Conflicts in a Family Business: A Case of Durga and Company

Abstract

The purpose of this Close Held Family Business (CHFB) case is to investigate the nature of conflicts that arise in a closely held family business. It also attempts to identify the key variables that must be fulfilled in order to ensure a smooth and successful transition from one generation to the next. The case necessitates why prevention, management and resolution of conflict is essential to carry on the bequest. The case also focuses on how succession planning is biased towards the male members of the family ignoring the capabilities and competence of females in the family.

Unstructured interviews around multiple stakeholders in the family business identifying the core issues that lead to conflict in the family and organizational structure has been used. In order to reduce biases multiple sources or incumbents within the areas of conflicts were interviewed. It is observed that conflicts are inevitable within closely held family businesses, specifically when the ownership and management is in the hands of the founder manager. However, it is widely accepted that conflicts are paramount to forward progression both for the family and business when it is considered constructively. The case also highlights the negligence of female siblings in the family.

The case reflects the importance of understanding the critical issues around family and business; family business together. The outcome is useful in relaying better understanding on dimensions of conflicts that plague family controlled business. However, generalization may not be plausible as this case refers to a small business in Indian context.

Small businesses must relay importance of managing conflicts and bringing in earlier resolutions before they plague and destroy the entrepreneurial family based firm. The aftermath of not resolving such conflicts can be as catastrophic of destroying the family business and its wealth in the longer run.

Keywords: Family Business, Conflicts, Transition, Women, Durga & Company