Dangers of Poor Employee Communication in a Family Business

“We turned her down, and later found out she had approached the union, to stage the union drive, in order to win her job back.”

As family business entrepreneurs, we often tend to manage by hunch, figuring things out as we go along, especially in the earlier startup years. Many of the issues we face as our businesses grow; we plod through, without much advice from outside advisors. Surprisingly, most of the time it works out well. For our family business, this time it didn’t.

We had been in business for about 15 years, and our compensation plan was pretty basic; salary plus a holiday bonus. The bonus was pretty much automatic. One year we decided to revise the bonus portion, realizing that as longer-term employees’ compounded wages increased, it was increasing the bonus portion disproportionately. We decided to cap the bonus for the highest paid managers.

One of our long-term managers became upset with the new bonus program and decided to leave the company.

About six months later we had a group of employees, petition for a union organizing More…

Managing Complex Family Relationships in the Family Business

 UMassRelated Matters Newsletter
Summer 1995

John F. Baugh Center for Entrepreneurship
Institute for Family Business
Baylor University

For Nancy Upton, the key to success in wrestling with the issues that arise in a family business is simple: set up formal mechanisms to grapple with the issues, and get as much as possible written down.

Upton, Director of the John F. Baugh Center for Entrepreneurship and the Institute for Family Business, both at Baylor University, spoke to the Family Business Center May 12, under the elegant crystal chandeliers and stained glass windows of the Yankee Pedlar Opera House.

Families and businesses, she points out, often have conflicting sets of needs and values. Yet, in a family business, the two areas overlap. Formalizing the corporate culture reduces the tension inherent in that overlap. More…