Family and Business operate under different cultural systems -while Family is protective, Business is competitive. This can create a friction between the two systems particularly when the Business expands and becomes successful. This is where the impact of having a Family Constitution can be significant. Many successful business families have recognized this and created a constitution to overcome the tension between the two systems.
Families who run large businesses are often too busy to deal with "softer" issues such as communication and management of the Family involved in the Business as it is considered less important than the day-to-day running of the Business. However, the death of the Founder or a major disagreement could lead to a situation where Family would be forced to opt for a constitution. It may be simply too late.
The best time to embark on a constitution is precisely when the need for one is not felt. In other words, a constitution should be framed in a harmonious and peaceful environment when there is little or no conflict.
This will provide the opportunity to make objective decisions and ensure that rules and procedures are in place. Although the Constitution is not legally binding, it can gain such moral weight over time that it is unlikely to be questioned or contradicted.
Family Constitution cannot prevent conflict; however, the successful development of one can often result in better communication and greater harmony within the Family. It can ensure success of the Business and survival for future generations. Without a Constitution, many issues could be overlooked or important questions