Family Can Put Strain on Business Decision-Making

Is your business a family business? Are you considering going into business with family members? If your answer to either of these questions is yes, you may be interested in some newly revealed findings from a study conducted by Harris Interactive and commissioned by MassMutual.

According to the findings, family members who operate businesses together say that knowing, and agreeing who’s in charge of what is a key to success. Second-guessing is critical , the firm says – without agreement on who the boss is, decision making can grind to a halt and the business can become "paralyzed". This is what respondents said.

"It’s important so you don’t butt heads… One of you has to make a decision and you have to stand by it," said one respondent, who co-owns a restaurant with her sister. 

"The issue of who’s in charge of what often sorts itself out naturally, with owners gravitating to the areas that they like best, but that’s not always the case," said Beth Wood, assistant vice president of Business Market Development, MassMutual, and a former family business owner herself. "It’s extremely important to have these conversations openly, to identify the areas that each owner will be responsible for, and then to trust each other to make good decisions."

56% of respondents say they do not share a role with other employees. Still, about three-quarters (73%) of respondents said that key business decisions are usually discussed between at least two people before a decision is made. Overall, 68% of respondents said their decision-making process is effective.

The biggest reasons named for ineffective decision-making were stalemates between partners, overly emotional debates, and a lack of decision-making speed.

"The findings should be a wake-up call to family business owners or those who are thinking of opening a business with family," said Wood. "To help the business succeed, you have to put aside any territorial disputes and make decisions that are in the best interests of the company."

If you run a business with family members, do you find decision-making to be an issue? Would you consider going into business with family?