Conflict resolution

Family businesses differ from non-family businesses due to the presence of the family as major owners in the family enterprise, and their specific style of involvement in managing the business. With family ownership comes the family’s desire to sustain the business for generations. At the same time, however, the family includes many family members who might not have shared values that unify them under one mission, family owners who might have different views about the decisions they need to make as an owner group, and family manager in the business who might not be aligned with other non-active owners. In many cases, clear family protocols to guide family members around the areas in which they hold different views is missing. On top of that, the deep-rooted family ties involve a lot of emotions around the family and the business which could further complicate disagreements. Thus, the presence of an ungoverned family in the business creates an inherent risk of family conflicts and feuds, which is the main challenge to achieve the sustainability objective of family enterprises.

Many of us have heard stories of business empires that collapsed due to family feuds over the business. This makes conflict one of the greatest concerns that business families have. Conflict is indeed one of the most important challenges to understand in order for business families to protect against its destructive effects.

While it is a critical topic, there has not been enough available and applicable content, especially in the MENA region, to help business families detect conflict at a deeper level and find ways to prevent and manage it. Much of what we observe about family business conflicts in is that conflicts are inevitable, especially as family enterprises transition to the third generation. Conflict is often described as risky and destructive, and that one of the best approaches to manage conflict in business families is through agreeing on governance protocols for the family and the business. Indeed, many of these ideas hold true to a great extent. However, the topic of conflict is wider and deeper.

We hope that by exploring business family conflict in greater depth, we will help business families change how they think about conflict and find ways to prevent and manage it. To this end, we have embarked on a research project about family business conflict in Saudi Arabia to build greater understanding of the topic with the objective of providing deeper insights that could contribute to the understanding and management of conflict in business families in our region.