Managing the effects of relationship conflict on the achievement of family-oriented non-economic objectives: the moderating role of family governance

Although prior research has examined the effect of relational conflict on the financial performance of family firms, the effect of such conflict on the family’s achievement on socio-emotional objectives has been largely overlooked. Further, whether family governance can reduce the negative effects of relational conflict is not yet fully understood. As a consequence, we examine how family governance moderates the effect of relational conflict on the achievement of family-oriented non-economic objectives (FO-NEOs). Regression analysis of data collected from over 500 Australian family firms suggests that relational conflict between family members in the business has a significant negative effect on the ability to achieve FO-NEOs, and family governance can assist in reducing this effect. However, our results also suggest that family governance alone is not sufficient to overcome the significant negative effect that relational conflict has on the achievement of FO-NEOs. Implications for research and practice are explored in the paper.