studyof conflict in family businesses.pdf

7/27/2019 studyof conflict in family businesses.pdf

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CONFLICT

A STUDY OF CONFLICT IN FAMILY BUSINESSES


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PREVIOUS

LITERATURE

Family business literature

Busby 1984

Conflict can be negative or positive

Conflict is only disruptive when members haveincompatible values

Conflict is mediated by two important factors

Tolerance of conflict

Willingness to compromise

Stafford et al. 1999; Danes and Lee 2004; Danes et al. 2002,2003, 2004; Amarpukar and Danes 2005; Werbel andDanes 2010

Use the Sustainable Family Business Model


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SUSTAINABLE FAMILY

BUSINESS MODEL


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PREVIOUS

LITERATURE (CONT.)

Stafford et al. 1999; Danes and Lee 2004; Danes et al. 2002,2003, 2004; Amarpukar and Danes 2005; Werbel and Danes2010

A summary of their results suggest that conflict is affect by:

Spouse employed in the business education

farm size

locus of control

off-farm employment

decision discrepancy endogenous shocks

Use a linear model to assess conflict and business/familysuccess


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Business/Family

Success

Level of conflict


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PREVIOUS

LITERATURE

Economic theory

Treatment of the household unit and household members

Assume one utility function for the household unit

Assume separable or independent utility functions

Sum of the parts the whole


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CONFLICT

What is conflict?

Is it all bad?

How do we measure conflict?

Conflict as a process and an outcome

What affects conflict?

Business characteristics

Family and business processes Endogenous shocks

Individual characteristics


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DATA

Data from the Family Business Succession Survey 2011

Questions were asked of only family businesses

427 Observations so far


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MODEL

Dependent variable

Conflict as an outcome

9 likert survey questions address both positive and negative

outcomes of conflict

Satisfaction regarding Support of ideas or

thoughts

Help when something is

troubling you Time spent with family

members

Tension regarding Authority

Ownership

Compensation

Business conflicts

Workload distribution


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MODEL (CONT.)

Index:

Dependent variable is the aggregation of likert scale

responses to questions about the outcomes of conflict

The scale of satisfaction questions was reversed

0

High

satisfaction

No tension

45

No

satisfaction

High tension


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10

15

20

25

30


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2

2.5

3

3.5


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MODEL (CONT.)

Independent variables

Business characteristics

How many employees are relatives

Spouse works in the business

Managerial authority related to ownership Management positions should be held by family members

Family and business processes

Role confusion

Gender roles

Role satisfaction

Conflict frequency

Tolerance



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MODEL (CONT.)Independent variables

Endogenous shocks

Cash-flow problems

Marriage

Divorce Child leaves to go to college

Adult child returns to the home

Adult child returns to the business

Individual characteristics

Gender

Race

Education

Age


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RESULTS


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Variable Coefficient T-statistic

Rel_employ 0.0063 1.14

Spouse -0.0299 -1.71*

Voting_ownership 0.0495 2.20**

Fam_management -0.0191 -0.81

Confusion_roles 0.1157 3.99***

Gender_roles 0.0832 2.91***

Role_satisfaction -0.0927 -3.09***

Frequency 0.0654 1.93*

Compromise -0.1058 -3.95***

Tolerance -0.0476 -2.05**

Cash_flow 0.1235 4.51***

Married -0.0428 -0.41

Divorce 0.2753 2.06**

Child_college 0.0678 1.83*

Child_return_home 0.0020 0.06

Child_return_bus -0.0386 -0.99

Gender 0.0199 0.86

Race -0.0778 -1.14

Ed_12GED -0.0299 -0.22

Ed_college -0.0575 -0.41

Ed_collgrad -0.0180 -0.13

Age 0.0058 0.94

Age2

-0.0001 -1.28

Intercept 2.6823 12.52***

Business

Characteristics

Rel_employ 0.0063 1.14

Spouse -0.0299 -1.71*

Voting_ownership 0.0495 2.20**

Fam_management -0.0191 -0.81

Confusion_roles 0.1157 3.99***

Gender_roles 0.0832 2.91***

Role_satisfaction -0.0927 -3.09***

Frequency 0.0654 1.93*

Compromise -0.1058 -3.95***

Tolerance -0.0476 -2.05**

Conflict as a

Process

Cash_flow 0.1235 4.51***

Married -0.0428 -0.41

Divorce 0.2753 2.06**

Child_college 0.0678 1.83*

Child_return_home 0.0020 0.06

Child_return_bus -0.0386 -0.99

Endogenous

Shocks

Gender 0.0199 0.86

Race -0.0778 -1.14

Ed_12GED -0.0299 -0.22

Ed_college -0.0575 -0.41

Ed_collgrad -0.0180 -0.13

Age 0.0058 0.94

Age2

-0.0001 -1.28

Individual

Characteristics


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CONCLUSIONS &

FUTURE WORK

Identification of factors that affect conflict

Increase Management based on ownership

Confusion about roles or roles assigned based on gender

Specific endogenous shocks Decrease

Spouse employment in business

Tolerance


Future work

Exogenous shocks Integrating this into the discussion of household/individual

utility


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QUESTIONS AND/ORCOMMENTS


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REFERENCES AND

ACKNOWLEDGEMENTS

Amarapurkar, S. S., and S. M. Danes. (2005). Farm Business-Owning Couples:

Interrelationships among Business Tensions, Relationships Conflict Quality, and Spousal Satisfaction. Journal of Fami ly and Econom ic Issues, 26(3), 419-41.

Busby, B. (1984) The Contribution of Conflict Analysis to Home Management Theory.

Journal of Consumer Studies and Home Econom ics, 1, 289-297.

Danes, S. M., V. Zuiker, R. Kean, J. Arbuthnot. (1999) Predictors of Family Business Tensions

and Goal Achievement. Fami ly Business Review, 12(3), 241-252.

Danes, S. M., M. A. Rueter, H. Kwon, and W. Doerty. (2002). Family FIRO Model: An

Application to Family Business. Fami ly Business Review, 15(1), 31-43.

Danes, S.M., P.D. Olson. (2003) Womens Role Involvement in Family Businesses, Business

Tensions, and Business Success. Fami ly Business Review, 16(1), 53-67.

Danes, S. M., and Yoon G. Lee. (2004). Tensions Generated by Business Issues in Farm

Business-Owning Couples. Family Relations, 53(4), 357-366.

Rygel, L., D. OSullivan, and B. Yarnal. (2006). A Method for Constructing a Social

Vulnerability Index: an Application to Hurricane Storm Surges. Mitigation and Adaptation Strategies for Global Change, 11, 741-764.

Stafford, K., Duncan, K. A., Danes, S. M., and Winter, M. (1999). A research theory of

sustainable family businesses. Family Business Review, 12(3), 197-208.

Werbel, J. D. and S. M. Danes. (2010). Work Family Conflict in New Business Ventures:

The Moderating Effects of Spousal Commitment to the New Business Venture. Journal of Smal l Business Management, 48(3), 421-440.

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studyof conflict in family businesses.pdf