Decreasing the Effects of Relationship Conflict on Family Businesses

Abstract

The study examines how family climate counteracts the constraints in the business system created by relationship conflict that is known to negatively affect business outcomes (firm satisfaction and firm performance). Cross-sectional self-reported data were obtained from a nationally representative sample of 392 Austrian family businesses. The core tenet of sustainable family business theory provided the theoretical underpinnings for the study’s hypotheses. Family climate includes measures of cohesion, adaptability, and open communication. Results demonstrate the negative effects of relationship conflict on firm satisfaction and firm performance. Adaptability was significantly related to firm performance. Cohesion and adaptability moderated the negative effect of relationship conflict on firm satisfaction; adaptability moderated the negative effect of relationship conflict on firm performance.