Crises and Conflicts in Family business are multifaceted: they can be factors of stress and risk, but at the same time can provide important indications of a need for structural clarification – for example, regarding roles, decision-making pathways, or in the Design of Business succession. Crucially, it's important to know the differences: a conflict describes a goal-oriented dispute over differing interests or positions. A crisis, on the other hand, arises when the entire system's ability to act and stability come under pressure.
The aim is therefore not to avoid crises and conflicts at all costs, but rather a systemic Conflict management in the company to establish. Targeted prevention mechanisms can ensure the long-term viability of entrepreneurial families and their businesses. The WIFU Foundation offers concrete assistance and new perspectives for dealing with these areas of tension.
In family businesses, the systems of family, ownership, and company are intricately intertwined. When the logic of the family (belonging, care) and the logic of the company (performance, efficiency, profit) meet, areas of tension and paradox arise. It is precisely here that the indispensable nature of specific crisis management becomes clear.
Professional conflict and crisis management within a company therefore does not aim for the complete avoidance of tensions. The crucial aim is to make conflicts manageable at an early stage, to recognise critical developments in good time, and to secure the operational capacity of the family, ownership, and business in crisis situations.
Family businesses face particular challenges because the systems of family, business, and ownership interpenetrate and influence each other. As a result, conflicts cannot be viewed in isolation: a dispute over strategy, succession, or responsibility often simultaneously touches upon questions of recognition, belonging, power, or justice.
Crises, in turn, arise when internal tensions, unresolved conflicts, misdevelopments, or external pressures escalate to the point where the company's ability to operate, its stability, or even its existence is jeopardised. Conflict and crisis management in family businesses must therefore consider both levels: addressing tensions before they escalate, and ensuring decision-making capability in existential situations.
Typical peculiarities:
Professional conflict and crisis management, therefore, does not rely solely on quick problem-solving. It creates structures, procedures, and communication spaces to make conflicts manageable at an early stage, to recognise critical developments in good time, and to safeguard the ability of families, property, and businesses to act in acute situations.
In many family businesses, succession is the central area of conflict – and often the trigger or amplifier of business crises. This is because succession processes always affect several levels simultaneously: ownership, leadership, identity, and future vision. Questions of future orientation are linked to the clarification of decision-making responsibilities and legitimacy in the ownership and leadership system.
Succession disputes in family businesses are therefore rarely an isolated problem. They are an expression of unresolved rules, roles and expectations within the overall system of family, business and ownership. To turn succession into an opportunity rather than a crisis, the right strategy is needed.
Escalation doesn't happen overnight in family businesses. Instead, typical patterns emerge that intensify conflicts, damage trust, and block the system's ability to find solutions:
These patterns not only make conflicts more complex, but also increase the risk that they will escalate into a crisis and jeopardise the family business’s ability to function.
Effective crisis management within a company begins long before a crisis becomes acute. Prevention means putting structures in place that make conflicts visible and manageable at an early stage. In family businesses, it is worth taking a broader view: a corporate crisis is often accompanied by dynamics within the circle of owners and family members – for example, when conflicts escalate and decisions can no longer be reliably made or implemented.
Crisis management therefore encompasses not only restructuring and reorganisation measures, but also the question of how decision-making capacity, roles and procedures amongst the shareholders can be stabilised. The Witten model for crisis management addresses precisely this issue by systematically incorporating the „family factor“ into its diagnosis and approach.
When conflicts have reached an impasse, a structured approach is needed to restore the capacity to act. Depending on the situation, the following approaches may be effective:
External facilitation can be helpful when …
Note: Facilitation is no substitute for legal or tax advice – but it can restore the ability to make decisions and communicate effectively within families and businesses.
Crises and conflicts in family businesses can only be effectively addressed if their causes are understood in the context of the intertwining of family, ownership and the business. To this end, the WIFU Foundation brings together academic research and makes it applicable in practice.
This also includes, to become able to deal with conflict: Family-run businesses need rules and spaces in which differing interests can be discussed openly, respectfully and in a way that focuses on finding solutions. This ability to engage in constructive debate is essential for ensuring that tensions are not treated as taboo, but are instead harnessed to bring about clarity and further development.
The aim is to provide orientation knowledge that helps,
Completed research projects:
A conflict is a purposeful dispute between at least two parties with differing interests, objectives or positions. A crisis arises when the ability to act, stability or key decision-making processes come under pressure and can no longer be reliably guaranteed in the short term. Important: Conflicts can They can trigger or exacerbate crises – but they do not necessarily have to.
Conflicts in family businesses often affect several levels simultaneously: family, ownership and the business itself. The overlap between these systems increases the complexity and, consequently, the number of potential sources of conflict – not all of which necessarily escalate, but the likelihood of disputes does rise.
Typical issues include questions of roles and responsibilities, decision-making rules amongst shareholders, expectations regarding involvement or influence, and Preparing for succession. These areas of conflict are interlinked and require a systemic approach to resolve them.
Mediation is helpful when discussions have reached an impasse, sides have become polarised, trust is waning, or key parties are no longer able to negotiate constructively with one another. It helps to organise interests and reach viable agreements. Legal issues should be clarified by specialists in parallel.
Typical warning signs include personalisation – such as placing blame on others, withdrawing or forming factions – repeated failure of discussions, and heated debates about fairness. The sooner such patterns are addressed, the greater the scope for de-escalation.
Entrepreneurial families dealing with crisis and conflict dynamics will find points of contact at the WIFU Foundation for:
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