Studies Illustrate the Factors of Intrafamily Conflict in Family Businesses

Summary of:

Kubíček, A. and Machek, O. “Intrafamily conflicts in family businesses: A systematic review of the literature and agenda for future research” (2020). Family Business Review.

Background & Theory:

Research in the field of family business conflicts is surprisingly uncommon, considering the large range of disagreements that can occur within family businesses. Disagreements such as rivalries among family members, struggles around the inability to balance work and family needs, and marital disagreements can plague families and the success of their business. This research study seeks to consolidate a number of past studies to understand how to better address conflict in family businesses.

Question(s):

Research was consolidated to answer the following questions:

  1. What is the nature of intrafamily conflict in family businesses?
  2. What are the major drivers and effects of intrafamily conflict?
  3. How can intrafamily conflict be resolved?

Methods:

To address the research questions, researchers conducted a systematic literature review based on an input–process–output (IPO) framework. This type of framework enables categorizing variables, identifies relationships and patterns, and presents research gaps. To find the past research studies, keywords like “conflict”, “rivalry”, “tension”, “family business”, “family own” and “family firm” were selected and searched on sites like Web of Science, Scopus, EBSCO Business Source Complete, and EconLit. These searches led to a final sample of 88 publications.

Results:

In terms of the nature of intrafamily conflict in family businesses, this study consolidated past research and categorized the research results based on conflict type. This included a unidimensional approach to conflict, relationship conflict, and task and process conflict. The most common of these in the studies was relationship conflict. In this study, relationship conflict was referred to as affective conflict, relational conflict, and interpersonal conflict. As one would expect, the connectedness of family and business creates challenges when disagreements occur in family businesses. Relationship conflict seemed to be the most highlighted topic in many of these studies. Relational attributes that can lead to conflict include family communication style, asymmetric altruism, and perceived injustice among siblings. All of this considered, it is suggested that bad family functioning may result due to the emergence of relationship conflict.

In terms of resolving conflict, this study examined the functionality of corporate governance, family governance, and professional intervention. Corporate governance includes the implementation of non-family managers or trusted advisors from other family businesses. However, corporate governance does not necessarily improve performance in family businesses. Family governance occurs when the family implements mechanisms like a family council and family protocols, which can help lead to intrafamily dispute resolution. Relationship conflicts can be mitigated here by establishing clear policies regarding a family member’s involvement, career advancement opportunity, and compensation plan. Finally, professional intervention occurs when the family hires outside resources to help resolve disputes. Utilizing a firm with mediation services can help in resolving such disputes. Additionally, one study noted that educating family members on their personality differences can help to improve working relationships.

What We Can Learn:

Looking over this research, we can take away this key insight:

  • Relationship conflict can be detrimental to family members involved in business together. Establishing rules and guidelines for the family members can be a proactive measure to prevent such conflict. However, if needed, the use of mediation can be a helpful resource in beginning a path towards resolution.

Final Takeaways

For Consultants: From a conflict resolution perspective, family businesses are different from typical organizations. Understanding the dynamics and protocols behind a family business is essential to helping the family, whether through mediation or consulting.

For Everyone: Family conflicts in business are much different from your typical workplace conflicts, especially when relationship conflicts are involved. Understanding resources and options for limiting relationship conflict is key to resolution.