Case 13: Small Family Business: The Son-in-Law
Address the Root Causes
Barbara Hollander
Two key root factors are contributing to the tension here the triangled relationship
involving Ed, Jim, and Eric, and the family rules.
Ed needs to recognize that in providing for equal compensation and stock
distribution, he is following a pattern set by his father, when, instead, he could explore
other options. He also needs to see that he avoids choosing a successor out of fear of
confrontation over the decision. However, his indecision only increases the
competitiveness between Jim and Eric instead of encouraging them to work as a team.
Use This Opportunity
Robert B. Williams
Jim s resignation has opened the door to frank communication. I would encourage Ed
to look at this as an opportunity and to approach it constructively.
If Jim s concerns are not openly discussed and resolved, the business and family will
suffer. Ed might talk with Jim and Eric about implementing an incentive or cafeteria
compensation plan where levels of performance would be set and bonuses awarded
he remains an executive. The family also should consider inviting Sarah to take a more
active role in the business, particularly if she is to be an equal owner.
As an alternative, Ed could leave controlling stock interest to Jim and equalize the
value of Sarah s inheritance with nonbusiness assets.