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Family Business Dynamics

Posted October 30th, 2008 by Spike

A family run business has an added dynamic to it that can make or break the owners. The dynamics of personal and professional issues combined create an added pressure which can hinder good business decisions. Unresolved family conflicts may be carried into the workplace and impact the motivation and productivity of everyone involved.

I have current experience of managing a family business with my web design business, and we have found there are some important issues that need resolving before even embarking on that road. It is important to realise managing any business in today’s environment is not simple, so when difficult decisions need to be made to ensure the survival and the success of the business then those decisions must stand even if it affects the harmonious relationship at home.

Leadership
The first issue is one of leadership. There has to be a leader whom everyone should be able to respect and who is capable of making sound business decisions.

There are different styles of leadership:-

The Autocratic Ruler – This sometimes works as long as the rest of the family are willing to do what he wants. But long term I don’t think the autocratic ruler is good for business.

The Democratic Ruler – Will encourage each individual to speak about their area of responsibility in order to establish the necessary and relevant information on which to base sound business decisions. Discussion and argument, chewing over the policies I see as healthy and necessary to arrive at agreed actions for the good of the business.

Conflict Resolution
Family businesses can be a minefield of unresolved conflict and resentment. It is important that you have a way of dealing with conflict that is healthy before you even contemplate working together as a family. When we first set up together in our business which provides CMS systems we made an agreement that if we were not happy with some behaviour or something that was said, then we would say how we feel and give the other person an opportunity to change. The important thing is for us to listen to each other and respect the other person’s point of view.

Attitudes and Values
Being part of a family business, for the most part, the attitudes and values are shared. In a regular company there are many diverse attitudes and values which generate tensions when working together. Listening and understanding each other is Key to good working relationships. One of the benefits of having a family business is intuitively knowing the other members and being able to trust them with your life if necessary. Even if there are disagreements you will know exactly the integrity and reliability of each individual. (Or not as the case may be!)

Inheritance
It may be important to tackle the issue of succession in the business especially if the owner of the business has more than one child. In many cases it is inevitable the children will fight over the inheritance of the business if it has not been made clear who will inherit. To avoid these kinds of situations may just be a matter of planning. Having a defined succession guide will enable all the children to live harmoniously with one another while helping the business success.

Conclusion
Even if all the members of the family do succeed in having a healthy business relationship, it is still good idea to separate business from personal matters. This allows the business owner to make decisions with less bias and more flexibility for the betterment of the business. Also other family members may have exposure to a greater variety of ideas, which they can then bring to the workplace. Probably the most important thing in managing a family business properly though, is ensuring that the whole family will have a good relationship that will last even if the business doesn’t. Ultimately, blood is thicker than water and family is more important because the business can be replaced but your family cannot. One great example of a successful designer lingerie family business is Under Wraps.

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