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Family Business Conflicts – Lawful Resolutions and Strategies

Owning a business and transforming it into a success is hard, and it can be even harder in a family business. According to the Harvard Business Review, around 70 percent of family businesses fail or get sold out at the second level. Protecting work relationships in a family business is a necessity as opposed to a luxury as in other businesses.

Differences and Disagreements

Disagreements and conflicts are two terms that actually have their own definitions in the world of family business. Disagreements are when two or more parties have different sets of facts, different perceptions, beliefs and expectations concerning different facets of the business. A conflict is when one or more disagreements reach a critical level, and at least two people involved feel they have a mutually exclusive position. Conflicts end family businesses, and they can either be prevented or dealt with through lawful resolutions to save the business.

Creating a Strategy to Help Prevent Conflict

According to the Family Business Institute, which is an authority on conflict resolution for family businesses, there are several strategies successful, low-conflict families use to prevent frequent conflicts and conflicts from becoming serious. Professionals, like those at Alternative Law, realize that many issues can show themselves when running a family business. Constant, open communication can help mitigate this. Although it may seem far-fetched, or even corny, families with successful businesses and relationships simultaneously often do family retreats to reconnect with one another and strengthen bonds. Since there are a high number of conflicts reported on weekly basis in polls among family businesses, one strategy the successful families use is mandatory, business-formal meetings. The meeting is scheduled weekly, and family members discuss issues constructively. Constructive and civil discussions about disagreements is how to prevent conflicts.

Use a Legal Mediator

Using a mediator is better than going to court to sue a family member over something business-related, which boils down to money over family. Mediators can help dissolve a business or resolve a legal matter privately, quickly and inexpensively. They are also good at salvaging a business, and are legal experts in conflict resolution. A neutral party directing energy toward solutions and common ground is invaluable, and it makes mediation worth every penny.

It is better to practice some sort of conflict resolution, and be open about problems and concerns. Masking problems and putting off, or even flat-out denying, inevitable conflicts is a perfect way to bankrupt a family business. Take prevention tip classes, classes on conflict resolution in business and develop a skill set necessary to make the business more successful.

Author information: Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter: @RachelleWilber.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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