It is commonly considered that family companies usually demonstrate greater commitment to their business and engagement in various corporate activities. For this reason, family-owned enterprises may significantly outperform their competitors. However, in the case when family dynamics are negatively charged, it may be hard for the management to balance between the corporate and family issues. The case of the Binghams and the Louisville Courier-Journal Companies is a vivid example of how family relationships may adversely impact organizational sustainability and growth.
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The analysis of system dynamics in the company reveals that there is no alignment and integration between family, ownership, and management subsystems. There are significant differences in how different family members perceive the current administration and ownership. Moreover, it is clear that the assigned board directors, Sallie and Eleanor, did not agree with their positions in the company and expressed their disagreement through questioning Barry Jr.’s leadership. The given relationship problem indicates the flaw in the firm’s succession pattern – Sallie and Eleanor show a rebellious behavior which is considered inefficient in terms of succession.
It is clear that family members do not communicate effectively. As it is observed in the text, the family was “capable of communicating about what ailed it only in print, never face to face.” The behavior of Mary Caperton, the wife of Barry Sr. and the mother of Barry Jr., illustrates this communication deficiency in the most vivid way. She frequently expressed opinions contradictory to Barry Jr.’s suggestions on the editorial pages. She did not warn him about it and never discussed possible options with him. It means that there was no dialog between the management, the employees, and the shareholders. Such behavior would be unacceptable in the regular, not family-owned enterprises. Mary’s actions can be regarded as a provocation aimed to undermine Barry’s leading position in the company. Her behavior also points at the blurred system boundaries as the employees and the managers show the inability to discern the family conflicts and issues from the corporate problems and these issues create many barriers to successful organizational performance.
It is possible to conclude that the major sources of the organizational problems and family conflicts were poorly developed communication and the inability to manage family/company resources. The constructive manner of behavior and conflict management is a crucial factor in organizational success as it helps to create a friendly working climate and improve the overall corporate culture which, in turn, increases individual employee efficiency and productivity. Secondly, according to the principles of the Resource-Based Theory, the unique capabilities of family members should be recognized and contributed to the development of organizational competitive advantages.
It seems that Barry Jr., as well as the other shareholders, failed to implement family talents and skills in an effective way. It could be recommended for the management to consider the previous professional experiences of family members prior to the selection of the succession plan as well as the allocation of responsibilities within the company. For instance, since Barry Jr. was more interested in the radio business than in the print media, he should be assigned as WHAS manager, while Sallie, who was familiar with writing and publishing, could be promoted to the position of a manager/president of the Courier-Journal. Additionally, they could implement Eleanor’s knowledge in filmmaking to expand the business and target some unfamiliar business areas.