Escalation of Conflict in Large Private Family Business

Abstract

Family businesses represent the majority of firms and play a major economic role worldwide. This study investigates escalation of intra-familial conflicts in family top management teams. Using a Critical Incident Technique approach, this study uses interviews to collect data from 23 family and non-family individuals and groups within six large-scale privately-held family businesses in Indonesia. The study develops a theoretical model to explain why family business conflicts escalate and become destructive. An inductive content analysis found that the use of a dominating strategy by both parties in dealing with conflict, the expression of negative emotions, and the involvement of non-family employees are more likely to cause escalation. Based on the results the study proposes a model of conflict in family businesses. This study contributes to the theory of family business conflict to help make family business more satisfying and productive.