How to effectively mediate family-owned small business disputes

“This article has been produced by an independent contributor and does not reflect the views and opinions of the Immediation team or the brand as a whole.”

Managing conflict is a natural part of operating a business. The challenge heightens when colleagues and employees happen to also be family members, as they would in a family-owned small business. With this complication in relations, what seems to be ordinary conflict can escalate into whole new dimensions.


Businesses that are not family operated have formal barriers in place to manage conflict between colleagues. Departments such as Human Resources along with the natural separation between work and family mitigate the severe repercussions conflict has on a business. 


Interconnect the business relationships with family and you’ll quickly find drama and emotions overwhelming the workplace. Unfortunately, many, if not most, family businesses lack a formal process or strategy to mediate business disputes which then makes it difficult to prevent inevitable arguments that develop into ongoing issues.  


Here are 5 tips on how to effectively manage and mediate family-owned small business disputes.


Incorporate a formal governance structure aimed at mitigating conflict 


Many family-owned businesses lack an appropriate forum to discuss business issues. A formal governance structure such as a family council, forum or board can help offer family members a safe and organised way to raise issues and negotiate business conflict. 


Incorporating such a structure can help mitigate family issues through the separation of business ownership and management functions.


Giving family members space


Step away from the matriarch or patriarch role and offer a safe way for family members to express their needs and concerns. Feeling under appreciated or ignored is what often leads to heightened emotional states that inflict family drama into business operations. 


Family leaders should take on an active role to encourage family members to voice concerns constructively and provide a space for them should they need to disagree. 


Keep business away from family time


This is easier said than done, but the most prominent way business problems turn into family drama is through failing to keep business away from family time. 


Set the example as the business leader in the family by separating the two as much as possible. Creating formal spaces specifically for business purposes that are designated away from the family stronghold will help. Other ideas include structured times for business discussions. 


Early communications of all issues


Legal disputes in small businesses are common. Many big issues stem from smaller problems that could have been resolved with early intervention. To avoid large conflicts from developing, encourage family members to communicate concerns at first instance so that they can be properly addressed before flourishing into a bigger problem. 


Formal family meetings should be held regularly with an open floor policy to encourage members to voice out their issues. Alternatively, taking a break from the daily routine such as a family retreat can also help in opening up the lines of communication. 


Involve expert mediators for major conflicts


There will be some issues that simply cannot be resolved internally. Family members risk becoming entrenched in the structure which then makes constructive dialogue difficult when emotions and feelings are heated. 


Engaging an objective expert mediator trained in conflict resolution can help look past the emotions and focus on the issues at hand. A professional mediator plays the role of guiding the family through conversations to find an agreeable resolution for everyone.


Utilizing online mediation as a platform to mediate family-owned business disputes can help keep mediation costs low with resolution times as quick as 30 days. Online mediation offers expert mediator panels with the added advantage of flexible schedules that work in favour of business operations.

Get in touch with Immediation to find out about our prices and how we can help resolve your family-owned business dispute today. 


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