Nepotism in Business

In the business world, nepotism is the practice of showing favoritism toward one’s family members or friends in economic or employment terms. For example, granting favors or jobs to friends and relatives. Nepotism is a form of discrimination in which family members or friends are hired for in spite of their experience, knowledge or skills. It occurs more frequently in family-owned businesses, nonprofit organizations and small companies.

The presence of nepotism is especially evident in a family business setting, which have been described as unusual business entities.

Bright example of successful family business is Opinel knife Company: The Opinel story started back in the 1890’s, when the Opinel Knife Company was founded by Joseph Opinel and run as a family business. Even today, the Opinel family continues to run this business according to the same principles of success that have served them for so long. The basic principle of this success is: make a good product at an affordable price and people will come back for more. Other recognizable businesses still managed by family members include: Ford Motor Co. Benetton, Beretta, Gucci, Harley-Davidson.

* According to the Official statistic information – More than 50% of British companies are family businesses, where one family has a controlling interest in the finances and its members hold key positions. The same situation occurs in Japanese Business environment, Nepotism is based on friendship. The main reason of Japanese nepotism is acquaintance and the same course.

Recruitment decision making process is influenced by knowing their skills and education (Technical University and etc.) Nepotism acted significant role in British and Japanese business environment and process of industrialization. While in the family-owned business “nepotism” is seen as “succession,” many businesses in the modern world try to avoid even the appearance of nepotism, by forbidding relatives from working together, including husbands and wives as well as blood relatives.