Running Head: WORKING WITH FAMILY

Working with Family

Luke Hayden
CIS: 110

Running Head: WORKING WITH FAMILY

Introduction
Family businesses are the backbone of the American Economy; they
comprise 80 to 90 percent of all enterprises in North America. This quotes show how
important family businesses are in creating a successful economy. Although family
business is extremely important, it can be conflicted. It statistically shows that a company
changing hands from the first generation to the second has a 30% success rate, even
though 70% of family businesses expect the next generation to take over. It gets even
worse, after the 30% success rate of the 2nd generation, the 3rd generation has a 12%
success rate. Clearly the odds are not in the favor of family business passed from
generation to generation. (Family Business Facts, 2014) Running a family business is a
delicate process; you have to balance the difference of family member and employee.
When family members work together, some issues may evolve, however if they posses
the experience, skills, and values to perform the expected task, it can lead to great
success.
Success Advantage of Family Owned Business
Although there are issues when working with family, it can be extremely
successful. Over 35

percent of Fortune 500 companies

are family owned,

proving family businesses can be

successful even on the

largest of scales. This doesnt

account for the amount of small businesses that have been run successfully for decades.
The majority of businesses originate from a family origin. You have to have the support
of your family for your business to succeed. The support usually contains hands on work

Running Head: WORKING WITH FAMILY

from family members. Family members offer a different aspect of an employee. Family
members have a sense of responsibility in a company and will put more hours, effort, and
consideration into their work. Family businesses are the main source of income in most
cases; they provide for their families and are taken much more serious then other jobs. I
can honestly say family business is a driving force between my families. It keeps families
working together, communicating, and striving to grow and succeed. Thomas M. Belk Jr.
is the CEO of Belk department stores. He said one of reasons family business was so
successful for him is because his father and grandfather would introduce him to everyone,
broadening his network at a very young age. He said it helped him develop assets, and
was one of the most beneficial things.
Another reason family business can be so successful is the insight you learn from
your family members. In a Forbes magazine article there was a repetitive theme of
knowledge passed down from family to family. (The Best Family Businesses, 2012) The
most successful family businesses were very close, they taught each other how to be
successful and continue to allow the business to grow and thrive while keeping a balance
between family and business.

Difficulties of Working with Family Owned Business

Working with family can be very difficult; it can also be very hard to be
successful. Some businesses are generationally owned, meaning the business is passed
down from father to son, and others can be cousins working together, brothers working
together, or distant relatives. However they all have their different difficulties.
Businesses that are owned and operated that have been passed down from

Running Head: WORKING WITH FAMILY

generation to generation face their own set of problems. Statistically generationally

owned companies do not have odds in their favor. Family businesses often fail because of
expectations that a family member will take charge after the boss retires. Over 70% of
family business owners expect to retire and have a successor take charge, which is
usually their child or close relative. Some problems faced with this are that family
members feel pressured into the job. They feel obligated to work for mom or dad in order
to make them happy. When a family member is expected to take over the business but
doesnt want to, another difficulty is they do not put in the effort needed to make the
business succeed (Reference for Business, 2014). Along with being pressured into
working for your family, bosses will pass on the business before they are truly ready to
take over.
The fail rate of generationally owned businesses isnt strictly because of the lack
of effort. Bosses all plan to retire and pass on the family business, some plan to retire too
soon. They pass off the responsibility of running a company well before the next man up
is ready. In my personal life I have seen how important it is to make sure the next
generation is ready to take over the family business. My grandfather started a family
owned trucking company that my father now owns and operates. My grandfather
gradually let my father take charge of the company, giving him more responsibility as he
proved himself. It wasnt until my grandpa thought my father was ready to completely
take over did retire, and then he will still around giving my dad a helping hand, making
sure things were running smoothly.

Running Head: WORKING WITH FAMILY

Conflict
When working with family members in a family owned business areas of conflict
are preferential treatment of family members, outside family issues being carried-over to
the work place, and family members expecting preferential hiring or positions. You have
to keep family issues out of the workplace and remain focused on business. You must
avoid the preferential treatment of family, and treat your family members like any other
employee and hold them responsible just as you would a regular employee. When it
comes to working with family, you need to be able to avoid conflict. You have to make
the decision, is your relative the right fit for the job, or will they cause distractions? If
you believe they are the right fit, you must prevent conflict. In business there are high
chances you will work with family, its just how you react to the situation.
One of tactics to keeping a healthy work environment and avoid preferential
family treatment would be having your family report to someone else. Have someone else
directly be his or her boss. If they have an issue they can address it through them, not
you. (Hiring and Working with Family, 2011) This allows them, and you to address an
issue in an unbiased fashion. Allowing problems to be solved and further issues from
being created. The idea is similar to having your business organized in a team fashion,
where certain departments report to the head of the department and the head of the
department reports to you. This is pretty much how businesses are structured anyways.
Another perk of having your family member report to someone else, would be that it
eliminates the chances of family treatment. This will prevent employees from thinking
you are giving your relative preferential treatment and keeps employees from becoming
unsatisfied or angry.

