THE ROLE OF MEDIATION IN FAMILY BUSINESS CONFLICT MANAGEMENT SETTLEMENT

Abstract

The article deals with the concept, features and main directions of mediation process in family business conflict management. The share of family companies is huge in the world economy. The quantity of family business grows year by year worldwide. Its included different forms of ownership and different company’s sizes - from small businesses to large corporations. The process of conflict management in family business is a more complicated process compared to the non-family type of business. The complexity of management is determined by the fact that it is everything valuable is mixed - relationships, family history, family values and money. Family businesses like any other type of business deal with conflicts between owners who are also members of the same family. The mediation process is effective instrument on the way of successful conflict management. It is more effective than alternative court process. If the family goes to court and the decision in court is made one part loosed - it can lead to the destruction of the roots of the family business and whole family. This is why family business solves business problems through the courts only as a last step. Its easier to solve problems via mediation. A mediator working with a business conflict in a family business must remember two systems that are intertwined within the company - the business system and the family system. Due to this, mediation in family business combines approaches of family mediation and commercial mediation. The majority of family businesses don`t reach the stage of development “the transfer to the 2nd generation”. The main purpose of the article is to analyze the main features of the conflict in the family business, types and levels of conflict, as well as highlight important factors that may affect the effectiveness of mediation. The study of the low rate reasons has not been conducted, but the author is convinced that this is due to the fact that the family business has a large share of unresolved conflicts that lead to the destruction of the business in the first generation. The article is devoted to the analyses family companies, unique reasons of conflicts in family business and ways to solve them through the mediation process. International commercial fund data has been used within the framework of the disclosure of the scientific article. Such method as generalization and comparison have been used. Separately, the author provides recommendations to mediators on how to increase the efficiency of the mediation process and increase the number of resolved conflicts through peace negotiations with the family that owns and / or manages the company.