In-laws in family businesses

In-laws hold a unique position in family businesses – both those who work within the business and those who do not. This unique position has an impact on the family and business systems as well as the interaction between such systems.

A professionally managed business is inclusive- Roberta Fenech

When in-laws work within the business, some questions that may arise are whether or not they form part of the family, whether they should be subject to the same treatment as family members or whether they should be treated differently. Despite this ambiguity, the study of family business has failed to account directly for their role and position in the family business.

Experiences vary. There are in-laws who are a tremendous asset to the family and the business while others may find it difficult to understand the central role the business plays in the family’s culture and value system. In-laws who choose to work in the family business and who are not treated equally to family members is a situation that should not be under-rated. They tend to work doubly hard to prove themselves but often do not perceive that they reap the same benefits that family members do. There are many fears, not always totally unfounded, of the problems that in-laws can bring into the business and subsequently, the family. As the main objective is to maintain harmonious relationships many look at the in-law as an additional complexity that could be avoided. It appears that many rules can be bent for family members, but there are second thoughts for in-laws.

Most in-laws, irrespective of whether or not they work in the business, who were not brought up in business-owning families experience a culture shock. Most business-owning families have used the business as the centre of conversation for decades. If in-laws are not closely involved in the business they may feel left out.

In-laws who come from a non business-owning family may lack the experience to prepare them for the dominance of the family business. Difference in values and expectations may cause marital conflicts. A business-owning family’s expectations on holidays, free weekends or regular dinner times may lead to real strain. Sometimes in-laws may resent the influence of the business family over their lifestyles.

Conflict is part of family life. Whether involved in the business or not, in-laws may view matters differently. The probability and frequency of conflict increases as the family expands.

Fear of disagreements or conflicts can make families resist change in a bid to avoid conflict. Recognising and grappling with conflict is a sign of strength and progress. The family’s skill in dealing with conflict openly and directly affects the impact conflict has on a family business.

The possibility of divorce is one of the main demotivational factors for in-law participation. Prenuptial agreements can cause animosity with in-laws. Family rules and regulations are best established beforehand, as part of the family constitution, so potential in-laws learn about such policies.

In-laws play a very important role in successful generational transitions. In-laws who do not directly work within the family business still play the important role of educating the next-generation business leaders. The way in-laws perceive the business and the messages they send to the next generation, both implicitly and explicitly, help to shape the next generation business leaders.

Foster open communication, educate in-laws about the family business, involve them in regular family meetings and establish times when discussing the family business is off limits. Some families develop a code spelling out what behaviour is encouraged by all family members. Flexible family boundaries, excellent parent-child relations, affectionate and caring siblings and the ‘match’ between in-laws’ personality and the background of the family have all been found to lead to positive in-law participation.

A professionally managed business is inclusive and looks towards in-laws as having full participatory roles. This expectation is often expressed and information is shared. In-laws, in turn, reciprocate with loyalty, dedication and commitment.

Roberta Fenech is an associate consultant for EMCS group and a lecturer at St Martin’s Institute of Technology.