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Brain Circuits
How to identify conflict in your family firm
As in any conflict resolution, tackling problems in family firms begins by identifying where the problem originates and its precise nature. Go through the questions below to analyze where things are going wrong.
Q1. Who are the conflicting parties?
- Dyadic – conflict stemming from a conflict between two people, such as siblings, a family member and a non-family member, or two non-family members.
- Intragroup – disputes within the same group or team, such as within a particular department or among majority shareholders.
- Intergroup – conflict between two different groups (in family firms, this might mean majority and minority shareholders).
Q2. What type of conflict is at play?
- Relationship breakdown
Relationship conflict refers primarily to interpersonal incompatibilities and often leads to negative emotions, such as suspicion, annoyance, worry, and anger. It also fosters perceptions of interpersonal resentment, aversion, and hostility.
- Task or process-driven
This denotes disagreement about the content of the tasks being performed or the processes used to perform a task, including different viewpoints, ideas, and opinions. In contrast to relationship breakdown, this type of conflict can be beneficial, as it can improve decision-making by generating new insights and diverse perspectives.
Q3. Where does the conflict take place?
- Family level
- Generational
- Board or Top Management Team (TMT) level
- Organizational
This distinction is particularly valuable because it identifies where conflict occurs while considering the unique context in family firms. For example, a task conflict between two family members may occur during a board meeting, while a conflict originating in the family domain may manifest not only in the workplace but also in more personal settings, such as the home.
Q4. Why? (motives)
Understanding the “why” of a conflict is about uncovering its underlying motives or causes. This is critical to improving your ability to manage and prevent destructive arguments while fostering productive discussion.
Q5. When does the conflict escalate, and how does it change over time?
Conflict is not static. It evolves through processes that can lead to escalation, spillover effects, or eventual resolution. This evolution is often triggered by significant events such as children reaching adulthood and the complexity of the succession process. Conflict may also shift from one situation to another; for example, a conflict that begins at home may be brought into the business due to family dynamics.
Key learning
To resolve conflict in family firms, you first need to identify the root cause and nature of the problem before you can stage interventions to prevent the situation from escalating and manage the conflict successfully.
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