Ethics and Ethical Issues with Nepotism in Business - Research Paper Example

Ethics and Ethical Issues with Nepotism in Business Nepotism is totally against business ethics and it refers to situationwhere the business manager prioritizes hitting family members over qualified non-family members. As much as it has raised concerns, it is not completely unethical to employ family members. The nature in which a business conducts its standards of employment, nature of the business as well as consistency in policies can be used to rate the ethical nature of nepotism. The reason why nepotism has become a controversial issue is that it contradicts typical customs and rules in employment, which advocates for employing the most qualified personnel for job vacancies. Nepotism may make someone hire a relative at the expense of someone who has work experience as well as stronger education base. However, sometimes the relative is the most qualified but it will still give the impression of nepotism. The ethics of nepotism in business go hand in hand with business structure. The business structure can indicate that the business is family owned. This shows that that its establishment was under sole proprietorship or partnership meaning that the owner owns and controls it. The owners can also combine with their family members who act as partners. In some case however, the partnership is not family owned. This way, nepotism is more questionable when one partner decides to employ his family members yet other partners have an ownership stake interest in the operation. Many businesses all over the world are family owned businesses. They play an important role in the economic development in their respective countries. Family businesses face one critical problem, which is the issue of nepotism. In developed countries, measures have been taken to curb nepotism whereas in developing countries, it is part of their daily lives (Sidani, Yusuf & Thornberry 69). In today’s business life, nepotism is evidently rampant. Workers in such family businesses compete with the favored personnel; it is hard to for them to be promoted because there are not awarded according to the abilities and knowledge. This environment therefore portrays unfair competition and it will have negative effects on nonfamily personnel. A critical sufficient study that analyzes such an environment is essential in order to understand the topic on family firms, job satisfaction, negative word of mouth, intention of quitting the job and their relationships with nepotism (Sidani, Yusuf & Thornberry 70). Qualification factors that employers should consider include knowledge, ability to success, educational level and they should be considered when promoting staff. Nepotism however refers to a scenario where they consider blood ties. This is common in family firms where the owner or manager employs family members without considering their abilities and contribution. The core reason for such a move in most cases is that the employers prioritise trust over expertise. In most cases, family members are given management positions because the owner trusts them, as they are his or her relatives. However, this causes a motivation crisis in employees who have the professional qualifications. In return, because they are working under someone with no professional expertise, there performances tend to decrease. This is normally because they are not satisfied with their jobs and this eventually will lead to decreased productivity rate of the organization. In the end, talented and skilled mangers tend to leave the organization and this may contribute to failure of the business. Nepotism also creates obscurity about the source of the success achieved in the organization. This is because employed family members cannot really know whether the success the get from the business is from their own efforts or is from the fact that they succeeded since they have a relationship with the owner. Family dispute can also arise due to nepotism. Family members or siblings can fight over managerial positions as they compare their superiority. Mixing family issues and disputes with business activities will definitely affect its performance. This is because the will have to consider their disputes in making the business decisions hence many compromises, which may lead to failure of the business. One reason why nepotism is applied in business is that it is a strategy, which ensures that the family name is retained in power (Bute 187). This acts as a limitation to professional behaviour, democracy in addition to institutionalization. The fact that nonfamily members contribute a lot but end up taking a little share makes them feel that they are working in an unfair environment. Sometimes in family firm, where managers come from both family members and nonfamily members, a wage system as well as performance criteria is created to favour the family members (Bute 187). This causes demoralisation of the managers as well as lack of confidence. They lack confidence because as much as they work hard, the family members will be awarded more than them. Nepotism has pervasive negative connotation since it has a negative impact on the effectiveness of a business. Nepotism narrows the growth of a firm to from going beyond a certain size. This is because of the fact that the firms chose to employ relatives instead of qualified personnel. Qualified personnel are always innovative hence, they come up with strategies, which will help the firm to develop and expand. However since they employ family members, the will continue using the same strategies which their fellow family members used hence they will not progress. Managers will not monitor organization behaviour properly because some employees are family members to the owners and they will stay regardless of their mistakes (Bute 188). The firm does not properly appreciate talents of nonfamily members because however talented they may be, the family members still take the credit of the work and they will get the promotions. Moreover, nepotism creates many other problems such as lack of accountability and it promotes unequal distribution of wealth and opportunities. However, in some countries such as China, Japan, Thailand, they have experienced growth in their business activities over years despite the fact that they practice nepotism. A country like South Korea has come up with a productive and efficient economy despite the fact that nepotism is practised there (Bute, 188). They have managed to overcome the negative effects on nepotism as by ensuring proper distribution of income as well as a positive role of government institutions in promoting growth. However, scholars have attributed success of nepotism in some countries where the business activities work under relationship culture like China but it cannot wok where there is a cross-cultural difference. In the western culture, the societies operate under rule based cultural polices where nepotism has a negative connotation. In such societies, nepotism cannot is strictly discouraged hence they cannot practice it. References Bute, Mustafa. Electronic Journal of Social Sciences. 2011, Vol. 10 Issue 36, p187-203. 17p. 1 Diagram, 14 Charts. Sidani, Yusuf M., and Thornberry, J. "Nepotism in the Arab World: An Institutional Theory Perspective." Business Ethics Quarterly 23.1 (2013): 69-96. Business Source Premier. Web. 1 May 2014. Read More