Of Feuds And Family Businesses
July 1, 2019 Leave a comment
Strong disagreements are inevitable in all human relationships, but families that own businesses are more at risk for serious conflict than ordinary families because the power, status, and money at stake are greater.
There are seven predictable stages of conflict.These stages are largely avoidable, but the owners of family businesses have to be aware of them,and of the ways to extricate themselves when they get caught up in a spiral.
The Seven Stages Of Conflict Are:
1) Interests Diverge :
An interest is a broad desire that a person or group of people have for something. Some interests are shared; others are individual. Most business families are united first and foremost in their wanting to keep the business healthy. However, given that family members have different roles and responsibilities as the family business grows, interests naturally diverge. Some family members work in the business, and some are owners (some are both; others are neither). Those employed in the business will be more inclined to channel profits to re-investment and bonuses, while owners will be disposed to pay higher dividends. Where anyone stands on a particular issue will be influenced by where they sit in the family business system. Read more of this post
For most people, conflict is uncomfortable. That can be especially true in families who’ve watched family conflict tear successful businesses to pieces:.What’s less often recognized is that too little conflict in a family business can have an equally destructive impact. The impact of both too much and too little conflict on both the family and their enterprise are almost identical. In both cases, the business can suffer from limited growth, poor decision-making, a loss of competitive advantage, and, in severe cases, the sale or split of the company. Similarly, families tend to break up into factions and suffer poor relationships. The mechanisms are different, but the results are the same.
In family businesses, hiring and staffing decisions are based on relationship and obligation as much as on competence and experience. After all, one purpose of family businesses is to provide employment for the family members ! But that doesn’t mean all family members perform effectively,all the time. People may slack off or stop collaborating, and sometimes they get a pass for their mistakes or behaviors. At times, they may even be disruptive to the smooth running of the business.
In the US some 350 non-employee businesses report a revenue of $5 million or more.
Grains, edible oils, utensils, fuels,aromatics, printing, moneylending, cinema,ship chandling etc.etc, a whole hodgepodge of seemingly unrelated businesses of the PSTS, PSTP, PSTC family meant I always knew it was possible for people to be simultaneously present and successful in widely divergent businesses.I also knew that if I listened carefully enough to the insiders,I’d understand the method behind what to outsiders looks like madness in these ventures.Ask me too how PSTS,PSTP&PSTC became shadows of themselves,and I have my views.Unfortunately such study is only good enough to tell me what not to do,what to guard against or insure.And all brakes is no good when you are setting out to build.What I really need in my position today are insights into the habits of P,S &T to which I could attribute their success.And to figure that out,I have nothing more than a few old papers and familylore affected by a few generations of retellings to rely on.And perhaps rely a bit on my gut instincts bred by the DNA we share.
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