The effectiveness of the organizational culture and relationship is an important factor in managing family business conflicts successfully. Clear boundaries must be established between the family and the business in order to avoid the interference of family member relationships in the business affairs of the organization. Instead of leaving the problems unresolved, a healthy family business will timely find solutions to different issues existing in the supply chain. In addition, a potential family business is one which enhances information sharing, employee participation, and conflict management. In a strong family business environment, rewards to shareholders can be tangible; and psychological incentives and the effectiveness of those rewards is determined on the extent to which they impact on the business’ planned needs and family relationships (Schneider 9).
Before providing any type of tangible or psychological incentives, the management identifies the critical tasks to be accomplished and creates a list of employees who are to be incentivized for the achievement of the identified tasks. In order to be a healthy business, the family compensation plan should be designed giving particular focus to market rates, position, and performance but not an entitlement.
Usually, the leading family business houses make provisions for providing highly talented non-family members with special incentives so as to persuade them to join and stay with the business. In the words of Schneider, helpful mechanisms of a healthy family business can be resources like technology, infrastructure, and strategic management policies that would assist it to accomplish its crucial tasks (para 9). Generally, a competitive family business develops a distinctive planning process for the formation of intermediate, short term, and strategic policies.
A well-designed performance feedback system that would not discriminate between family members and non-family members.
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