The decisions that any business partner makes can affect their company and, therefore, the finances of their partner(s). Sometimes, each partner makes certain types of decisions. Other times, one partner may handle much of the day-to-day management of the company while another does long-term planning.
Sometimes, the decisions that a partner makes end up causing a conflict that damages the working relationship between the partners. Communication and conflict resolution skills can help address such issues in many cases. Occasionally, they could do real damage to a working relationship.
What types of decisions might lead to disagreements between those who run a company together?
Employment decisions
The choice to hire, promote or terminate a worker can be controversial even within the company. One partner may become angry at a hiring decision that they view as nepotism, for example. Other times, issues may arise because of a decision to terminate a worker without discussing the matter first. Decisions about staffing made without the direct input of a partner can potentially lead to major disputes in the future.
Vendor or client decisions
Perhaps the partners run a roofing company, and one partner signs off on giving a client a major discount that eliminates the profit margins for a project. Perhaps they sign an agreement with a vendor that commits the company to overpay for necessary materials.
Decisions related to vendors and service providers often involve a lot of research, making it important for partners to discuss them in case one partner has information that is not readily available to the other. Decisions about client and customer arrangements can also be sources of controversy, as they can cost the company money or put its reputation at risk.
Decisions to sell or merge the company
Sometimes, an outside company or a potential investor may approach one partner and solicit their approval for a major business transaction. They may technically have the authority to commit the company to a merger or approve an acquisition, but doing so might frustrate their partner and lead to a protracted dispute.
Choices regarding the long-term future of the company and the niche that it occupies within an industry typically need to involve everyone in positions of authority and those who have invested substantially in the organization to ensure no major conflicts and derail the transaction or damage relationships. Unfortunately, many partners make decisions that seem intelligent, only to suffer the professional and interpersonal consequences later.
Protracted partnership disputes may begin with a decision and may ultimately do real damage to an organization. In some cases, litigation between the partners may be the only way to resolve a disagreement about the organization. Thankfully, those who structure their businesses carefully and communicate proactively can reduce the risk of simple decisions damaging their partnership.