Family Business Conflicts

Conflict is a normal and expected part of every relationship. It isn’t always destructive; in fact, it can lead to positive outcomes. However, if it becomes a style of relating to others within a business team so that the group becomes polarized, it can be extremely destructive.

According to the Family Firm Institute, 80 to 90 percent of all business enterprises in North America are family owned. The people who work in these companies have many of the same kinds of conflicts as in any other company, but there are some issues that are more common in family businesses. Common issues include the following:
• Disagreements over turf (who should do what; the roles of children, siblings, spouses, and out-siders)
• Disagreements over policy (how things should be done)
• Conflicts of personality and style
• Resentments over money; sharing the wealth between those who work in the business and those who don’t
• Management of the company’s growth
• Succession planning
• Disagreement over who should be involved in what phases of the business
• Business relationships affecting family relationships
• Anger about the amount of time required by the business
• Unclear boundaries separating business and family matters
Some simple conflict resolution strategies can help prevent and resolve these conflicts.

Create an agreement within the company that all members will follow these rules to prevent conflicts:

1. Define and agree on the company’s mission, values, and policies. These form a structure that holds the business together and determines how decisions are made. When they are spelled out and agreed on, there is less potential for conflict.
2. Develop a strategic plan to guide the growth of the company.
3. Design an organization structure and writtenjob descriptions. Specify who is responsible for what.
4. Set up a process to evaluate each person’sperformance on a regular basis.
5. Agree to bring issues out in the open before they become problems.
6. Be aware of situations that trigger conflict, and respond to them when you notice them.
7. Have a process for resolving conflicts. Bring it up at a meeting, and get people to agree on what they should do when viewpoints differ.
8. Agree to handle business conflicts at the office, not at home.
9. Teach employees the following communication snd problem-solving skills, and expect them to use them:
• Define problems in a nonblaming way.
• Listen with empathy.
• Make requests assertively.
• Brainstorm solutions to problems.
10. Triangulation is the process in which two people side against a third. It can become a serious problem in a family business. Teach employees to manage conflict by teaching them how to avoid triangulation.
11. Use team-building techniques to help employees build stronger relationships and develop more productive communication patterns. Find an outside facilitator to help you with this.
12. Teach the company’s supervisors to build their work teams and manage conflict through regular supervisory skills training. This training should address the following skills:
• How to demonstrate effective listening skills
• How to encourage open communication among team members
• How to empower team members by setting effective goals
• How to encourage creativity and initiative
• How to resolve conflicts in a healthy and productive manner.


Teach employees communication and

problem-solving skills,

and expect everyone to use them.


Conflict arises at times in every business relationship, even when guidelines such as those just listed are in place. There are several time-tested guidelines that will help resolve any conflict. These are a few of the most effective:

Avoid Participating in a Defend/Attack Spiral.
This is the process that often happens when two people or groups engage in a conflict. The process is as follows:
A attacks B.
B defends herself and attacks A.
A defends herself and attacks B.
B defends herself and attacks A.

Most of us have been caught in one of these spirals and know how nonproductive they are. Rather than perpetuating such a process, it is better to interrupt it by choosing to avoid saying anything that would be perceived as aggressive or defensive.

Example 1: TOM: “I can’t believe you are being so rigid.”
SARA: “Rigid! You should talk! You are completely bull-headed.”
TOM: “Right! You should try listeningto yourself. You are impossible.”

Example 2: TOM: “I can’t believe you are being so rigid.”
SARA: “You’re not happy with what I’ve asked for.”
TOM: “You’re damn right! You have to consider what I want.”
SARA: “Tell me more about it, then. I’ll be happy to listen.”

In Example 1, Tom and Sara dig themselves in deeper with each statement. In Example 2, Sara blocks the defend/attack spiral and makes it possible for communication to resume.

Prevent Argument Escalation.
Everyone has been in an argument that has escalated. Before you know it, the issues are blown out of proportion. The following communication skills can help prevent this from happening:
• Stick with I-statements; avoid you-statements. (“I feel confused when you refuse to explain why you think that way” instead of “You are always so obstinate!”)
• Avoid name-calling and put-downs (“A reasonable person could see that . . .”).
• Soften your tone.
• Take a time-out (“Let’s take a break and cool down”).
• Acknowledge the other person’s point of view; agreement is not necessary. (“So you think that we should start working on this later this year.”)
• Avoid defensive or hostile body language (rolling eyes, crossing arms in front of body, or tapping foot).
• Be specific and factual; avoid generalities. (“This will cost $40,000 over the coming year” instead of “This is way too expensive.”)

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