How to Resolve Conflicts in a Family Business?
Dealing with conflict in a family business takes a lot of time and energy, if not dealt with in the proper way. The best way to deal with family conflict in business is to set-up a system to resolve conflicts between the main players in a family business. By setting up a conflict resolution system makes it easier to resolve conflicts and issues among business partners. Here are a few reasons why setting up a conflict resolution system to resolve issues within the family business is important:
- Legal disputes can be resolved quickly.
- It will cost the parties less in money, cost, time, and litigation of the dispute.
- The court system will not be overloaded with many cases.
- The parties can play a significant role in coming up with a resolution to the issue or problem.
- The decision makers have specialized experience and expertise to help resolve the legal dispute.
The two main forms of alternative dispute resolution that can be beneficial to a family owned business are arbitration and mediation. With arbitration and mediation, the family members will play an equal role in resolving the conflict. Also, all individuals with a major stake in the family business have a forum where they can voice their opinion and concerns about the business.
- Arbitration: Many companies are starting to include arbitration clauses in their contracts which require individuals to try arbitration before filing a legal claim in court. Arbitration usually involves the parties agreeing to allow a neutral third party to assist in resolving the dispute. The non-judicial and neutral third party is known as the arbitrator and the arbitrator will issue a decision that is binding on the parties and helps to resolve the legal dispute.
- The setting for arbitration is not as formal as a court proceeding. The arbitrator can be a lawyer or someone with expertise concerning the main topic or subject matter of the legal dispute. Arbitrations are similar to civil trials but do not have the rigorous rules like a civil trial concerning admission of evidence and record keeping procedures. Even though the arbitrator’s decision is binding on both parties, the decision can be overturned for the following reasons: 1. If any party committed fraud; 2. Arbitrator favored one party over another, was not impartial, or acted in a corruptive manner; and 3. If the arbitrator acted in any way that can be considered misconduct on their behalf.
- Mediation: Mediation is similar to arbitration in that a third neutral party will assist the parties in trying to find a resolution to their legal issues. But, in mediation the resolution agreements are not binding and can only be binding if signed by a judge. The neutral third party, in this form of ADR, is called the mediator. Mediation is more of a way for disputing parties to learn how to communicate with each other to resolve their issues or problems.
Conflict Resolution is a very resourceful tool to use in your everyday life, especially when need to resolve conflicts with others (like family, friends, co-workers, business partners, etc.) Conflict resolution teaches one effective techniques that can come in handy in everyday life. Some effective techniques used in conflict resolution are:
- being impartial;
- being non-judgmental;
- Good listener;
- Reflective; and
- Not opinionated.
There are many types of conflict resolution like mediation, arbitration, and alternative dispute resolution. The most common type of conflict resolution is mediation which uses a third party to assist individuals with resolving disputes in a safe, neutral, and stress-free environment.
One type of mediation is the “inclusive model” which has a five step process:
- Explain mediation process;
- Information gathering;
- Listing topics;
- Brainstorming and developing solutions to the issues that may come up; and
- Writing an agreement that resolve the issues.
Information gathering is a good technique to use in a dispute because it teaches you how to strategically listen to others to understand their feelings and their values about the problem at hand. With information gathering, you can ask open-ended questions to gain a better understanding of the issue at hand and get the flow of communication going to resolve the dispute. When in dispute with another person, you can sit down with that individual and brainstorm with each other to try and resolve the issue. Conflict resolution can be very effective in resolving legal disputes without wasting money and time in court. Conflict resolution skills are very helpful in one’s daily communications in business dealings.
Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. She has a few books in the works that will be published and released in the latter part of 2015. The books will focus on entrepreneurship, small business, and daily devotionals. She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC). Both are based in Baltimore, Maryland and were established in 2013. Services provided by FACMBC: Mediation and Conflict Resolution Services; Business Registration Assistance (Limited Liability Company, Corporation, S-Corp, Limited Liability Partnership, etc.); Business Plan Drafting Assistance; Business Certification Assistance (MBE, WOSB, 8A, 501(c) (3), Hub Zone, etc.); and Business Organization Assistance. She is also a contributing writer with the Maryland Daily Examiner Newspaper and the Leadership Girl Newsletter. Donya Zimmerman has made article contributions to the Simply Inspirational Women in Business Journal for 2014 published by Dr. Cheryl Cottle.
If you are thinking about starting your own small business or non-profit organization do not hesitate to contact me because I can show you how to do so. Contact information: firstname.lastname@example.org; www.facebook.com/FACMBC; www.twitter.com/FACMBC; https://dzimmerman36.wordpress.com; http://www.linkedin.com/in/dzbusconsultantandmediator
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