Your Family’s Mental Model Might Be Fueling Its Conflicts

Different ways of thinking shape how families make decisions, resolve tensions, and pass leadership across generations.

Every family business has its own way of seeing the world. Some center around a charismatic founder, others operate as a sibling team, while still others function more like an investment group. These different ways of thinking—what we call mental models—shape how families make decisions, resolve tensions, and pass leadership across generations.

Mental models shape how the family interprets its role, its relationship to the business, and even its expectations of one another. While often invisible, these internal logics profoundly influence a family's ability to thrive—or fracture—over time.

Through decades of research and advising multigenerational families, we’ve identified four dominant models that guide how family businesses function: the Patriarchal Family, the Managing Family, the Controlling Family, and the Investment Family. Each comes with its own predictable patterns of conflict—and each requires different strategies to sustain cohesion.

Four Lenses, Four Logics

1. The Patriarchal Family – Often found in founder-led businesses, this model revolves around a central figure—usually the patriarch—whose word is rarely questioned. Decisions are highly person-centric, and the business often reflects the personality and preferences of this leader. Succession becomes difficult when the leader is seen as irreplaceable.
2. The Managing Family – Here, multiple family members hold operational roles and function as a team. Collaboration is key, and the model often reflects a strong post-founder identity. Yet even in this model, disputes can arise over who is best suited for leadership, how decisions are made, or which family branch is best represented.
3. The Controlling Family – In this model, family members no longer work in the business but serve on boards and oversight bodies. Their role is to guide strategy and preserve values. As the family grows, so does the challenge of maintaining alignment and defining legitimate representation in decision-making bodies.
4. The Investment Family – Families at this stage often have little direct connection to the original operating business. Their focus has shifted to jointly managing and growing wealth. While this can work well, cohesion is vulnerable when the only binding force is financial return—and even that can fracture if branches or generations disagree on investment priorities.

Predictable Conflict, Preventable Damage

Each mental model brings with it a distinct pattern of conflict—conflict that is not random, but rooted in how the family sees itself and its relationship to the business. 

In patriarchal families, conflict often stems from poor succession planning. The founder may struggle to let go, not out of ego, but out of a deep identification with the business itself. The next generation may either feel squeezed out or unprepared. The longer the transition is delayed, the more difficult it becomes to honor the founder’s legacy while making room for new leadership. Without a clear, inclusive process to identify and prepare the next leader—especially when more than one family member is qualified—families risk breeding resentment and disengagement.

Managing families face a different tension: how to balance fairness and meritocracy. When several family members work in the business, decisions about roles, promotions, and compensation can stir competitive undercurrents. The desire to support “our own” can overshadow objective assessments. Families without agreed-upon criteria for evaluating competence and contribution often find themselves in politicized disputes that hurt both relationships and performance.

In controlling families, the shift from operational to oversight roles introduces another layer of complexity. Board appointments, voting rights, and representation by family branch or generation can trigger conflicts over legitimacy and inclusion. Identity becomes untethered from day-to-day business involvement, and without intentional strategies to reinforce shared purpose, the family risks splintering into factions. Decisions such as whether to sell shares, exit the business, or bring in outside board members can become flashpoints.

Investment families—those furthest removed from the founding business—wrestle with the most existential of conflicts: what still connects us? Shared financial interests are not always enough to sustain cohesion. Disputes may arise over risk tolerance, ethical investment screens, philanthropic priorities, or simply the level of transparency expected from the family office. The line between “shareholder” and “relative” begins to blur—and, in some cases, break.

What is common across all these models is the presence of forces that pull families apart over time, turning ordinary disagreements into entrenched divisions. That is where governance and strategy come in—not only at the company level, but also within the family itself. Constructive governance does not eliminate conflict, but it provides a framework for navigating it with clarity, respect, and accountability.

Strategy Starts with Family

To stay cohesive across generations, business families must be as intentional about managing the family as they are about managing the business. A well-crafted family strategy provides the scaffolding to hold relationships, rights, and responsibilities together as complexity grows.

A strong family strategy is not a static plan—it is a dynamic process that aligns the family’s evolving identity, values, and goals with the structures and tools that support them. This might include clear entry and exit rules for the business, governance bodies like a family council or owner assembly, education programs to build ownership competence, and agreed-upon procedures for addressing conflict.

One often overlooked component is the establishment of a shared protocol for conflict resolution. The most effective families don’t wait for a conflict to arise—they co-create a process during calm times that can be relied on when tensions rise. This process might include a tiered approach: informal internal discussions, engagement with a non-family facilitator, formal mediation, or ultimately arbitration if needed. When such protocols are defined in advance and endorsed by the broader family, they create psychological safety and reduce the risk of emotional escalation.

Families may also benefit from appointing a “family integrator” or a dedicated committee—sometimes called a family continuity team—that proactively nurtures connection and manages the family’s internal affairs. In growing families, this body can serve as a kind of center of gravity, offering continuity as new generations come of age and older members step back.

Education plays a critical role here. Ownership competence isn’t just about financial literacy—it’s about understanding the rights and responsibilities that come with being a shareholder in a family business. When all family members—whether active in the business or not—understand the rules of engagement, they’re more likely to participate constructively and less likely to default to personal grievances when disagreements occur.

Ultimately, the goal of a family strategy is not to eliminate difference or disagreement—it’s to ensure that difference doesn’t devolve into dysfunction. It’s to provide the structure and shared language necessary for productive dialogue, principled decision-making, and long-term unity.

Final Thoughts

Always remember: Family conflict is not a sign of failure. It is a sign that the business and the family are growing and changing. With awareness, structure, and the right mindset, families can not only resolve conflict—they can also emerge stronger from it.

By understanding the mental model at play, families gain the language and clarity to tackle challenges at their roots—not just their symptoms. Rather than reacting emotionally or falling into old patterns, they can respond with intention. And by doing so, they reaffirm something deeper: that long-term unity is not about avoiding tension, but about knowing how to navigate it together.

References

Schlippe, A. v. & Rüsen, T. A. (2024): Conflicts and Conflict Dynamics in Business Families. Dealing with Internal Family Disputes. Cham: Springer

Rüsen, T. A.; Kleve, H. & Schlippe, A. v. (2021): Managing Business Family Dynasties. Between Family, Organisation, and Network. Cham: Springer

Rüsen, T. A.; Schlippe, A. v.; Groth, T. & Gimeno, A. (2020): Mental

Models of Family Businesses. How Business Families see themselves and their connection to the Family Business. Practical Guide Series. Witten: WIFU-Foundation

Rüsen, T. A. (2020): Ownership competence in business families. The success factor for long-lasting family businesses. Practical Guide Series. Witten: WIFU-Foundation