Running Head: WORKING WITH FAMILY

You must avoid family issues being carried over from external conflicts, such as
when family members hold grudges from the past. Family members will often continue to
look at each other as they did when they were younger. Siblings will think of each other
as the nagging immature little sibling they used to be and do not value their opinion as
they should. Even if a family member has proved how productive they can be, their
importance can be neglected. To avoid this you can have family members report to
different bosses so un-appreciation is avoided. It is also your job as a family member to
leave your grudges at the door when you come to work. The solution for family conflict
can be to see each other in a professional manner, not as a family member. The
professional manner involves respecting one another as an employee, and respecting their
position and opinions (Lea, J, 2014). This will prevent disputes and conflict that can tear
down a family owned business.
The process of hiring someone is intense. You have to be detailed in the interview
and background research. When you are hiring someone you have to make sure they have
the ability and experience to fulfill their job. When you are hiring a family member, it is
even more intense. You are already under scrutiny for hiring a family member, so this
person must fulfill the requirements. As a boss you will find yourself in the position of a
family member asking for a job more than once. It is your responsibility to make an
ethical business decision. It is suggested to overall avoid hiring family, however this isnt
always the case. Experts have recommended diagnosing your family member, make sure
they are not expecting a hand out from their relative, but make sure they are hard working
and are what you expect out of an employee. They need to have the ability and
experience required to fulfill their job. (Egeland, B, 2014)

Running Head: WORKING WITH FAMILY

When hiring family members it is important to remember why you are hiring
them. You are there to hire someone who will fulfill a role, meet your expectations, and
have the ability and experience to preform this task. It is your job to make an ethical
business decision when hiring a family member because it is your responsibility to do
what is right for the company. I make the reference to ethical because it your job are
the boss to make sure it is the best thing for the business, not just for a family member.
You have to have a balance of business and family and you need to know the boundaries.
(Egeland, B, 2014).
This summer I was hired by my father, but reported to the shop manager. Often
employees would joke with me about being the boss son and being able to do whatever I
want. These were usually jokes with no true meaning but I could tell people do look at
you differently if you are a relative of the boss, better yet his son. People had tendencies
to treat me different then others. They were much more formal with me and avoided
acting as if we were friends, fearing I would either tell on them for something they said or
avoid how they actually felt about my position at the company. Though I may note I was
truly the lowest man in the department I worked in and was shown respect because I was
not reporting to my father, but the shop manager. This way I was held to the standards
every other employee was held to and eliminated preferential family treatment.

Conclusion
When family members work together issues may evolve, however if they posses
the experience, skills, and values to perform the expected task it can lead to great success.

Running Head: WORKING WITH FAMILY

Overall family business can be stressful and successful at the same time. It is your job as
the boss to make sure family members and employees are treated the same and avoid
preferential treatment of family member in a family owned business. The businesses
future is your responsibility. You have to be smart about whom you hire, and how you
pass on the company. Working with family is a delegate task, but if it is managed
correctly can be successful. So far our family owned business has been managed very
well. We

have had few internal conflicts and

have been

very successful, this is proof that

family business can succeed and I hope to continue the success of our family owned
business.

Running Head: WORKING WITH FAMILY

References
Brown, C. (2011, February 18). 7 Rules for Avoiding Conflicts of Interest in a Family
Business. Retrieved October 30, 2014, from http://www.inc.com/guides/201102/7-rulesof-conduct-for-family-businesses.html
Egeland, B. (n.d.). Should You Hire Family and Friends for Your Small Business?
Retrieved October 30, 2014, from http://www.businessknowhow.com/manage/hirefamily.htm
Hiring and Working with Family. (2011, March 22). Retrieved October 30, 2014, from
http://www.businessweek.com/smallbiz/tips/archives/2011/03/hiring_and_working_with
_family.html
Lea, J. (n.d.). The Causes and Cures of Five Destructive Family Business Conflicts.
Retrieved November 24, 2014, from http://www.texasconflictcoach.com/.../Five-Causesand-Cures-of-Family-Business-Conflict
N.A. Family Business Facts, Figures and Fun. (n.d.). Retrieved November 12, 2014, from
http://www.familybusinesscenter.com/resources/family-business-facts/
N.A. Working in a Family Business: Understanding the Pros and Cons. Retrieved
October 30, 2014, from http://www.mindtools.com/pages/article/newCDV_40.htm
Reference for Business. (n.d.). Retrieved November 24, 2014, from
http://www.referenceforbusiness.com/small/Eq-Inc/Family-Owned-Businesses.html
The Best Family Businesses. (n.d.). Retrieved October 30, 2014, from
http://www.forbes.com/2011/06/17/best-family-businesses.html