Keeping right balance is tough when it's all in the family

By ELLEN READ

Working with family members can be a recipe for disaster, says a survey by chartered accountancy firm Grant Thornton.

The tensions that could arise when families owned and ran a business were well known around the world, Auckland partner Les Corder said.

"We wanted to investigate the issues that concern owner-managers to the extent that they have nightmares and how they balance the often conflicting needs and demands of the family and the business," he said.

While not suggesting the answers, the survey found that managing the overlap between family and business requires an emotional detachment that many involved find hard to achieve.

The issue of children's involvement in the family business featured strongly in the results.

"It's clear that most owners feel that children are required to earn their place in the business if they are to be involved at all. Many felt working with family members was a recipe for disaster," Corder said.

That said, it was generally admitted that when family members were involved in the business and abided by commercial structures, the business was stronger, he said.

The survey was part of an international initiative by the worldwide group. In New Zealand and Australia the research was conducted by the University of Canterbury.

Some of the local results include:

* A significant number of respondents believe the business is stronger with family members involved (53 per cent compared with 44 per cent and 72 per cent in the UK and Australia respectively).

* Of the family business respondents who had children (86 per cent), 26 per cent had at least one of their children working in the business.

* Most respondents (62 per cent) felt that children should work in the business only if they wanted to.

* 72 per cent of respondents had worked elsewhere before joining the business, 17 per cent joined after school, 7 per cent after professional training; and 4 per cent after university.

* Some New Zealand responses differed from the Australian or UK research. For example, children worked in family businesses in 26 per cent of NZ cases compared with 90 per cent in the UK and 48 per cent in Australia.

Corder said attitudes to the family and the businesses were as much about emotion as about rationality.

"These businesses require a pragmatic approach to manage their continually changing environment, which is critical to the success of the family."