Family Businesses and Conflict Resolution in the Middle East

Analysis

Each family more often than not has its own set of internal, unresolved issues. Throw a fully-fledged running business and its management and a challenging business environment into the mix and the issues are understandably compounded. This legal update touches on the issues that are likely to lead to conflicts in family businesses and highlights ways to manage/resolve such conflicts.

When emotion comes into decision-making in business, you know things are going to get difficult and you may be headed for disaster. If left unchecked for an extended period of time, this may lead to the business being irretrievably damaged. Managerial decisions are supposed to be made on the basis of sound commercial principles; however, when such decisions are influenced by responsibilities towards other family members and family customs and traditions, differing priorities may emerge.

Issues that lead to conflict

The fundamental issue here is that not everyone in the family will necessarily appreciate the roles of each of the three components of a family business:

• the family;

• the ownership; and

• the management.