Conflicts in Family Owned Businesses: an Indian Perspective

Topics: Family, Aditya Birla Group, Birla family Pages: 28 (9387 words) Published: October 8, 2008
Conflicts in Family Owned Businesses: An Indian Perspective

Prepared in partial fulfilment of the course
Organisational Behaviour I
D V Raja Sekhar
B Rahul Singh


1 Introduction
1.1 Conflict
1.2 Types and Causes of Conflict
1.3 Family Business

2 Literature Review
2.1 The Distinctiveness of Family Firms
2.1.1 Strengths – Visions and Values
2.2 Conflicts and their Possible sources in a Family Firm
2.2.1. Risks – Family Tensions
2.2.2. Growth – Patterns and Consequences
2.2.3. Organisational Imperatives

3. Case Studies
3.1 The Bajaj Family Feud
3.2 The Birla Family Feud
3.3 Murugappa Group
3.4 DABUR Group

4. Conclusion


1 Introduction
1.1 Conflict

On broad terms, conflict can be defined as a state of hostility between two or more groups. A clearer version of this is given as ‘when two or more parties, with perceived incompatible goals, seek to undermine each other’s goal seeking capacity’. For most people this term has a negative association, but it depends on the context and the maturity of the individuals or groups involved whether this situation can be used to the advantage of the groups involved or not. Conflict of course can be a dangerous attribute for an organisation if not handled properly.

Conflict might be present in both competing situations and also in collaborative situations. The presence in a competing situation is well understood by virtue of inconsistent goals, but in collaboration also conflict might occur, mostly because the method of approach to reach the goal might be different for different stakeholders. Thus we cannot expect to isolate conflict from our daily life scenarios.

1.2 Types and Causes of Conflict

We believe that a conflict generally arises when one party perceives that the other party has negatively affected, or is about to negatively affect the interests or something else that the first party cares about. The causes of a conflict can be multi dimensional. They range from religious to regional biases, interpersonal issues, social issues, economic or environmental reasons and even emotional causes. The conflict is defined based on what is the reason behind its presence. Some conflict types are Intrapersonal conflict, interpersonal conflict, intra-societal conflicts, inter-societal conflicts, military conflict etc.

Conflict can also be grouped on the basis of the effect it has on the group as a whole. These types are Functional conflict: Conflict that supports the goals of the group and improves performance. Dysfunctional conflict: Conflict that hinders the performance of the group. Task conflict: Conflict that arises over controls and goals of the work. Relationship conflict: Conflict based on interpersonal relationships. Process conflict: Conflict that arises on the basis of how work should get done.

A conflict process has five stages
Potential opposition or incompatibility
This is when the opportunity or conditions for arising a conflict are created •Cognition and personalization
This is the stage when the potential of conflict gets actualized. •Intentions
The intentions intervene between people’s emotion and perception and their overt behaviour. They are basically nothing more than decisions to act in a certain way. •Behaviour
This is the stage when intentions and the presence of conflict becomes clear and statements are usually made by the parties involved. •Outcome
This is the result of all the four stages above. It might be a positive (functional) one or a negative one (dysfunctional).

1.3 Family Business

A family business is a company, owned, controlled and operated by members of one or several families. Many public companies today were originally family owned businesses. Though the top positions of such enterprises are allotted to the members of the family, they have many non family members as employees. Family participation in...

References: • Cadbury,S:2000 Family firms and their Governance, Creating Tomorrow’s Company from Today’s, Egon Zehnder International (Great Britain)
• Das and Chittoor, Professionalization of Management and Succession Performance- A Vital Linkage, Journal of Family Business Review, Vol XX, no. 1, March 2007.
• Robbins, S: 2007, Organizational Behavior, reprinted (Prentice Hall, Inc, USA)
• Poelmans Steven A.Y, S: 2005, Work and Family: An International Research Perspective, Lawrence Erlbaum Associates, Incorporated.
• W. S. Schulze, M. H. Lubatkin, R. N. Dino, and A. K. Buchholtz, Agency Relationships in Family Firms, Journal of Organization Science, Vol 12,No 2, March-April 2001
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