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Conflict between Family Firms - Essay Example

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When family firms or businesses are formed, they are usually expressions of an entrepreneur's need for independence (Ward 1994). Family firms are often formed without the purpose of strictly remaining as family businesses, and usually family issues only start to arise when other family members, or just anyone from the family, enter the business on a permanent basis (Hoy and Verser 1994)…
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Conflict between Family Firms
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Download file to see previous pages 1985). The founders tend to manage and supervise dissent, allowing very little contribution from others in the decision making process (Dyer 1986). It is this tension among family business partners and unequal business partners that leads to conflict. When one partner believes he/she had the lead position in forming the roots of the business, he/she may anticipate more of his/her time to be allocated to the job role.
"Family businesses are unique institutions in the socioeconomic environment of the United States. Family businesses, whether large or small, are characterized by having the founder or a family member as president or chief executive officer, members of the founder's family employed by the company, and managers defining their firm as a family business." (Davis and Harveston, 2001)
Those who play down the impact of family firms may not be aware that family businesses comprise an estimated 80 percent of the 15 million businesses in the U.K. (Carsrud 1994) and represent more than 50 percent of Britian's GDP (McCann, Leon-CJuerrero, and Haley 1997). Despite their importance in the Britian economy, family businesses have a complex set of problems not completely addressed by classical management theory (Davies and Stern 1980). One such problem is the effect of conflict in the family.
"When examining intraorganizational conflict, a central issue is determining the foci of conflict. Conflict theorists (such as Guetzkow and Gyr 1994; Ross 2001; Wall and Nolan 1986) typically describe conflict as either substantive, consisting of task disagreements, or affective, consisting of emotionally-charged interpersonal clashes characterized by anger, distrust, frustration, and other forms of negative affect. Because our focus is f) in the investigation of conflict concerning the business, the model developed here focuses on substantive conflict which describe as "intellectual opposition among participants, deriving from the content of the agenda". (Davis and Harveston, 2001)
"That is, substantive conflict arises from disagreements about task issues including the nature and importance of task goals and such key decisions as procedures for task accomplishment, and the appropriate choice for action" As used here, the existence of "substantive conflict is defined as the owner/manager's perception that there are disagreements about task issues including the nature and importance of goals and decision areas". (Davis and Harveston, 2001)
"Beckhard and Dyer (1983) have "suggested that the key substantive issues that leaders of family business should address are (Ownership and executive leadership continuity or change, power and asset distribution, and the role of the firm in society". Luce and Raiffa (1957, p. 1) characterize substantive or issue-based conflict as situations in which "an individual is in a situation from which one of several possible outcomes will result and with respect to which he has certain personal preferences. However, though he may have some control over the variables that determine the ...Download file to see next pagesRead More
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