An already popular myth that if we talk about family business. In fact, many family firms are able to survive for several generations.
There’s even that has endured for centuries. For example Hoshi Ryokan, the world’s oldest hotel, founded in 717 in Japan. This hotel has survived for 46 generations. There is also Fonderia Pontificia Marinelli, Italian bell manufacturer established in 1040.
In Indonesia, though not as old as the Hoshi Ryokan, or Fonderia Pontificia Marinelli, many old family company that has more or less nearly a century and lasted until now.
The success of many family firms survive from generation to generation is thanks to the entrepreneurial spirit, ability to adapt to environmental changes, and the ability to apply modern management principles.
The collapse of the family company just often caused by internal factors. One is the conflict between family members. Protracted conflict which resulted in disruption of corporate activity, employee confusion, decreased morale, and declining performance. In order to prevent a protracted conflict, the anticipation must be done. In this case, family firms must understand the roots of conflict.
The roots of conflict between family members in various companies. The main one is the failure to align the values and business goals, families, and persons for the advancement of the company.
This failure is devastating, especially for the management of human resources (HR), which is the most important asset of the company. As is known, human resource management (HRM) consists of the policies of recruitment and selection, compensation, performance evaluation, career development, and training and development.
But in the family firm, family emotional relationship factors often influence those policies. For example, in terms of recruitment and selection.
Often family members feel entitled to be part of the company. They ask for a job in a company without considering the competence of the reasons family members should help each other.
Whereas for the advancement of the company, are clearly needed qualified individuals, who often need to be recruited to fill out a member of the family. Recruitment of individuals who are incompetent will threaten the company’s performance and even longevity.
Human Resource Management
Poor management of human resources in family firms is certainly a negative impact such as the outbreak of conflict, the situation is not conducive to work, the development of various intrigues, and the high rate of employee turnover. Therefore, to prevent conflict, must be prepared in a fair human resources management policy.
Policy of recruitment and selection, compensation, performance evaluation, career development, and training and development should be based on professionalism and competence rather than family relationships.
Other causes of conflicts related to communication. Communication between family members is informal, can be done anywhere and anytime. The topic was not just about business. If not careful can fuel conflict, which impact on the management of the company’s business.
Another problem is the reluctance of family members to be open and honest for fear of being disturbed harmony. As a result, the issues faced are revealed. When companies fall issue, the conflict broke out. Therefore, family members should encourage open and honest communication in order to avoid misunderstanding and blockage of information.
Senior generation’s reluctance to withdraw may also fuel the conflict. The younger generation is often less given the freedom to develop themselves. Senior generation is still happy to intervene despite having claimed back.
As a result, young people become independent and uncomfortable. It is no wonder many of the conflicts broke out after the death of the senior generation. That families continued to get after the death of the senior generation, succession planning is absolutely necessary to mature.
In many family firms, the conflict actually broke out when the company is growing rapidly. When the initial set up, easy to grab the founder of the family members’ commitment. They are aware of must unite in order to survive and advance.
Communication and information flow without distortion. Faster decision was taken because of the dominance of the founder, who has a strong control over resources and engage in daily activities of the company. Mutual trust between family members high.
In case of dispute, as a highly respected founder will directly intervene. Every decision is obeyed. Unfortunately, as the company grows, the relationship between family members become more complex. Success also makes family members overly confident. Even begin to put forward their personal interests rather than business. As a result, family members disrupted harmony.
To prevent this, companies need to develop structures, systems and procedures, which regulate the rights, obligations, duties, and responsibilities of each family member.
Sibling rivalry often plunged the company into a bloody conflict. Competition can occur in terms of power such as wealth distribution. Further increasing the family members who joined the company as well to watch out for potentially triggering competition that can lead to family conflicts.
To anticipate this, the role of each family member in the family should be regulated. Issues that should receive attention include revenue sharing and ownership for each family member. Trace the roots of conflict, it is necessary to watch out for and anticipated for the glory of the company while maintaining harmony among family members.