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December 23, 2009

Conflicts in International Business

There have been many cases of conflict in businesses similar to the one of the Ambani brothers. Situations where the conflict between the brothers have threatened the very existence of the business. Some of the classic cases of conflict in international business are Maritz, Koch Industries, Gallo, and Mondavi to name a few.


Maritz is a watch and gold jewellery wholesaler. It was started in the year 1894 by Edward Maritz. This company has been a victim of family feud for over 3 generations. The business was taken over by James and Floyd Maritz from their father Edward in the year 1929. But soon they divided the business among themselves as it was impossible for them to co-exist because of their completely opposite personalities. The business of James was taken over by his sons Bill and Lloyd. They too realized soon that they could never run the business together and decided to split the business. Lloyd completely mismanaged his business and became bankrupt, whereas Bill had turned his business into a great success with turnovers close to $1.35 billion per year. Bill took his sons Peter, Philip and Steve into his business. Steve was the heir apparent which did not go down well with his other sons. They stared creating havoc in the organization. In 2000 Bill was forced to dismiss Peter and Philip from the BOD and vested the ownership entirely on Steve. Peter and Philip sued the company and questioned the actions of their father. The dispute over the ownership of the company still prevails.

Koch Industries:-

Koch Industries is one of the leading private companies of U.S. It is a $35 billion oil conglomerate. The business was started by William, Fredrick, Charles and David Koch. The net worth of the family is around $6 billion. In the year 1983 William Koch decided to step out of the business and he sold his shares for $1.1 billion. He claimed that the financial statements of the company were rigged and that his shares were worth another $62 per share. William and Fredrick together sued the company for fraudulent accounting practices. The plea was rejected after 13 years. Even today William and Fredrick are not in speaking terms with Charles and David.


E & J. Gallo winery is one of the famous wine manufactures in U.S. It started by Ernest and Julio Gallo. Joseph Gallo their younger brother was a rancher and farmer who had grown rich by selling grapes to his brothers, E&J. Gallo winery. In 1983 Joseph Gallo opened as cheese factory named after his family near his home town Livingston. The winery sued Joseph for trademark infringements as he had used the name of the winery “Gallo” for his factory. Joseph in turn sued his brothers claiming ownership in the winery. Both the cases were ruled in favour of Ernest and Julio Gallo.


Robert Mondavi was responsible for making US wine global. Mondavi is one of the leading manufacturers of wine in the world. It was started by Robert Mondavi and his brother Peter Mondavi. The brothers have been feuding ever since their childhood. Robert had taken the company to the global markets and was majorly responsible for the success and growth of the company. Peter was becoming more and more jealous of the success of his brother. This was instigated further when Robert and his wife were invited to the White House for a private party. Robert saw this as an opportunity to boost the image of his company; hence he decided to dress to the occasion as he was representing his company. As a status symbol he bought his wife an expensive fur coat. This did not go well with his brother. He accused Robert of dipping into the till to buy the coat. This led to both a physical and legal dispute between the brothers. It split the family into two. It has been four decades now, still the wound has not healed. This led to the conversion of Mondavi from a family business to that of a public limited company.


Conflict on the whole is an inevitable aspect of every organisation, family or any other personal/ impersonal institutions. There have been discussions on how to avoid a conflict as well as on how can a conflict be beneficial for any situation. The responses have been numerous and varied. It is evident that there are no cut & dried principles to avoid or resolve a conflict because every conflict is unique on its own. Also there are no measures to weigh how much conflict is beneficial and how far henceforth is malignant. On a general note, it can be said that conflict is unavoidable but managing conflict is of crucial importance. If not steered in the right direction at the right time (if the harmful implications are not recognised at the earliest) conflict can lead to hazardous situations which may prove to be dangerous for the future of the institution in the long run.

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