Nepotism In Business

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Nepotism is defined in Merriam-Webster’s dictionary as the unfair practice by a powerful person of giving jobs and other favors to relatives. Nepotism has the possibility for good and bad effects on a business. Simple examples of nepotism are a son or daughter becoming the successor of a company or small business. (Lee & Lim, 2003) More in depth nepotism is hiring or being hired by someone outside one's immediate family (Mom, Dad, Sister, etc.). Unfortunately, no matter who does nepotistic hiring or becomes the successor the likelihood of a business survives beyond the first generation is slim to none. (Lee & Lim, 2003) According to Lee and Lim's article "Family Business Succession" the author’s state that 30 percent of family firms in the United States survive into the second generation of family ownership. Approximately 15 percent to 16 percent survive into the third generation. (Lee & Lim, 2003)
Although the temptation to pass the control of businesses to professional managers is comprehensively avow, especially when there is no suitably modified house clause, successors to most house businesses last to be one of the families' generations. Sometimes, this employs places to seem indifferent on the ability of these successors to bring to the businesses. A family’s business decision is highly particular. The family will appoint its successor to lead its organization, even though their choice may be less adequate than non patronymic managers. The disapprobation to this is when the successor is inadequately prepared for the job that the continued existence of the company that the remaining family of the company will be jeopardized with such an order, in which conjuncture the genealogy might embrace a seat-warmer generalship. A patr...

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...ld possibly simplify this struggle. The growing curiosity in learning the exclusive necessities of double-career couples has spurred some of the opponents of anti-nepotistic policies. (Padget & Morris, 2005)
A subsequent element that has led some to query about the popularity of anti-nepotistic policies has been the amplified curiosity in family-run companies. According to Padget and Morris about 40% of Fortune 500 firms are family-owned and collectively they calculate for about 50% of the GDP. Their examination established that patronymic-run businesses accomplish much more on a difference of performance appraisal than non-family-proceeded firms. In order to stay "in the family", these organizations must practice nepotism. Thus, the succession of family-discussed firms is, obliquely, an endorsement of nepotism during the employment process. (Padget & Morris, 2005)

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