Thursday, 25 October 2012

How Families Affect The Business

Wednesday 21 February, 2001
Workplace structures affect family life in a number of ways and vice-versa.
Almost 20 years ago, it was argued that the influence of the workplace on family life can be heightened when roles are similar across work and family domains. This situation is particularly characteristic of family businesses where the politics of the firm can be inseparable from the politics of the family.


Many family business owners indicate that their business interferes with meeting family and household obligations. Business life can also impact on family and social relationships. Recently, commentators have highlighted how work and the rest of life are entwined and can spill over into each other. A 1999 survey undertaken by the AXA Australia Family Business Research Unit supports these findings. More than 40% of owners report the negative effects of the business on their relationships with their spouses or partners, children and social life.

It is important to understand these findings in light of the organizational and life cycle stages of the business and owner respectively. For example, the 1999 survey showed that proprietors over the age of 65 comment on the positive effects working in their business has on their relationships with spouses and children and on their social life. In contrast, owners less than 40 years of age emphasize negative consequences.

Work Family Complexities

Moreover, family management and ownership bring unique qualities, challenges and complexities which permeate the business and the family. These complexities can precipitate problems in communication, intergenerational feuds and difficulties in separating family matters from business issues. This is despite people’s attempts to have a successful business and a happy family.

Families are emotional support systems. In contrast, businesses are supposed to be rational and market driven. Most conflicts and misunderstandings in family businesses have their origins in the patterns of relationships of families. The personal dynamics within families can influence business strategies, financial results, the business culture and ultimate performance of the business. A goal for every family business is to limit the possible negative effects of family issues on business matters and vice-versa. This is one reason why it is important to discover and understand the family dynamics behind the business structures. An understanding of family history often holds the key to resolving business issues. Both at work and in the home environment, families bring with them not just issues at hand, but a history of patterns of relating.

Work Family Conflict

Managing conflict between work and family demands is challenging not only for individuals, but also organisations. The family literature is dominated by references to various forms of conflict and problems associated with being part of a family firm. This body of literature documents stresses associated with not being able to get away from family members at or after work, being involved in multiple roles in relation to family members, as well as incompatible role pressures between job and family, such that participation in one role is made difficult by virtue of participation in another.

Healthy business relations begin with developing healthy family structures, as well as keeping in touch with what each person wants, what the family stands for and what the family wants from its business. To build an effective business, families not only need to develop business plans and goals, but also systems that will ensure effective communication mechanisms including how to deal with conflict and how to work towards achieving shared goals.

This article has been extracted and adapted from Smyrnios, K., Romano, C., & Dana, L. (2000). Family Business Succession Planning: A 10-Step Guide; Centre for Professional Development. 

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