Real causes of family conflict

Dear Prof. Soriano,

Happy New Year to you and your family!

I am a regular reader of your column for the last two years and I always look forward to reading your very informative weekly article.

It has been a habit of sorts to share your weekly article to friends who are also working in their respective family businesses. We even went one step further, we collated your articles and use them as self-help materials during informal gatherings. It has been a wonderful guide for all of us.

We hope and pray that you never stop sharing your wealth of knowledge to family business owners and exude the same passion and advocacy for many more years!

Sincerely,

Rey

THE letter was sent to me right after the holidays but I have observed that in the recent past, I continue to received countless letters bearing the same message but with varying degrees of fear, anger, agitation, anxiety, uneasiness and the feeling of hopelessness coming from the letter senders.

So instead of responding to each letter, I decided to consolidate and make a story with a similar theme using another industry, different names and number of siblings to hide the identities of the letter senders.

Modified story of Rey : A volatile conflict waiting to explode 


I have been wanting to email you since October but due to the pressures of work and the long holiday preparation, I never had the opportunity. Lately, through the advice of my friends and the stress this new problem has been causing me, I finally decided to email you about our current situation.

There are five siblings (Rey, Ralph, Rowen, Rachelle, Raymond) in the family and we are all active in the family business. The word active is relative though. You will find out in the succeeding paragraphs.

After heeding your advice (reading from your articles) related to aligning the ownership structure, I and my brother Raymond took the opportunity during the Christmas celebration to talk to our mother primarily on the need to start the process of working out an ownership transfer.

For your reference, my father passed away a year and a half ago and my mother suffering from various ailments, is in her mid-70s. With her weak condition, we thought it best to tell her about our plan.

Conditions for ownership transfer

When we explained to her about the ownership transfer, we were both surprised that she readily agreed to start the process subject to three conditions:

a. That I will be officially appointed as the successor, following the desire and wish of Papa. It was clear from the start when I was invited by Papa to join the family business more than 19 years ago. Being the eldest and the most experienced, Papa trained me in practically everything related to running the business. My siblings collectively acknowledged this and it was just a matter of time when I will end up taking over the mantle of leadership. My mother’s statement made it official.

b. The family business must continue and the next generation (second generation) will ensure that the legacy will transition smoothly; and

c. Ownership of the business will be divided equally at 20 percent per sibling. This last condition floored me and this is the very reason why I finally summoned the courage to write you a long email.

Being fair is never about equal ownership

My mother insisted that we each own 20 percent of the stock. Her insistence of equal ownership shocked me. I was unable to think nor react because I was so upset!

Raymond felt bad as well. He even tried to argue and justified why I should own more shares but she stood her ground and even reminded both of us that it was Papa’s dying wish with the hope that it will create harmony in the business.

To be continued.

(esoriano@wongadvisory.com)

***************

Prof. Soriano is a National Agora Awardee for marketing excellence, an ASEAN family business advisor, book author, and executive director of ASEAN-based consulting group, W+B Strategic Advisory. He is also an international business lecturer and professor at the Ateneo Graduate School of Business.
Prof. Soriano will be in Cebu in February to deliver talks to family business owners. The series of talks are part of W+B Cebu’s advocacy campaign related to family and business governance for SMEs. Those interested to attend should call the W+B Group 09228603186 and look for Ms. Jen. Registration is a requirement.

 

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