Most people do not like to deal with conflict in relationships. Conflict worsens when you're not clear in what you really want, and don't listen to what the other person is really trying to say.
I read in Gallup's book on employee engagement that an employee's view of the company they work for has everything to do with whom they report to. Even if you have a great culture, history, reputation, etc., if some of your people are working for an idiot, those people will not be engaged and they will think poorly of the company. The power supervisors at all levels have to ruin or make your culture and therefore employee engagement is huge, because employee engagement can make or break your company. That’s why I say you need to measure it.
Many contractors have at least one family member “in the business.” The company I ran for 15 years, Roth Bros. Inc., had the family recipe contained in the name of the company. We had brothers working for brothers, husbands working for wives, sons working for fathers, daughters working for mothers, etc. I have also spent time with several CEOs who run businesses with similar familial situations.