The Top 9 Reasons for Conflict in a Family Business

Updated: Oct 17, 2020

Conflict in a Family-Owned Business
9 Reasons for Family Business Conflict

Family Business Conflict

For any of you that are part of a family-owned business, or are close friends with someone who is, it will come as no surprise that conflict often exists within a family business.

Conflict in a business family can manifest itself in many ways, from family members simply disagreeing with each other, to all out warfare. And everything in between.

While both the manner and degree that conflict happens in a family business varies, the consequences of conflict are always harmful to the family business. And more importantly, to the family unit.

To help prevent conflict from creeping into your family business, or to minimize its negative affect, here are the 9 top reasons that create conflict in a family business.

Once you know what causes conflict, you can take action to prevent these things from happening in your family business.

Family business conflict and resolution

1. Succession Planning

Or should I say the lack of Succession Planning.

This is the number one cause of conflict in business families. 

While some causes of family conflict are difficult to change or avoid, the conflict created by not having a Succession Plan is almost always preventable.

Business owners will often make a conscious decision to avoid dealing with Succession Planning because they don’t want to create any conflict between family members. 

The truth is, that by not addressing the one thing that everyone is worried about (their future and the future of the family business), business owners are actually creating an environment that is ripe for uncertainty and tension.

And we know that uncertainty and tension breed conflict.

The lack of clarity on everyone’s future and the future of the family business only serves to make any existing conflict worse. So it is always advisable to address the question of family business succession.

2. Poor Communication

Business families struggle to talk about the tough stuff. 

Important matters like wages, succession and death never see the light of day. While the score from last night’s football game or the latest episode of Game of Thrones is a hot topic of discussion.

Families know that they should communicate about the things that they care deeply about, but they just don’t know how to get those difficult conversations started.

As a result, the issues that are really important to family members are not discussed or resolved. So conflict simmers below the surface.

And sometimes conflict rises to the top when someone becomes so frustrated that communication isn’t happening to the degree that they need.

In addition, the differing communication styles in a family add to the complexity of communicating effectively.

One person is straight forward and blunt, while another is a peace maker and reluctant to share their thoughts.

Differing communication styles frequently leads to conflict.

3. Personality Differences

This won’t come as a shock.

Members of the same family are different.

Family members frequently have different personalities, priorities, values and behaviours.

These difference are often apparent in the family setting, but can become more apparent and problematic in a business setting.

If family members struggle to get along as parent and child, as siblings, or in any other form of family relationship, it is unlikely that they will get along in a business setting either.  

Business families assume that because we are family, these personality differences will be okay or sort themselves out on their own.

But without a clear strategy to address and mitigate personality differences between family members within a family business, the differences tend to intensify overtime as the demands of the business begin to place pressure on an already challenging family relationship.

4. Control / Power

A big attraction for most of us in becoming a business owner is so we can control our own destiny and have the power to make the decisions that affect us most.

Family business is no exception.

Families are filled with strong-willed and opinionated people. And in family-business, traits like these are even more common.

To face the many challenges of business, one has to be strong-willed and often tough.

So it’s no wonder that family members wrestle for control. 

Dad wants to lead and make all of the decisions, while the eldest child wants to exert their will and take the business in a different direction.

Having control is a good thing, it provides freedom and independence. 

But fighting over control can be devastating to the family business.

5. Money

I bet you expected money to top the list at #1. 

In my experience, money is a common source of conflict, but it’s rarely the most important factor.

But let’s face it, money is important. Every family member needs it and so does the business.

When monetary needs or expectations of one person begin to dominate the needs of others, conflict arises.

When a family members monetary needs take priority over the financial needs of the business, conflict happens.

Or when one sibling is getting paid more than another sibling, hard feelings begin to develop.

Talking about, and agreeing on monetary and financial issues is an important step to minimizing conflict within the business family.

6. Family Roles versus Business Roles

There is a natural conflict and tension that exists within the business family.

And this natural conflict is the competing interest of what the family needs and what the business needs.

A family is based on love, acceptance and relationship.

A business is based on getting things done and making a profit.

While everyone has value in a family because of the common bond that is shared, value in a business setting is entirely different. In business, value is based on what we add to the business in the form of skills, qualifications and experience that we bring to the table as employees.

So you can see how this creates a problem.

For instance, at home, dad is the caring father that gently guides and encourages his adult kids. But at work, he’s a focused manager that works hard and expects everyone to do the same.

This naturally occurring conflict can be minimized by setting ground rules on how the family and business will co-exist.

7. Poorly Defined Roles and Responsibilities

In a family, roles are often fairly clear. Mom and dad go to work every day. Son and daughter attend school and do their chores when they get home.

The biggest issue may be who unloads the dishwasher.

In families, we all basically know what we are supposed to do. And often, we are held accountable to do it.

Problems arise when business families fail to clarify roles and responsibilities for each family member working in the business. 

Again, for some reason, we assume that because we are family, we will all work together and figure it out. In the end, the work will get done.

What ends up happening is one family member begins to feel that they are doing someone else’s job and hard feelings begin to build. Or one family member thinks that mom and dad (the boss) aren’t holding a sibling accountable for their work performance.

I always say, “There is Safety in Structure.”

It’s the same reason we have a yellow line down the middle of the highway. We need to know where our lane is so we don’t get hurt or create an accident.

8. Undefined and Unmet Expectations

This happens all the time.

A family member is brought into the family business and everyone has expectations on how it will go. The problem is, no one takes the time to communicate and talk about their expectations.

So in a short while, someone begins to feel that their expectations aren’t being met.

For instance, Dad may think, “Wow, I thought Junior would put in the extra effort and work weekends with me.”


Junior may think, “I thought dad brought me in to help run this business, but all I do is take instructions from everyone.”

Unmet expectations on either side leads to disappointment, disillusionment and frustration.

9. Sibling Rivalry

If the only cause of conflict a family business has is that two or more siblings have a competitive streak and compete against one another to be good at what they do, I don’t see that as a significant cause for conflict in and of itself.

It’s when this natural rivalry is fueled by one or more of the other factors on this list that sibling rivalry becomes a real problem.

Take for instance the matter of succession. Who is going to take over the family business? Mom and dad have two kids who both work in the business and who both want to own the business one day. But mom and dad haven’t really dealt with the issues of succession and future ownership.

So the siblings, unintentionally are pitched against each other in a battel to win mom and dad’s favor so that they get the business or the CEO chair.

When left unchecked, sibling rivalry can become so intense that it destroys the relationship between siblings and harms the stability of the business.

In Closing

If you are part of a family business that is experiencing conflict, believe me, you’re not alone.

Please use our Contact Form if you would like to talk about your family business.



 About the Author: Chris Hall is a champion of family business and helps family businesses achieve success and profitability in their business and peace and harmony in their family.

Visit: www.abbusinessbuilders.ca for more information that can help you and your family business.

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#familybusiness #familybusinesssuccessionplanning #familybusinessconflict #conflictresolution #successionplanning

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