • Unfairly distributed workload and compensation. In some family businesses, family members receive extra perks that non-family employees don’t, such as extra time off, more lenient hours, reduced workload and so on. Obviously, the non-family employees will become resentful, and conflicts can arise, creating an “us versus them” environment, and can increase employee turnover. To avoid this, make sure that your family members understand that they are to perform their jobs in order to receive their compensation – and that compensation should be based on market standards for everyone. Family members should be the hardest workers your family business has, because they are the face of the family.
  • Inappropriate hiring decisions. Brother John has been working in the family business for ages, when along comes Cousin Tom, who has never worked in the business, and suddenly, Tom is John’s new supervisor. It happens all the time, but just because it’s a family business doesn’t mean that family leaders are obligated to hire relatives into positions for which they are not qualified. Instead, establish clear criteria for each job description just as you would for a non-family business. And when Cousin Tom needs a job, find another one more suitable for him.
  • Unfair expectations of contributions. Though we do recommend that family members are your hardest working employees, you still shouldn’t expect them to make extreme sacrifices for the sake of the family business. This business may be your passion, but, just maybe, it might not be theirs. You can demand excellence, but don’t demand that your family member’s entire lives revolve around the business. Communicate to your entire staff the importance of work-life balance… and set an example yourself. (See more on work-life balance at Striking the Balance Between the Family and the Family Business.)
  • Lack of defined roles. Especially in a family business, a title may have relatively little to do with that family member’s authority and role. When a family member is called a manager but is continually overridden by elders or majority owners, conflict is bound to arise. To avoid this, ensure that all titles are appropriate to each person’s role. Likewise, business leaders should respect the contributions of all participants and encourage them to function to the full extent of their job descriptions.
  • Blurred lines between work and family.It may be tempting to bring family matters to the office and work problems home, but make every effort to keep the two worlds as separate as you can.

One of the best things you can do to help avoid conflict in your family business is to place an emphasis on open communication. But when conflict does arise, you may feel it helpful to enlist the assistance of a group of family members who are owners but not employees in the business. They may bring a more objective viewpoint to conflict and can provide assistance in resolving conflicts in the family business. For more on conflict management, see our article, Rules of Engagement: How to – and not to – facilitate workplace conflict resolution.

Contributing Sources: http://www.inc.com/guides/201102/7-rules-of-conduct-for-family-businesses.html; http://www.georgiasbdc.org/pdfs/bowden08.pdf

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