Content area
Full Text
ABSTRACT
All to often, conflict is feared by managers because they only focus on the negative effects of such discord in business. But conflict may be a natural state within family businesses, and if managed properly and directed by family members, it can provide the impetus for change and innovation. This unique application of functional conflict in a family business context provides the family business with a core competency lacking in many publicly held organizations.
INTRODUCTION
There are a variety of definitions of conflict but most incorporate the elements of a difference in interests, a difference in perspective, and a difference in goals and/or objectives. For our purposes, conflict may be said to exist when there are real or perceived differences which arise in organizational circumstances and which engender emotion and stress as a consequence (Kolb & Putnam, 1992). Conflict may occur in the family business environment between family units, within family units, and among different generations within a family unit (see Exhibit One). Different generations may experience conflict relative to business issues such as succession planning, management style, and the like. The family system and the business system interlock to form a third system, the family business. Therefore, when attempting to resolve conflict, advisors must focus not only on the elements in the family business area but also the dynamics that underpin all three systems: the individual, the family, and the business stages of development (Bork, Jaffe, Lane, Dashaw, & Heisler, 1996).
The objectives of the article are (1) to examine the potential impact (i.e., positive and negative) of conflict on family business; (2) to explore means to resolve dysfunctional conflict in family business; (3) to understand how to introduce and manage conflict in family business; and (4) to examine the latent boundaries to positive conflict intervention. Each of these issues will be explored in the subsequent sections of the article.
View One: Assumes Conflict to Be Dysfunctional
There has been voluminous research conducted on conflict and several literature reviews on the topic are especially noteworthy (Pondy, 1967; Putnam & Poole, 1987; Wall & Callister, 1995). The study of conflict has been examined from five approaches. Economic analysis attempts to understand complex human decision making by applying economic theory. It focuses on...