family business tensions as they affect business viability sharon m. danes, professor university of...
TRANSCRIPT
Family Business Tensions as They Affect Business Viability
Sharon M. Danes, ProfessorUniversity of Minnesota
Department of Family Social Science
Why study tension and its impact on family business?
• Tolerance of conflict can foster a social climate that allows individuals to express and test themselves as well as establish
their identities (Busby, 1977).
• Too much or destructive conflict can detract from providing and communicating clear goals for a family business (Kaye, 1991).
• Family businesses can benefit from constructive conflict but there is a threshold at which conflict is no longer beneficial (Ward, 1987).
What literature indicates
• Family and business goals differ among family businesses• Family businesses can be lost through destructive levels of
tension between family and business goals
• A strong business calls for open communication about goals and a desire to resolve misunderstandings
Family Businesses Conflict: Distinct from other conflict contexts
• Family members are often fighting about deeper issues than it appears on the surface
• Reasons for sustaining conflict are often stronger than desire to solve it
• Issues are circular or systemic, not linear with a cause and effect
• Conflict follows a dynamic pattern
Content of Family Business Conflicts
• Justice Conflict
• Work-Family Conflict
• Role Conflict
• Identity Conflict
• Succession Conflict
Sample• Nationally representative sample of family
businesses
• Subset of businesses with data from business and household managers
• Primarily male business managers and female household managers
Initial Findings on Tensions & Goal Achievement
• Overall, household manager had higher levels of tension than business managers
• Highest level of tension by both managers was unfair workloads, followed by resource competition between family & business
• Household managers also indicated greater level of success in achieving most important goal identified
Predicting Business Tensions & Achievement of Goals
• When family health (APGAR) is good, tensions are low for both managers
• The higher the total level of tension, the less success in achieving business goals
Household Manager’s Work Decision Status
No YesNo 38% 20% 58%
Yes 6% 37% 43%44% 57%
Decision Maker in
the Business?
Work in the Business?
Table 2. Household's Manager's Work Decision Status
Household Manager’s Work Decision Status Tension Sources
• For those who have decision-making responsibility in the business, they have higher tension levels in:
– lack of role clarity– confusion over authority– issues over unequal ownership
Work Decision Status Impacts Tension Levels
• Those who are decision makers in the business, but do not work in the business, are more likely to have higher tension levels than those who do not work in either arena
• Potential for “crazy-making” ?
• For this group, tensions are higher:– competition for resources– confusion over authority
And interestingly enough...
• The business manager who reports having a spouse (household manager) who shares in the decision making - reports the same higher levels of tension in:
– lack of role clarity– confusion over authority
Farm Family Businesses Differ from Service and Sales Businesses
Lack of role clarity
Confusion over authority
Unequal ownership
Competition for resources between family and business
Mutual Gains Mutual Gains
Negotiating:Negotiating:
an attempt to get people to synthesize aims rather than
enter into win-lose competitiveness
Mutual Gains NegotiatingMutual Gains Negotiating
Competitive• Win as much as
possible through negotiation/demand/ claiming
Mutual gains• Provide a process for
parties to reach creative mutual gains agreements
Mutual Gains NegotiatingMutual Gains NegotiatingCompetitive
• Win as much as possible through negotiation/
demand/claiming• Competitive, suspicious,
closed• Win – Lose
Mutual gains• Provide a process for
parties to reach creative mutual gains agreements
• Cooperative, trusting, open• Win - Win
Mutual Gains NegotiatingMutual Gains NegotiatingCompetitive
Each party:
• Defines their positions • Establishes bottom line
demands
• Negotiates with other parties
• changes demands, surrenders, threatens
• Agrees or withdraws
Mutual gains
Each party:• Seeks to identify interests of
all parties• Defines their common goals• Identifies problems and
constraints• Generates a range of
alternatives• Works toward agreements
acceptable to all parties
• Focus on INTERESTS Not Focus on INTERESTS Not PositionsPositions
• Separate the People Issues from Separate the People Issues from the Contextual Issuesthe Contextual Issues
• Invent Options for Mutual GainInvent Options for Mutual Gain
• Insist on Using Objective CriteriaInsist on Using Objective Criteria
Jones’Jones’ Vacation-- INTERESTSINTERESTS
Joan
• Need a rest• Need time with Bill• Swimming/Sunbathing• Sandy beach, salt
water smell and ocean beach dining
Bill
• Need a break• Time with Joan• Fishing and hiking• Mountains - tradition
and views
Focus on INTERESTSINTERESTS--Not Positions
• Work to understand other parties interests -- listen and be empathetic.
• Discuss your own interests openly and candidly.
• Commit to meeting other parties interests.
• Must change the way you act!