top of page
  • sarah12279

The Ten Most Common Causes of Conflict in the Family Business

The first in a series of blogs discussing common conflicts that arise in Family Businesses and how to avoid them.


Family businesses are the backbone of economies worldwide, from small startup to multinational corporations run by generations.  But blending family dynamics with business operations is no easy task because of the complexities involved and it is therefore not uncommon for there to be disagreements that cause potential threats to both the family and the business relationships. Understanding these challenges is the first step in mitigating potential conflicts. Here we discuss the ten most common causes of conflict in family businesses.


Family Business meeting

1. Lack of Clear Succession Planning


Succession planning is often a source of conflict within family businesses with uncertainty about the future leadership creating power struggles and resentment among family members. If the process is not transparent or perceived as unfair, family members may jostle for position and power, leading to tension and conflict within the business and also within the wider family relationships.

 

2. Differences in Vision and Goals


Family members may have different visions for the future of the business, leading to disagreements over strategic direction. These differences often arise when newer generations seek to modernise or consider new directions for the business against the wishes of older, more traditional family members.

 

3. Poor Communication


Like in any relationship, poor communication can lead to misunderstandings and conflict. In family businesses, this can be compounded by existing family dynamics, making it challenging to maintain professional communication, particularly when the hierarchical structure within a family business does not mirror the family's own generational hierarchy.

 

4. Clarity of Roles


In family businesses, roles and responsibilities can often overlap or be undefined, leading to confusion and inefficiency. This lack of clarity can breed resentment if family members feel their contributions are undervalued or overlooked.

 

5. Favouritism


Perceived or real favouritism can create divisions within the family business. This could relate to inconsistencies in salary, promotions, or attention from leadership, leading to a toxic work environment.

 

6. Work-Life Balance


The boundaries between work and family life can blur in a family business, leading to burnout and frustration. The pressure to always "be on" for the business can strain family relationships.

 

7. Financial Mismanagement


Disagreements over financial decisions, transparency, and the distribution of profits can lead to significant discord. This is particularly true when the business supports multiple branches of the family.

 

8. Resistance to Change


Resistance to new ideas or ways of doing business from either the older or younger generation can lead to stagnation and conflict. This resistance often stems from a fear of losing control or relevance within the company.

 

9. Wider Family Members


The introduction of spouses or partners into the business can be a source of conflict, especially if their involvement is seen as interfering or they are perceived to have an undue influence over decisions.

 

10. Lack of Professionalism


When family businesses fail to adopt a professional work culture, it can lead to conflicts. Professionalism helps in setting clear boundaries and ensures that business decisions are made based on merit rather than personal relationships.

 

Conclusion


While family businesses face unique challenges, understanding and addressing these common causes of discord can help in fostering a healthier, more productive work environment. Implementing professional business practices, such as clear role definitions, transparent communication channels, and fair decision-making processes, can mitigate many of these issues. Ultimately, the success of a family business lies in balancing the fine line between family ties and business needs.

 

Watch out for our next article which will demonstrate ways to mitigate the causes of conflict that we have addressed above. 

To find out more about how I can help with facilitating discussion and navigating conflict in your business, book a free, no-obligation, chat here.




Recent Posts

See All

Preserving the family Sunday lunch!

A short video on my work with family businesses to preserve the business and the family relationships If you would like to talk about how we can work together to protect your family business and your

コメント


bottom of page