Conflict dynamics and preventive strategies in family firms: insights from ethnic entrepreneurial communities in Pakistan

Purpose This paper aims to examine the causes of conflict in family firms within Pakistan’s leading ethnic entrepreneurial communities and identifies potential conflict prevention strategies. Prior research highlights the significance of these firms’ philanthropic nature in sustaining social cohesion across the community. However, internal conflicts can disintegrate family firms and influence the long-term community survival. Therefore, this study investigates the underlying sources of conflicts within family firms and explores strategies for their prevention. Design/methodology/approach This qualitative study uses Eisenhardt’s research strategy within the social constructivist paradigm. Data from 24 in-depth interviews, memos, newsletters and community periodicals are analyzed to achieve the research objective. Findings The upbringing environment and religiosity are key factors in preventing conflicts among family members in family firms. Rational measures, such as professionalizing the business environment and establishing a family constitution, also contribute to conflict prevention. However, their effectiveness may be limited without strong social bonds. Additionally, lifestyle choices influenced by contemporary consumerist trends appear to create distance among family members, increasing the likelihood of conflict. Social implications The findings highlight the need for a holistic approach that acknowledges the multidimensional and long-term causes behind conflicts and their preventive strategies in family firms. Further, the inherent tension between a family’s socioemotional dynamics and a firm’s rational structure can be mitigated when both are aligned with a moral purpose rooted in religious beliefs and values shared by family members. Originality/value Existing research does not capture the perspectives of family firms within Pakistan’s entrepreneurial communities, or explore preventive measures embedded in upbringing, lifestyle choices and religious worldviews. This study addresses this gap, offering novel insights into conflict prevention in family businesses.