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Advantages of Nepotism

Describe about A Research Proposal On Nepotism for The Familial Relationship.

The phrase can mean simply the act of recruiting one’s own members of family. it can as well as imply hiring as well as advancing unqualified or underqualified members of family on the basis of the familial relationships. Whereas attitudes towards nepotism ranges based on cultural backgrounds, it is has remained a delicate matter in business in America. Various businesses and persons regard the act to as unethical, primarily as a result of the skirmish with outdated American values of independence alongside impartiality. 

In businesses management, particularly where it is one’s individual firms, there are various merits alongside demerits of employing friends, family members and relatives.  In the process of operating a business, a person could make a decision that he would wish to recruit a friend or relative. In so doing, one can generate a friendly as well as pleasant enabling working condition in the organization.  Members of the family and friends can bring many useful skills in one’s business. Nevertheless, it can as well unfavorably disturb the business. Appointment of friends and family members might permit for family disagreements as well as contacts to damagingly disturb the way one runs the commerce.

The problem that begs a question is how best one can determine whether nepotism (of employment friends and families) is a good course of action for one and his commerce. There are many benefits and shortcomings of nepotism at the workplace (Dyer 2006). The proprietor must carefully take to account how each negative or positive point impact the business. This is because it might subsequently turn out that in the commerce, it might be calamitous to hire family, relatives or close allies. Nevertheless, the business owner may as well find out that signing friends, relatives and members of family brands the business stronger, and hence a gladder and excited business owner. 


Nepotism may have a range of advantages to one’s business.  Nepotism, in practice, though a quarrelsome phrase in this respective, might be a valuable asset to business owners. This can be cited by an example of Thomas Publishing Company. In this company, by 1998, it had 7 3rd- and 4th-generation family employed for the firm. The third-generation president, Tom Knudson, promoted nepotism amongst their self-governing sales contractors since he trusted it culminated in high stability, performance as well as lasting commitment.

Disadvantages of Nepotism

Nepotism has also been discovered to be viable by Chad Kaydo. For instance, a leading salesperson’s relative might own several of the similar potentials which make him efficacious.  Hiring memberships of the family will hence boots both performance together with retention.  For example, one senior contractor commence employed for Thomas during the 1940s. By 1998, the senior contractor’s spouse alongside his three adult offspring all operated for the similar firm. Even though the son faced a contest when calling on a customer at odds with the senior contractor, he simply as well as politely diffused the scenario utilizing the diplomacy techniques he had already garnered from his dad, the very senior contractor the customer detested, and subsequently gained a superior than normal sale.

During the year 2000, the surge in trade appeared to be shifting towards the policies which invigorated qualified kin and partners based on the impression that decent persons tended to affiliate with good ones. These policies have the potentiality to promote the satisfaction of employees by helping the individuals’ efforts to be balance personal and professional lives. Recruiting members of the family can further provide benefits to firms especially by lowering their health insurance costs.

The owner of the business will already have known numerous of the competences of his families alongside handy associates. This knowledge shall make one assign the relevant duties to individual person on the basis of their discrete weaknesses and strengths. Friends and relatives might have previously become familiar with the company and its respective operations. In this regard, the employer would not essential to spend as much time training new workers with the objective and aims of his company.

Employing one’s offspring can also pass unique and exceptional benefits to the business. This will make the business to have additional accomplished worker whereas at the same time one’s family will be earning additional money. In some cases, there may be also tax rewards to hiring one’s progenies in the firm.

Hiring members of the family has a financial advantages to the business owner. This is because there are tax deductions existing for the business when the proprietor pay for health insurance for a child or spouse employed by him in the business. As a result of the survivors’ benefits under the Social Security being only half of the decease spouses’ benefits, recruiting a spouse especially a non-working one will assist to build up individual of the owner’s social Security earnings.

The proprietor will also benefit since most tax advantages on the federal as well as state level remain predominantly for sole proprietors. For the owners, they ca exempt wages for their spouses as well as children under eighteen. For the children under this age bracket, Social Security as well as Medicare reductions might not have to remain suspended from the respective pay. Moreover, the proprietor’s business are not necessitated to have to make payment of its percentage of such tax also.    

The members of family and close by friends will join a business contract with the owner who is previously in possession of a robust pledge to him individually, and mostly probably to his business. Due to this commitment, the family and friends may be highly eager to work for prolonged periods like sunsets and weekends where needed.

The act of employing friends together with families at workplace also comes with demerits. There are, to be certain, disasters of nepotism. For example, Yale Express, a United States delivery firm became insolvent within 5 years of the 2nd generation taking over the presidency. Also, the Great Atlantic and Pacific Tea Company (A&P) which previously was a leading supermarket chain in the US, became insolvent under its heir (Padgett and Morris 200).

It has been suggested that trouble emerges most often where needs of family and business conflict. This is because the purpose of the family is to care for as well as nurture the members of the family.  Conversely, a business has to generate excellent commodities as effectively, competently and as cost-effectively as possible (Ford and McLaughlin 2010). In cases a firm recruits or promotes an inept member of the family, the rest of the workers will perceive this act as a gross injustice leading to emergence of many complications. The unqualified heir, more difficulty, might just impart policies which drive the firm into the soil.

Nepotism may also broadcast the household discrepancies as well as preconceptions to the other employees or stakeholders in the corporation. It might even make a establishment to lose valued managers thereby making it even hard for the corporation to attract as well as retain high-quality newcomers or recruits. 

A family member or friend can take the advantage of their respective status, as they know that it is harder to fire somebody who is close to the owner of the business. In this regard, the other workers may become envious whenever one hires a acquaintance or family members as they think it is marred with favoritism.  This feeling will be the case where a member of family and friend is promoted over a not relative employee.

