Family Business Conflicts
Family business conflicts are different than other disputes. Not only are business control and management issues in dispute, but the fight is in the context of family relationships. Doug's specialty is working in these types of multi-layered disputes. He has helped bring peace to families in California as they wrestled with conflicts that threatened to destroy their wealth and relatonships.
Classic Issues
Control issues
Fights about control of family business or management are caused by role confusion. iThe natural hierarrchy in a family is parent over child and older sibling over younger sibling. The natural hierarchy in a business is usually CEO over subordinates. These roles can easily be confused. Especially as younger generations come into the business and begin to assert authority, the business hierarchy and family hierarchy may collide.
Business vs. Family Goals
The goals of a family business may be incompatible with the implicit goals of the family. For example, the usual goal of a business is make a profit and provide a return on capital to the owners and investors. Typical family goals may include emotional ties, support, love, respect, and kindness. Founding parents may often want to see that all of the children are supported by the business even though only one or two siblings may be working in the business. This can create intense friction if the business and family goals are not clarified and reconciled.
Performance and Behavior issues
"You Can't Fire Me, I'm Your Father!" is not only the title of a great book by Tom Jones, but also expresses a common theme of family business fights: What to do with underperforming or addicted members in the bueiness? If not dealt with quickly and with great sensitivity, these problems can escalate rapidly.
Compensation issues
Compensation disagreements arise in family businesses when the owners lack clarity about business and family goals. In a family feud over money, the members working in the business may believe they are entitled to market rate compensation. Other members may not agree and may insist that everyone receive equal distributions from the business. The essential problem is one of justice based on equity, equality, and need. These three justice interests must be in balance for there to be a sense of fairness in compensation.
Ownership issues
Ownership issues are often generational. How long will Mom and Dad hold onto the business before turning it over the children? For Mom and Dad, the bueiness may represent their life's work, security, the meaning of their liife, and substantially all of their wealth. For the kids, the business may mean their future and the future of their own families. The tension in ownership and succession can result in emotional disputes.
Buy-outs
Sometimes the family is more important than the business. When members simply cannot get along in the business despite their best efforts, one side may have to buy out the other. This is an emotional situation because the selling side will always see more value in the business than those who remain. The problem is complicated by mistrust and a sense of betrayal which almost always underlies these types of conflicts.
Fiduciary claims
Managing owners sometimes fall into the trap of believing the business is theirs. Consequently, outside family members can easily believe that, right or wrong, the managing owners are cheating and defrauding them.
Doug Noll, based in central California, serves all of California with his family business mediation and peacemakng practice. He has dealt with each of the issues above dozens of times and brings his experience as a lawyer turned peacemaker to each family that he serves.
For more information on family disputes similar to family business conflicts, follow the link.
What People Say...
"You will be pleased to know that we had our annual meeting in November. We followed all of the techniques you taught us. We have never had a more productive family owner meeting. And we all had dinner together afterwards. Thanks, Peacemaker! " C.N.
Articles by Doug Noll of interest on elder care and abuse: