Even in the most advanced economies, families’ account for a very significant portion of business ownership, control and management. The family business has both strengths and weaknesses. The important thing is to recognize and understand them. Among the weaknesses of the family management, the conflict between the interests of the family and the enterprise as a whole is quite common. The strength of the family can be realized only when the family understands that its personal objectives can be realized only by the long-term success of the enterprise. While allowing some family privileges, the need to accept some limitation on family rights and prerogatives has to be recognized in order to obtain a strong management organization.

The job of operating a family-owned company is often grievously complicated by friction arising from rivalries which may involve cousins, brothers and even a father and his only son or other members of the extended family, who though not shareholders, hold positions in the business. In the atmosphere of unresolved rivalries and conflicts, everyone feels uncomfortable. The conflicting emotions make the family members behave in a manner, which not only cannot be explained or accounted for, but is also contradictory in nature. The feelings of rivalry of one member of the family are the reflection of the feelings of the other. These conflicts terribly tear the family members, resulting in fierce competition and a hostile rejection of dependence of each other. Sometimes the competition can even lead to a manipulative alignment with the employees, business associates or those relatives not connected with the business. The ladies (mothers and wives) have a stake in their own men and may become a foil and reflection of their ambitions and fantasies.

Due to friction within the family, the business becomes a battleground that produces casualties but no peace. To overcome such a situation, a few suggestions need to be thoughtfully considered, namely:-

• Family members should try to discuss freely the fears, worries, anger and disappointments causeed by each other. They should also be able too talk about the affection of each other. Since there is a love and hate in all relationships, these can not, by definition, be pure. They should neither feel guilty nor have feelings of self-pity about their anger with each other, but they need to talk it out.
• Having done that, they can divide, recognize and reallocate tasks in the organization so that each will have a chance to acquire and demonstrate competency and work in a complementary relationship with each other. Structural changes can go a long way to smoothen the ruffled and disturbed feelings.
• No one should behave like a big brother. Even when he does not do so, care should be taken that the others do not perceive so. We all know that perceptions are not always based on truth.
• It must be made clear in the common interactions repeatedly that the interest of the organization is supreme and that professional competence must be given precedence over individual choice or discretion. It is also necessary to clarify in the same context that if for emotive reasons or other compulsions, if an incompetent or unproductive person from the family has to be ‘accommodated somehow’ or paid as a part of the organization, it is better to pay the dead wood outside the organization than to pay him on a job inside the set up. The existence of an incompetent and unproductive person breeds more of the type.
• As the different units flourish individually, all should co-ordinate, with each other and function with understanding and harmony in the best interest of the family - namely the group establishments. These are called sister (and not brother) concerns as women contribute more than men to the unity and peace of the house. Women are associated with love, affection and emotion of stability. That is why we always say ‘mother-land’, ‘mother-tongue’ and even ‘mother-board’ used in the computers.
• Units situated at different stations and even at different places in the same station can be treated as independent establishments without deserting the corporate umbrella of culture. Details in this respect can be worked by mutual discussions.
• To ensure smooth functioning of the business organisation, all the important parameters like extent of functional integrity and Independence, source of finances, purchases, market strategy, advertisements, transfer of employees etc. should be discussed threadbare and defined with full clarity. The idea is that all the units should progress on the basis of co-operation, group dynamics and synergism. Objectives should be to develop a culture that abolishes. “WE” and ”THEY” syndrome and behaviour.
• For taking decisions, which is the main function of the management, these can be classified as (i) ‘GREEN’, that any Director can take; (ii) “YELLOW’, that any group can take (iii) “RED’ that have to be taken collectively by both the groups and (iv) ‘OUT-OF-BOUND’ that have to be referred to the Board of Directors. The essence of this system is that the entire team meets at least once in a month and each member reviews with his colleagues his performance during the month and discusses his plans for the following month.
• The Board of Directors of a limited company can authorize any person to make appointments of the employees by passing a resolution to that effect. It is not necessary that the Managing Director should be the appointing authority. Any Director or even a non-shareholding manager can be given this power.
• The penalty of removal or dismissal from service can be inflicted only by the appointing authority or a superior authority but not by the authority sub-ordinate to that authority. If on account of amendments in the company resolutions, the lower authority becomes competent to make appointments, the old employees cannot be removed or dismissed from services by the new authority, which is junior in rank to the previous appointing authority.
• Under the Labour Laws, the concept is of a single person to be the ‘appointing authority’, ‘employer’ or ‘occupier’ in respect of an establishment. For example, section 2 (d) of the Industrial Employment (standing orders) Act, 1946 which requires an employer to define with sufficient precision, the conditions of employment under him and to make the said conditions known to the workmen employed by him, defines the term ‘employer’ by reference to ‘any person; and ‘head of department’. In section 2 (g) of the Industrial Disputes Act, 1947 which defines the term ‘employer’ the expressions used are ‘ head of the department’ and ‘chief executive officer’. Similar is the position in the definition of the term ‘employer’ as contained in section 2(17) of the employee’s State Insurance Act, 1948. In fact, the working journalists and other newspaper employees (conditions of service) and Miscellaneous Provisions Act, 1955 does not define the term employer but says in section 2(g) that all words and expressions used but not defined in the Act and defined in the Industrial Disputes Act, 1947 shall have the same meaning respectively assigned to them in that Act. Obviously, there can be only one ‘head’ or ‘chief executive’ of an establishment. Under the factories Act, 1948 there is no definition of the term ‘employer’ but instead, vide section 2(n), the term ‘occupier’ is defined to state that in case of a Company ‘any one’ of the directors will be deemed to be an occupier.

Thus dualism and diarchy in vital areas of human resource management will not only be in discordance with law but would also create administrative and industrial relations problems. Besides, any divergent arrangement would be pregnant with very damaging mischief. Needless to mention that an approach can be effective only when a macro perspective of the long-term effect is kept in focus.

Last but not the least if a member of the family or blood relation who is incompetent is to be supported or rehabilitated then the adjustment should be made outside the organization or else with the passage of time you will loose the business and also the relationship.