Top sources of conflict within Aussie family businesses revealed

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Closeup on businessman holding a card with text FAMILY BUSINESS, business concept image with soft focus background

New research from the 2021 Family Business Survey by Grant Thornton in partnership with Family Business Australia and Family Business New Zealand (FBANZ) reveals that 83 per cent of all Australian family enterprises have experienced some sort of conflict during the last 12 months.

The survey found that the most common sources of conflict are the following:

  1. Balancing the needs of the family vs the needs of the business (31 per cent).
  2. Future vision, goals and strategy of the business (26 per cent).
  3. Family member communication style (24 per cent).
  4. Succession-related issues (24 per cent).
  5. Managing growth (20 per cent).

Other conflict issues that were high on the list include business survival (16 per cent), remuneration of family members (15 per cent), and competence of family members working in the business (15 per cent). Surprisingly – and despite perception in popular culture – sibling rivalry was ranked the lowest as a source of conflict at only five per cent, which is actually consistent with the Family Business Survey findings from previous years. In relation to this, 17 per cent of family businesses experienced little or no conflict during the last 12 months, in the midst of the COVID-19 pandemic.

The report noted that the average Australian family-run business turns over $22 million in annual revenue and employs over 60 people. The industry’s peak body, Family Business Australia, has found the sector is worth approximately $4.3 trillion, with family businesses accounting for 70 per cent of all businesses and employing around half of the country’s workforce.

“Guided by years of experience and the knowledge of countless family businesses, an independent facilitator can help to establish the structures and forums to address conflict, but more importantly enables families to have open and honest conversations about the direction of the business – generally preventing conflict and resulting in profits,” Kirsten Taylor-Martin, Partner Private Business for Tax & Advisory at Grant Thornton, said.

“As family member communication style is an issue for a quarter of all Australian family businesses, the introduction of independent facilitation eliminates this concern as each member of the family is heard and understood,” Taylor-Martin added. “In addition, professional management can provide expert guidance on succession planning, managing growth and financial stress.”