Negotiating When Business and Family Collide

By on / Daily, Mediation

Basic negotiation skills may seem easy to apply in business situations but what about when business and family collide?

For example, a 69-year-old CEO of a large financial firm that has been in his family for three generations is considering retirement. He has three children who may be interested in taking over the business in addition to several well-qualified senior VPs. How can he address the needs of his company while still maintaining strong family relationships?

Frank Sander and Robert Bordone, in their March 2006 Negotiation newsletter article “All in the Family: Managing Business Disputes with Relatives,” describe several ways in which this CEO can tailor his basic negotiation skills to the highly charged family negotiations he is about to undertake.

First, it may be more difficult to identify the interests of family members given that there may be long-standing underlying negative emotions. Family members may also have very different ideas about the importance of tradition, family hierarchy, and individual roles. Being attuned to sources of trouble is key to successful family negotiations.

Family-business negotiations unfortunately have a limited range of feasible options due to unspoken family dynamics. The constraints posed by family ties can often eliminate otherwise workable options.

Traditional negotiation training emphasizes the importance of establishing objective criteria when attempting to resolve a dispute. However, in family negotiations members may place greater importance on certain criteria than others. For example, one family member may view family traditions as legitimate criteria while others may feel they are far less important. In this case it may be best to hire a third party mediator or arbitrator to help resolve disputes from a neutral position.

Finally, as you prepare for your negotiation you should consider your BATNA, or best alternative to a negotiated agreement, because it may be significantly different from a traditional business relationship. While it may be easy to walk away from a business partnership, it is far more difficult to walk away from your family.

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