Another disastrous disadvantage is where the personal family problems and disagreements between family members and friends are brought to the workplace. In so doing, it will make it uncomfortable for the rest of the employees and hard for wok to get done in the organization (Steier, Chrisman and Chua 2004). The problems in the workplace may also find their way home to the family and they might likewise influence the association with the owners’ friends. It will, therefore, be extra problematic to establish a necessary change in the workplace where it could damagingly affects the business owner’s friends, relative or family member working in the organization.

Nepotism triggers legal concerns in the Western societies. Despite the United States lacking specific prohibition to hiring the relatives, members of a family or friends, studies have discovered that between 10- and 40% of the US companies uphold formal policies barring favoritism. The anti-nepotism norms have been instituted to prevent the hiring incompetent male relatives of male workers.  

Nepotism also has a negative as it is closely tied to discernment matters together with hardheaded anxieties. It is never cleat whether workers with any kind of prejudiced favorites for employment have the capability of surviving in the business market notwithstanding ethical issues.  Nevertheless, nepotism has also been seen in over forty percent of Fortune 500 companies which have successfully done well even though they are family-owned (Pollak 2015).

Some of the ways that nepotism can be reduced have been discovered and presented in this report.  The first potential solution is to ensure that the owner of the business only hire relatives or friends that the proprietor is sure are qualified and competent for the underlying position. Accordingly, the proprietor will not face firing an unqualified friend or relative.

Another possible solution to reduce nepotism is where the proprietor hires a relative, family member or friend on a 3-month trial basis. In this regard, the owner can assess the way they work and if he is impressed he can hire them on a permanent basis (Darity, Dietrich and Guilkey 2001).

Another potential solution to this problem is where the proprietor makes it clear to the relatives, family member or friends that they will be treated in the same manner as any other employee in the organization.

Another solution to reduce nepotism is where the owner of the business make sure that he has a written contact with each relative, family member or friend which explains clearly their respective responsibilities and errands to the corporation alongside their recompense (Carney 2005). A contract that is written can ease the tension as well as make the jobs of the relatives, member of the family as well as friends less personal and more professional.   


In way, recruiting relatives, family or friends is like living with the family. Both negatives and positives exist and it is the thoughtfulness, fairness as well as care with which the proprietor approach situations which will determine whether it is the good or a bad predominating. So long as one’s business does not engage in hiding horses’ heads in the beds of the people, working with one’s family might be extremely positive, productive as well as profitable experience.

The discussion above has highlighted both advantages and disadvantages of the nepotism that is almost balancing each other. Accordingly, it should be a discretion of the business owner to determine whether to employ the relatives, family members and friends. It cannot be seen that nepotism is wrong since there exist many Fortune 500 Companies that are family owned and have been successful.

The bottom line is that the proprietor needs to ensure that a qualified and competent person is employed. Provided that this condition is met, there will be no impression of favoritism and this will serve to ensure that every employee is treated equally. The proprietor needs to ensure that there is effective job description and written contracts that spells out the clear responsibilities so as to ensure that even relative and friends are equally treated.

The business should be very careful when hiring relatives, family and friends. The owner of the business has to create a well thought out job descriptions rather than a mere position of the company as one just looking to hire family members. A thorough job description that objectively clarify the particular knowledge and skills required for the position is a good practice. So long as that member of the family hired is competent and meets the pre-determined requirements as well as receive the commensurate compensation to their roles impression of favoritism (nepotism) will be reduced.

A proprietor wishing to train as well as groom a relative for a given job which they are still unqualified for, should first provide a trainee position with the a title as well as wage which is reflective of this. There is a need to manage the members of the family as well as appraise their performances as one would for any other employees. Literally treat the employment of family members and relatives with transparency and fairness to effectively defang nepotism of much of its worst potentials (Abdalla, Maghrabi and Raggad 2008).

The owner of the business should also be careful when recruiting people who are domestic partners or spouses to avoid both troublesome blurring between work and home life and escape being placed in a bind during vacations or emergencies thereby making issues of pay, advancement as well as termination thorny.


Abdalla, H.F., Maghrabi, A.S. and Raggad, B.G., 2008. Assessing the perceptions of human resource managers toward nepotism: A cross-cultural study. International Journal of Manpower, 19(8), pp.554-570.

Carney, M., 2005. Corporate governance and competitive advantage in family?controlled firms. Entrepreneurship theory and practice, 29(3), pp.249-265.

Darity, W., Dietrich, J. and Guilkey, D.K., 2001. Persistent advantage or disadvantage?: Evidence in support of the intergenerational drag hypothesis. American Journal of Economics and Sociology, 60(2), pp.435-470.

Dyer, W.G., 2006. Examining the “family effect” on firm performance. Family business review, 19(4), pp.253-273.

Ford, R. and McLaughlin, F., 2010. Nepotism: Boon or bane. Personnel Administrator.

Levmore, S., 2011. Efficiency and conspiracy: Conflicts of interest, anti-nepotism rules, and separation strategies. Fordham L. Rev., 66, p.2099.

Padgett, M.Y. and Morris, K.A., 2005. Keeping it" all in the family:" does nepotism in the hiring process really benefit the beneficiary?. Journal of Leadership & Organizational Studies, 11(2), pp.34-45.

Pingree, S., Butler, M., Paisley, W. and Hawkins, R., 1978. Anti?Nepotism's Ghost: Attitudes of Administrators Toward Hiring Professional Couples. Psychology of Women Quarterly, 3(1), pp.22-29.

Pollak, R.A., 2015. A transaction cost approach to families and households. Journal of economic Literature, 23(2), pp.581-608.

Steier, L.P., Chrisman, J.J. and Chua, J.H., 2004. Entrepreneurial management and governance in family firms: An introduction. Entrepreneurship Theory and Practice, 28(4), pp.295-303.

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