The research was adapted to illustrate the relevant relationship between business conflict and independent variable; family dynamics, work and relationship role as potential factors for conflict in family business. The three-circle model was used for data analysis and the type of Thai family business structure was used for describing sources and characteristics of conflict. As in every other company, the family business also faces an issue of ownership change when the parents have to decide whether they want to continue to be involved, or step down to allow a successor to inherit or take over the business.
Stern (2006) explained that family businesses function as a hierarchy; parents have the responsibility to provide facilities for the family and maintain its survival, however the business may not always be profitable. The family business must adequately deal with these issues to stabilize the company during the ownership transition period. Therefore, timely conflict management is essential for any family business operation, especially since friction has a negative impact on the workplace.
Family businesses are the foundation of the Thai economy (Thornton, 2002). Usually they will face management problems caused by conflicts from within the family or the business system. Disputes within family businesses therefore need a quick solution; the source of the problem must be identified quickly so that successors and owners can work together. If this is achieved efficiently, it will not only help prevent disputes in family businesses, but also strengthen family relationships.
LITERATURE REVIEW
- Definitions
- The definition of the family business
- Conflict in the family business
- Conflict in the family business environment
- The family business structure
- The three-circle model
- Level of conflict in the three-circle model
- Related factors of conflict in the family business environment
- Work role
- Relationship role
- Family dynamics
- Thai family business structure
- Categories of Thai family business .1 Closed family business
A family business owner may conflict with other family members, for example, the owner usually wants to maintain family ownership, but the successor may think differently (Beckhard & Dyer, 1983). Sometimes this is also related to the external environment, for example the owner brings non-family members into the company (Kets de Vries, 1993). Identity conflict is related to the need of family members to differentiate themselves and fulfill family expectations.
Usually, non-family members work in the business cycle, but sometimes family members are also included. The ownership subsystem, sections 2, 4, 5 and 7 refer to persons who own the business, which can be both family members and non-family members. They can be anyone who works in the business system and do not have to be family members or owners of the business.
Those who work in the business system as they acquire a valuable part of the company will be placed in section 6 (Srisomburananont, 2004). Another example of level 2 conflict would be if the children of the family did not have the respect of the employees, manager or other family members who work in the business. Relationship conflicts are also associated with socio-emotional issues, created as a result of disagreements between family members and not directly linked to job performance (Jehn, 1995).
Many researchers have shown that the negative outcome associated with relationship conflict, such as low productivity or dissatisfaction among family members, is detrimental to family businesses and work performance (Higashide & Birley, 2002). The succession of a company founder can cause conflicts; although family members see the necessity of the transition, current employees still refuse to let go (Wakefield, 1995). They rarely hire non-family members for the top job and usually ask other family members to share ownership when a new division is established.
This can lead to a lack of motivation for foreigners working in the family business, while family members are favored and encouraged to attend long-term training. In the modern family conglomerate, the founder and family members still dominate ownership positions and control critical management strategies, but there are opportunities for professional managers both in top management positions and on the company's board of directors (Wailerdsak, 2002).
RESEARCH METHODOLOGY
- Research design
- Sampling
- Data collection
- Research questions
- Leading questions
- Work role
- Relationship role
- Family dynamics
Family dynamics included number of siblings, founder succession, and three types of problems; the owner's difficulty in letting go, the ability of the next generation to maintain and manage the business, and the balance between work and conflict during the transition period. As family members and co-workers, they could accurately reflect the perspective of the conflict and provide information that could pinpoint areas of conflict. The criterion was that family businesses must have been in business for at least one year, and the owners or supervisors must work in day-to-day business with ongoing management, including joint work and cooperation with successors.
RESEARCH FINDINGS
- Work Role: Different perspective in working styles
- Relationship versus technology
- Leadership styles of owner
- Assessing conflict: different perspectives in working styles
- Relationship Role: Confusion between relationship and business role
- Assessing conflicts: confusion between relationships and business roles
- Family Dynamic: Influence of family dynamics
- Assessing conflicts: influence of family dynamics
- Discussion
- Common values and belief
- Command
- Communication
- Commitment
- Financial control
- Role clarity
Their answers show that they believe that the survival of a family business depends on maintaining a strong relationship between the company and the customer. Thus, the transmission of these values to the next generation was a key factor in the survival of the family business, and it was the responsibility of the owners to pass this information on to their children. Conflict will arise when owners attempt to transfer the value and belief of the family business to the next generation, which includes business relationships, experience, and commitment to the family business (Tagiuri & Davis, 1982).
I want my son to get to know the family business better and keep in touch with the customers,” owner of a textile manufacturer. They can only truly act like successors if they can bring about change based on their values and belief in the family business. These can lead to greater problems in the family business transition process due to characteristics that are deeply ingrained in family members.
In general, the role of successors in the family business is determined by the parents or owners. For example, one of the owners allowed her son to handle all the operations of the family business while she worked only in the financial management section. He worked hard every day to strengthen the family business as a successor and as a son.
The financial resources are the heart of the family business's operations; this determines the status of the family members. Disagreements usually arise when owners and successors have different approaches and ideas towards running the family business. The family business is based on a strong belief, recognition and acceptance of something, combined with a strategy and trust to achieve this.
The owner's leadership style affects the attitude of the successor working in the family business. Conflict can arise if the successor lacks the interest in inheriting the family business as the owner expected. Conflict arises when owners place successors in senior positions, but without responsibility for the financial management of the family business.
They will lack self-confidence and have difficulty working in the family business in the future.
CONCLUSIONS
- Conclusions
- Recommendations
- Create fairness in family business
- Provide essential training for successor
- Open and clear communication
- Slow transition process
- Limitations of the research
- Suggestions for further research
This can cause problems when there are power struggles between family members in the business system. Parents are still uncertain about their children's ability to run the family business; they do not discuss the future direction of the company. These conflicts not only affect the business system, but can also destroy relationships between family members.
Identifying conflicts in the family business can help prevent future damage. Typically, family business management and decision-making is dominated by the owners or those in senior positions. They rarely share ideas or explain the reasons for their decision-making with other family members.
To minimize conflicts it is essential to identify the objectives and understand what is crucial for the family business. Family members should accept that conflicts happen in the company and discuss their expectations with each other, rather than writing or complaining to strangers about problems. The model recommends that owners who authorize their children to inherit the family business should name them as successors.
It is difficult to change a family leader; however, it is a necessary procedure to contribute family value and belief, and transfer knowledge to strengthen the family business. Communication between family members should be created out of respect and trust, rather than being driven by emotions when business differences arise. The transfer of a family business to the next generation is a difficult management topic that every business owner faces.
There are other factors and variables related to family relationships and businesses that need to be further discussed in future research, as conflicts in a family business cannot be separated from each other. In addition, a larger survey sample would increase the opportunity to find significant differences between conflicts in each family business.
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