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Horizons of Lohana Families
In
today's Lohana World, there is still a high percentage of
family-owned and family-run business. These, while often
hugely successful are subject to pressures and problems
created by their very personal management structure. So what
are the pitfalls, and can they be avoided ? Effective
mechanisms for communication inside the family firm seldom
exist, despite being the first barrier to conflict. Although
small firms tend to be based on "negotiated
paternalism" in which all the family members have some
sort of stake in decision making, even if only a passive one.
This
style tends to create hidden agendas covering a series of
potentially sensitive family issues that might generate
conflict.
The roots of conflict often lie at least as much in psychology
and emotional baggage as in real issues of strategy of
management. Family relationships are fixed before business
ones. Rivalries
begin
in the cradle and can create fears of dependency or of
manipulation that are irremovable.
Perceptions tend to stick. It is difficult for a parent to
treat children as anything but that. Letting go and handing
over can be so difficult. Spouses can add new complications,
for good or bad.
Many family firm founders holed by
nepotism, which has encouraged unsuitable family members to
enter the business, and alienated family members.
Many high flayers are discouraged from entering family firms
because of the fear that their performance will count for
nothing against blood.
On
the other hand an autocratic founder may be reluctant to allow
his heirs into the business, equally he or she may not
recognize that the next generation have different aspirations.
All family members should spend some time working outside of
the business to help them to crystallize their personal
ambitions.
The admission of outsiders is likely to be a danger point
unless handled with greatest of care and through wide
consultation.
If
most family members perceive that the firm is family first and
business second, the MD's decision to allow a 45 year old
finance director onto the board may not go down well on
children who have distinct ideas on what they to do.
Prevention is firstly a matter of good communications. A
family forum is desirable; somewhere where all family members
know that they are on neutral territory. The head of the firm
needs to make efforts to listen and to give everyone a voice.
The forum has the objective of building a consensus, not
imposing edicts.
In the forum the family will need to set commercial objectives
for the business, having decided whether it is primarily a
family concern or a commercial enterprise. All family members
need to be encouraged to express their reservations about any
project or decision. These
reservations need to be expressed face to face, not though a
messenger, who may have his or her own agenda or
interpretation of the issues. Finally,
a forum should never allow for attacks on family members or
the laying of blame. Family members must accept that
commercial reality will require evolution. So the forum must
discuss change: after all the firm is where many family
members will spend the rest of their lives. Individually
objectives also change and need to be respected.
Decisions taken about the business many affect different
family members in different ways, leading to changes in roles
and ambitious that also needs to be aired.
Family Senior should communicate
their thoughts, expectations, plans and decisions as early as
possible to the family and the firm as a whole. The more
important the issue, the more important it is that
stakeholders should be informed and consulted, rather than
left to nurse their hurt pride after finding out on the
grapevine.
A family constitution can be effective way to embed a
conflict-resistant structure. Trusted senior family members
should never become crafty or traitorous, because of the
power, money and ego that they command - especially elder
brothers or fathers.
Betraying trust is the end of a
family.
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