Family Business Conflicts : Impact on Family Climate, Psychological Stress and Business Performance
Margaret, Meenu Mary
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Family businesses are an important institution in any economy, as they contribute to the economic development of the nation, provide employment and support the needs of the society. Unresolved conflicts in a family business can hamper the economic growth, bring distress to the family and the people employed in the family business. Studies on conflicts have been a fascinating area for researchers.Studies on conflict range from intrapersonal to interpersonal, among nations, among trade unions and even among different interest groups. What is more alluring is to study conflicts in a family business, for they exhibit a uniqueinteraction among blood relations working together in a commercialenterprise. In the Indian context, understanding of conflicts is minimalas they are either ignored or suppressed. Its prominence is seen only atthe last phase when conflicts are manifested openly leading to disruption.There is a need to study conflicts in initial and middle phases in order to avert suchhuge losses. In this study the main methods included were chronological development of conflicts through case studies and cross sectional survey of 90 family businesses. System’s theory was used to study the nature of conflicts in family business. The family and business features were included in the study to provide a better understanding of conflict in family businesses. Studies have identified different conflicts like succession conflict, relationship conflict, work-family conflict and others. These studies have focused on uni dimensional or two dimensional perspective of conflicts. Conflicts do not occur in isolation and thus there was a need for a multi-dimensional perspective on conflicts in family business.This would in turn ensure better conflict management and resolution techniques. The multi-dimensional model included individual, familyand business characteristics to study their influence on different conflicts in family business. The model also examined how conflicts impact the individual, family and business at different levels. Thus variableslike family climate, psychological stress and business performance were included. There were six major conflicts relevant to family business that were identified and studied. They were, succession management and planning conflict, relationship conflict, process conflict, role conflict and work family conflict.To capture the different conflicts, the Family Business Issues (FBI) scale was developed. It was found that family business owners experienced different types of conflicts in varying degrees. The majorcontributions of the study are the development and standardization of ameasure called Family Business Issues Scale.This is useful to identify the areas that require attention with respect to conflict management for family businesses.It canbe used as a screening tool by consultants and practitioners working with family businesses. Family Business Performance questionnaire was constructed to capture the perceived business performance of the family businesses. Perceived Stress Scale, a standardized measure was used to capture the psychological stress among family business owners. These measures were used to capture the variables under study. Regression models werebuilt to test the hypothesis. Results of the survey were compared with descriptive longitudinal case studies. Triangulation of data from the empirical study from90 family business respondents and 4 case studies led to better understanding of nature and growth of conflicts.The results suggest that conflicts in family business occur in varying degrees, they work in a combination with family, business and individual characteristics. The sector of business, family type, type of business and generation do play significant roles in combination with conflicts to impact the family and business. The study highlights the strong influence the family systemsand business systems have on each other.The findings of the study can be a guide to researchers,theorists and consultants. The thesis proceeds in the following order, chapter one provides introduction to the concepts referred to in the study. Chapter two provides review of literature on conflicts in family business, types of conflicts, its impact on the individual, family and business. Chapter three explains the objectives, conceptual model, methodology, sample description, hypothesis developed for the study. Chapter four provides details about conflicts in family business and its antecedents and discusses ANOVA and Tukey’s results for the variables under study. It also provides information about questionnaire development and factor analysis results. Chapter five explains the regression models built to test the impact of family business conflicts on psychological stress, family climate and business performance.Chapter six provides details of the in depth case studies of four family business owners, themes that emerged, triangulation of results using the survey and case studies. Chapter seven deals with conclusions, suggestions, limitations and scope for future study. Implications of this study for research and practice are also discussed.
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