In this week’s reading, Chapter 4: Predictable Conflicts in the Intersections, discussed the dynamics of conflicts that exist within the family business as it relates to family, ownership, and management, which is also known as the three-circle model. This model derives from a breakdown of the two key elements of business, management and ownership. When the family is combined with business it is highly likely for paradoxes to stem from one of the three circles and the conflict becomes and paradoxes become more complex because the three circles are so closely connected and dependent upon each other. According to the reading, a problem, or a situation that reflects perplexity or difficulty is a result of underlying conflicts. The underlying conflicts are actual or perceived opposition of needs, principles, and/or interests. The contradictions are competing points of view, which births the paradoxes the business faces. (Schuman, A., Stutz, S., & Ward, J.L. 2012, p. 78)
The conflicts that stem from this model are separated into three categories by the authors which are family-management conflicts, family-owner conflicts, and management-owner conflicts. The family-management conflicts would include family employment, family member compensation and perks, retirement age, leadership succession, and family decision-making. (Schuman, A., Stutz, S., & Ward, J.L. 2012, p. 80) The management-ownership conflicts would include board make-up, distributions and dividends, risks and growth goals, family redemption or liquidity, and transparency of personal estate plans and financial stability. (Schuman, A., Stutz, S., & Ward, J.L. 2012, p. 83) The family –ownership conflicts would include stock ownership, family meeting agendas, owner succession, supporting family members in need, and business conflicts of interest. (Schuman, A., Stutz, S., & Ward, J.L. 2012, p. 86)
This information present in this week’s reading supports the reader’s position as it relates to the dynamics associated with the family business. Will the family business ever be free of conflicts and paradoxes that will need to be managed, absolutely not. This is why is it would be beneficial to the family business to be proactive and put in place policies and procedures and to work hard at keeping the lines of communication very clear between the owner, family and the management personnel. All three parties need each other to insure the business is productive. Even with policies and procedures in place, situations always arise that require policies and procedures to be amended and adjusted in order to protect the brand and the health of the business. The information present is very helpful to future conflict intervention professional because the dynamics of the conflicts that family businesses face are more complex and require the mediator to understand the roles, functions and duties of the family, owner, and management personnel.
The authors’ presentation of the concepts introduced in...