Case study
Alpha67
2023MGMT4710Chapter21.pptChapter Two
The Family Dynamics Challenge
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Unhealthy Family Culture
- Characterized by:
- Secrecy
- Lack of information
- Low levels of family emotional intelligence (EQ)
- Little knowledge of the business among at least some family members
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How Did This Happen?
- A result of:
- A founding culture that supported autocratic leadership
- The family’s belief in the benefits of privacy
- Zero-sum dynamics: win-lose between members or branches
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Two Very Different Family Cultures 1
- The Binghams
- Louisville Courier-Journal Companies
- Sold the company after years of bickering
- The sale of the company did not bring the family together as hoped
- Relationships characterized by emotional distance
- Absent was:
- A commitment to family-business continuity
- A family “trust catalyst”
- A board with independent outsiders
- Family meetings
Two Very Different Family Cultures 2
- The Blethens
- Seattle Times Company
- Continue to own and operate several newspapers in to the fifth generation
- Present is:
- A commitment to continuity (even in the face of a financially crippling strike)
- Individual responsibility to the group
- A sense of stewardship
- Family unity
- Frequent family meetings
Zero-Sum Dynamics and Family Culture
- Zero-sum dynamics are characterized by exchanges in which one party’s perceived gain is the other party’s perceived loss
- The absence of growth (and increased wealth and career opportunities) in the family business is fertile ground for zero-sum dynamics
- Illiquid enterprises (not much cash & convertibles)
- The us-and-them dynamic can be triggered by any perceived difference:
- male–female, active in management–inactive in the firm, older–younger, richer–poorer, educated-not educated, etc.
The Family Systems Perspective 1
- Family is the building block of emotional life
- Uses systems thinking to understand complex interaction between members of the family
- Change in a member’s behavior is likely to be sustainable at the family level than at the individual level
- Interdependence is the source of social/physical/intellectual/emotional rewards in the family
- May give rise to conflicting needs, desires, and priorities as the family grows and ages
The Family Systems Perspective 2
- Families often look to an individual to blame whenever there is trouble and tensions
- Sharing responsibility for the difficulty and its remediation is more effective than individual solutions (shared solution)
- Family origins influence:
- Patterns and processes set in motion from two or three preceding generations still matter
- The analysis of earlier generations is essential to understanding what ails or distresses a family in the present
The Family-Business Interaction Factor
- High scores on family unity combined with high scores in career opportunities in the business produced a high score indicating a positive family-business interaction
- This positive family-business interaction factor was a great predictor of the number of best management/ governance practices implemented and the source of a hypothesized virtuous cycle
Source: Poza, E., Hanlon, S., and Kishida, R. “Does the family-business interaction factor represent a resource or a cost?” Family Business Review, June 2004, pp. 99–118.
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The Family-Business Interaction Factor
Family Unity Index
Source: Poza, E., Hanlon, S., and Kishida, R. “Does the family-business interaction factor represent a resource or a cost?” Family Business Review, June 2004, pp. 99–118.
High correlation with effective management, feedback, succession planning, advisory boards, and family meetings.
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Conflict Management
- Family meetings can provide a forum for minimizing the potential for conflict and addressing the troublesome problems that confront multigenerational families
- Family meetings can address existing problems such as:
- Frustration over alienation or lack of inclusion
- Anger over the unfairness of hiring practices, promotions, family benefits, etc.
- Frustration over dividends and lack of liquidity
Bowen’s Family Systems Theory (FST)
- Emotions are powerful given the context of family history
- Differentiation is a foundational principle of FST
- individual thought and reflection can promote an individual functioning above historic patterns, even under conditions of stress
- Triangulation is used to learn about relationships
- pattern among three people
- Third person listens to triangulate what is wrong
- Cutoffs are unresolved emotional attachments to parents
- Leads to family members distancing themselves from their family of origin
- May “repeat the sins of their past”
Family Emotional Intelligence (EQ)
- Capacity to recognize feelings and those of others
- Ability to manage emotions and relationships
- Seeks to increase ability to handle feelings with skill and harmony
- Make better decisions through teamwork for family unity
- Emotional Competence Inventories:
- 360-degree feedback process
- particularly helpful to next-generation members of a family in business
- A little pricy, but worth it!
Social Styles of Behavior
- Based on the work of Dr. James Taylor
- Extensively developed by Dr. David Merrill and Roger Reid (1964)
- Now owned by TRACOM Group.
- Gets away from personality
- Behavior is Observable!
What is Social Style?
- Our behavior as we interact with other people.
- Understanding how we come “Across” to others
- Understanding the social styles of others
- Working with others and their social styles
- The goal is to obtain “Versatility”
Tell Me More About Social Styles
Available at www.traconcorp.com/solutions/by-elements/social-style/model/. Downloaded on 10/21/2015 by S.M. Sexton for use at the University of North Texas.
Counterproductive Behaviors
Counterproductive behaviors detract from performance and actually cost the organization. Let’s look at each of these types of behavior in a bit more detail.
Absenteeism - when an employee does not show up for work.
Turnover - annual percentage of an organization’s workforce that leaves and must be replaced.
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Personality at Work
- Personality
- The relatively stable set of psychological attributes that distinguish one person from another
- May manifest in behavior
- *Avoid doing harm with interpretations of results
- You can damage a person’s psyche publishing results
- Numerous instruments out there in paper and pencil form or Web based
- Meyers Briggs Framework based on Carl Jung
- MBTI for communication & interaction styles
- BFI
- Others
Personality is the relatively stable set of psychological attributes that distinguish one person from another. In recent years, researchers have identified five fundamental traits that are especially relevant to organizations. These are commonly called the “big five” personality traits
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The “Big Five” Personality Traits
The “Big Five” Personality Traits The “big five” personality traits are shown in Figure 8.1 and can be summarized as follows.
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What Are The “Big Five” Personality Traits?
- Agreeableness
- a person’s ability to get along with others
- Conscientiousness
- a reflection of the number of things a person tries to accomplish
- High correlated with organizational success
- Measures:
- good nature
- cooperation
- how trusting
Agreeableness is a person’s ability to get along with others.
Conscientiousness in this context refers to the individual’s persistence, dependableness, and orderliness. Highly conscientious people tend to focus on relatively few tasks at one time; as a result, they are likely to be organized, systematic, careful, thorough, responsible, and self-disciplined.
Emotionality refers to the degree to which people tend to be positive or negative in their outlook and behaviors toward others. People with positive emotionality are relatively poised, calm, resilient, and secure; people with negative emotionality are more excitable, insecure, reactive, and subject to mood swings.
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More “Big Five” Personality Traits
- Emotionality
- the degree to which people tend to be positive or negative in their outlook and behaviors toward others
- Extraversion
- a person’s comfort level with relationships
- Openness
- reflects how open or rigid a person is in terms of his or her beliefs
- imagination
Extraversion refers to a person’s comfort level with relationships. Extroverts are sociable, talkative, assertive, and open to establishing new relationships. Introverts are much less sociable, talkative, and assertive, and more reluctant to begin new relationships.
Openness reflects how open or rigid a person is in terms of his or her beliefs. People with high levels of openness are curious and willing to listen to new ideas and to change their own ideas, beliefs, and attitudes in response to new information. People with low levels of openness tend to be less receptive to new ideas and less willing to change their minds.
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Planning and Policy Making
- Family councils foster open and safe processes for sharing information
- The focus of family councils should be conversations, deliberations, and policy making
- The council may suggest policies such as:
- Employment and subcontractor policies
- Board service and family council service policies
- Dividend and liquidity policies
- A family constitution
