While business in general has conflicts, Family Business has even more. This is because Family dynamics plays an important role in Family Business.
Here are some of the underlying causes of conflicts in Family Business:
Clear definition of the two systems: There are two systems in Family Business - the Family system and the Business system. Conflicts arise when the role of one system is carried to the other system. Well-defined boundaries demarcating the two systems would help minimize conflict. Clear definition of the role and responsibility of the two systems as well as the role of each person in Family would be highly favorable.
Sibling and other rivalries: Unresolved conflict between Family Members can manifest as major conflicts in the Business, where the stakes are even higher.
Conflict avoidance and other dysfunction: Many families continue to live in denial as they have no clear understanding of conflict, its development and resolution. Unresolved issues must be addressed effectively as they are likely to recur again if unaddressed.
Identifying the ideal conflict resolution model: Not all conflicts can be resolved in the same way. The Family Business model should be dynamic enough to identify and apply the most effective conflict resolution model.
Family conflicts are painful. When it occurs in a Family Business it can impact the bottom line of the Business as well. Consistent and deliberate efforts should be directed to eliminate conflicts and prevent recurrence.