MGT 4550 - Family Business Management

Transcription

MGT 4550 Family Business Management
CONFLICT MANAGEMENT
Chapter 4
Family Business Management,
Concepts and Practice
by A. Bakr Ibrahim & Willard H. Ellis
Instructor: Dr. Irene Duhaime
Class Schedule - Week 4
 CONFLICT MANAGEMENT IN
FAMILY
BUSINESS

Reading: Chapter 4

Cases:

Precista Tools AG (A), p.157 FBM
Northern Construction Inc., p.203 FBM

Questions 9, 24, 70, 77, 85, 86,90 FBAB


PROJECT TOPICS DUE
Dr. Irene M. Duhaime
2
Contents
 The
Traditional Vs. The Behavioral View
 Causes
of Conflict in the Family Business
 Common
Sources of Conflict
 Father-Son/Daughter
Rivalry
 Rivalries
Between Brothers: the Favorite
Son Syndrome
continued ….
3
Contents
…. continued
 Conflict
Between Other Members of the
Family
 Conflict between Family and Non-family
members
 Managing Conflict
 Other
Conflict Resolution Methods
4
The Traditional Vs. The
Behavioral View
 Traditional View

“..conflict is unhealthy for organizations and
must be avoided”
 Contemporary

Functional / Positive


or Behavioral View
innovation, creativity, energy and enhanced
performance
Dysfunctional / Negative

must be avoided or managed to minimize damage
5
Causes of Conflict in the
Family Business
The Overlap Between the Family and Business Systems
The
Business
System:
Resultoriented
Conflict
The
Family
System:
Emotionally
based.
Figure 4.1 Conflict in Family Firms
Family Business management, Ibrahim & Ellis
6
Family Business
 Ambiguity
of roles
 Differences
in power and status among
family and non-family members
 Hasty
and /or unfair succession process
 Rivalries
 Favorite
among family members
Son/daughter syndrome
…continued
7
Family Business
.. continued
 Lack
of clear and coherent policies
regarding career development,
compensation and hiring
 Lack
of code of conduct
 Lack
of proper job descriptions and clear
boundaries
8
Common Sources of
Conflict
 Father-Son/Daughter
Rivalry
 Rivalries
between offspring
 Conflict
between other members of the
family
 Conflict
between family and non-family
members
9
Father-Son/Daughter
Rivalry
 Founder’s



Psychological Make-up
Strong sense of attachment
Reluctance to give up control and power
Unwillingness to delegate
 Son/daughter has
a need for
independence and grows impatient
 Conflict leads to strained relationships,
rivalry and power struggle
10
Father-Son/Daughter
Rivalry
 Value
Difference Between Generations

Differences in values, vision and management
styles

Leads to increased tension
11
Father-Son/Daughter
Rivalry
 The


Path to Self-Validation
Drive to equal or outdo father
Feeling the he/she cannot measure up to father
 Offspring




should
Do his/her own thing and make own choices
Understand own feelings and own motivation
Understand father’s feelings
Prevent father from playing off against other offspring
Source: Levinson: “Conflicts that Plague the Family Business”, Harvard Business Review
12
Father-Son/Daughter
Rivalry
 Mechanisms
to Resolve Conflict

Succession plan

Third-party intervention

Peacemaker

Wise man/woman in the family

Consultant/lawyer, accountant
13
Rivalries Between Offspring:
the Favorite Son Syndrome
 Father playing off offspring against one another
 An elder Son/daughter not being selected as a
successor
 Ambiguity or uncertainty concerning career path,
promotion and compensation
 An emotional involvement with one of the
offspring, as in Favorite Son Syndrome
 Using age rather than competence as a basis for
promoting or compensating family member.
14
Rivalries Between Offspring:
Mechanisms to Resolve Conflict
Succession plan
CEO intervention
Job descriptions
Introducing professional management
Confrontation meeting
Communication - weekly supper
Restructuring - creating zone of comfort/territories
15
Conflict Between Other
Members of the Family
 Caused
by

Lack of, or unfair succession process

Value differences between generations

Ineffective communication

Unclear definition of roles and responsibilities

Undefined or poorly defined policies on division
of labor, career development and business
procedures
16
Conflict Between Other
Members of the Family
 Mechanisms
to Resolve Conflict

Job descriptions

CEO intervention

Confrontation meeting

Code of conduct

Communication - weekly supper
17
Conflict between Family
and Non-family members
 Initiated
by conflict between family
members
 Nepotism

Son of the boss (SOB) Syndrome
 Non-consultation

in decision-making
The Weekly Family Supper
 Undefined
or poorly defined policies on
division of labor, career development and
business procedures
18
Conflict between Family
and Non-family members
 Mechanisms
to Resolve Conflict

Clear policies concerning career development

Job descriptions

Communications

Introducing professional management
19
Managing Conflict
 Setting
Clear Guidelines

Jurisdiction, compensation, career
development, code of conduct, objectives,
performance assessment criteria

Remove ambiguity

Set clear expectations
20
Managing Conflict
 Managing
confrontation

Face-to-face meetings

One-on-one meetings with CEO/Founder
and employees involved in conflict

Group meetings


Breaking deadlocks
Act early
21
Managing Conflict
 The
CEO/Founder as Chief Arbiter

Avoid enlisting allies in conflict situations

Avoid taking sides in conflict situations

Allow expression of feelings
Set aside time to resolve dispute and reduce
tension
Develop appropriate mechanisms for resolving
conflict
Create a healthy business environment



22
Managing Conflict
 The
Peacemaker

The Family Wise man/woman

A neutral relative
Non-family third party (lawyer, accountant,
family friend)



Helps to reconcile varying points of view
Respected by all parties
23
Managing Conflict
 Communication


The Weekly Family Supper

Relaxed atmosphere

Family members freely express feelings

Discuss working relationships

Share points of view

Resolve personal issues
Other Weekly Meetings to accommodate
non-family members
24
Managing Conflict
 Introducing
Professional Management

Non-family member

Provide objectivity

Encourage professional attitudes in family
members
25
Other Conflict Resolution
Methods
 Expansion

of Resources
avoid win-lose disagreements
 Avoidance

Non-serious problems, provide a cooling off
period
 Smoothing



minimize differences, focus on sharing, provide
reassurance;
not a long-term solution;
serious problems can remain and fester
26
Methods
 Compromise

win-win situations

middle ground over extremes

parties make concessions

may not be the ‘best’ solution
27
Methods
 Forcing

Use of formal or positional authority

Issuing of directives

Win-lose situation

Tendency towards dominance and cohesion

Often creates negative feelings
28
Methods
 Redesigning
the Structure of the Family
Business

Introduce a reporting hierarchy

Separation of roles and responsibilities

Clear delineation of mandates

Definition of jurisdiction and boundaries

Reassignment of conflicting parties
29
Cases
 CONFLICT MANAGEMENT IN
FAMILY
BUSINESSES

Cases:

Northern Construction Inc., p.203 FBM

Questions 9, 24, 70, 77, 85, 86,90 FBAB
30
Question 9
Should a rocky relationship with a child,
parent, sibling while growing up be a
deterrent to entering the business?
It it possible to repair these relationship?
31
Question 24
How does a woman deal with
patronizing behavior, including a lower
salary
32
Question 59
What guidelines can you offer to help
siblings or cousins working together?
33
Question 70
Are there some positive benefits to a
dispute among family members?
What are the best methods of conflict
resolution?
34
Question 77
If trouble brews, should you seek outside
help?
And from whom?
35
Question 85
Can power struggles between siblings
and other family factions create a bad
business climate?
How can such struggles be defused so
they don’t undermine the business?
36
Question 86
How can you handle theft or substance
abuse in a family business?
37
Question 90
 What
are the different types of company
cultures that can exist in a family business
and does it matter for family harmony and
good business ?
 What
can you do to emphasize more, the
culture’s good points and change its
negative ones?
38
Class Schedule Next Week
 SUCCESSION
- SENIOR
GENERATION’S PERSPECTIVE

Reading: Chapter 5

Questions


3, 5, 7, 19, 21, 27-31, 33-35, 52, 75, 76, 80 FBAB
Case:

Baker, Inc. p. 287 FBM
39

MGT 4550 - Family Business Management

Transcription

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