When dealing with family issues, business issues, and ownership issues, an informal management style will not suffice. Carolyn M. Brown writes for Inc. with seven tips to best maintain a family business.
Family Comes First, Sometimes
Here are the rules, in quick succession: Only put family members on payroll if they make a tangible contribution to the business, and make their job expectations clear and inarguable. Think of family and non-family employees as all the same and promote regardless of such status. Do not punish or praise someone or exempt someone from punishment or praise as a result of familial relation. Make it apparent to all employees that family does work within the business, but keep all employees equally abreast of business happenings. Do not confuse family and business needs, meaning do not charge the family vacation as a business expense. Outside of work, let work rest and stick to talking to family about family things. Lastly, use a “family council” to address family matters; a family council may consist of owners who are not necessarily employees, and this council’s membership can be revised every couple years to account for fairness and new generations.
For elaboration on these seven rules, you can view the full article here: http://www.inc.com/guides/201102/7-rules-of-conduct-for-family-businesses.html