One of the most controversial and prevalent issues regarding business ethics is nepotism. It is loosely and variously defined as the act of hiring based on kinship instead of ability, and the abuse of authority in appointing family members into positions of power. For example, if the head of a corporation hires or promotes a relative instead of a more competent non-relative, that corporate head can be accused of nepotism. The fact that nepotism has always existed is a generally accepted fact. It is a natural and normal human instinct, a “back to human survival” drive that frequently involves “coercion as well as reciprocal altruism” (Whalen, 2006, http://web.ebscohost.com/ehost/pdf?vid=7&hid=103&sid=40c5f7ce-f20f-4b7f-8cc8-60ebcb5c7a56%40sessionmgr107). But nepotism is not merely a natural predisposition; it is also a cultural phenomenon. This means that society controls the practice of nepotism, even as nepotism helps shape society.
The Origins of Nepotism
The word “nepotism” comes from the Latin nepos, which means nephew. The term originated in the Middle Ages when those in the clergy, with no offspring of their own due to their having made vows of chastity, appointed their nephews into positions of power in the form of sons continuing their father’s legacy. A few popes were alleged to have assigned nephews as well as other family members into high positions in the church. One of them, Pope Callistus III, was succeeded in the papal throne by his nephew Rodrigo (later Pope Alexander VI), whom he had previously chosen to be a member of the cardinalate. In turn, Pope Alexander VI later appointed his mistress’s brother as a cardinal. This brother would later become Pope Paul III. In a continuation of the trend, Pope Paul also chose two of his own nephews to become cardinals. In 1692, the chain was finally ended when Pope Innocent XII issued a papal bull preventing future popes from conferring assets, positions, or income on any kinsman, with the exception of the appointment of at most one eligible family member as Cardinal (Bunson, 2000).
Nepotism in Politics
In more recent times, nepotism has been a common occurrence in politics. Former president John F. Kennedy was charged as such when he assigned his brother Robert Kennedy as the new Attorney General. Senator Frank Murkowski, then the governor of Alaska, appointed daughter Lisa to fulfill the remainder of his post, eliciting the suspicion of many citizens. Other American political families who have been accused of nepotism include the Bush and the Clinton clans. In the presidential election of 2000, the son of a former president ran against the son of a former senator. When George W. Bush won, he assigned Colin Powell’s son to be the FEC chairman; and the son of Supreme Court Justice Antonin Scalia was appointed chief labor attorney. Bush also gave high-ranking positions to the Vice President’s daughter, as well as her husband (Ciulla, 2005).
In Asia, there have been allegations that Malaysian Deputy Prime Minister Najib Tun Razak acquired his position because of the influence of his father Tun Abdul Razak, a former Prime Minister. In the Maldives, President Maumoon Abdul Gayyoom reportedly had more than a dozen of his relatives, friends and former classmates working for his administration. In Europe, Romanians normally use the word nepotism (the Romanian nepot means nephew) to mean an affiliation or relationship with someone who can give them a decent job (Wikipedia, 2006).
Nepotism in Business
Just as in politics, nepotism is also prevalent in the business world – a case which may be attributed to the fact that the majority of businesses all over the world are family-owned. In America, family-owned businesses comprise more than 90 percent of all businesses, and this includes 40 percent of all Fortune 500 corporations (Ciulla, 2005). The tendency for most of these family-owned companies is to keep the reins of the company in the hands of someone in the family. William Ford, of the famous motor company clan, heads the family business, while Aerin Lauder and Jane Lauder, granddaughters of the cosmetic-company founder Estee Lauder, both hold top positions in their family’s cosmetics firm. In the UK, Rupert Murdoch’s 26-year-old son Lachlan manages the publishing arm of his company (Ciulla, 2005).
At the age of 24, Ivanka Trump is a Vice President in her father’s empire. It being her first job, people are wont to ask whether this is just a case of workroom nepotism. According to Donald Trump, Ivanka’s father, “It’s the American Dream, handing down what you had to your children. Grooming them to follow you” (ABC Television Network, 2006, http://abcmedianet.com/pressrel/dispDNR.html?id=110206_01). Trump insists that nepotism is seen in a bad light when it is the children of wealthy entrepreneurs that are involved, but not when it occurs in a small family-run business. The question of whether or not “keeping it in the family” is ethical is still up for discussion nowadays.
Nepotism in the Natural World
Recent scientific studies have postulated that nepotism is a natural and instinctive action; possibly a type of kin selection among organisms of all levels of complexity. Nepotism has been observed not just in human populations, but in ant colonies as well. In 2003, researchers at the University of Helsinki discovered that ants, which were previously thought of as egalitarian organisms, actually practice nepotism by favoring their own relations when minding eggs and larvae. The Finnish researchers found a certain ant species that “favors its own relations in colonies descended from multiple queen ants” (CNN, 2003, http://edition.cnn.com/2003/TECH/science/02/27/science.ants.reut/index.html). According to Liselotte Sundstrom, one of the researchers who made the discovery, the nepotistic behavior indicated that “ant workers are able not only to detect kin relationships, but also to pursue their selfish genetic interests if the costs to their colony are not prohibitive” (CNN, 2003, http://edition.cnn.com/2003/TECH/science/02/27/science.ants.reut/index.html). The only other member of the insect world known to practice nepotism is the honeybee. This discovery implied that in the natural world, humans are not the only ones who are able to benefit from their ability to discriminate.
Good and Bad Nepotism
According to Adam Bellow, author of In Praise of Nepotism, there are such things as “good” and “bad” nepotism and that the existence of “good nepotism” is good news because we are living in a “nepotistic Golden Age” (Bellow, 2003, http://www.theatlantic.com/doc/prem/200307/bellow). If a manager hires relatives to fill the posts in his office, the instantaneous reaction would be that this is unethical because it is unfair to those who are not relatives of the manager, and that his family members may not be the most competent workers. According to Bellow, nepotism takes various forms. George W. Bush can be accused of nepotism even though it was not his own relatives whom he appointed, but those of his colleagues. It may be argued that those people are qualified, but perhaps they are not the most qualified. Nonetheless, America seems to let this kind of incident slide because according to Bellow, “people today tend to define nepotism not as hiring a relative, but as hiring an incompetent relative” (Ciulla, 2005, http://web.ebscohost.com/ehost/pdf?vid=7&hid=103&sid=40c5f7ce-f20f-4b7f-8cc8-60ebcb5c7a56%40sessionmgr107).
Opposition against nepotism can be divided into two overlying categories: the division between public and private, and value. On one hand, people don’t seem to think that there’s anything wrong with the fact that Bill Wrigley heads his family’s chewing gum company, because it is his family’s business. On the other hand, it would matter if an incompetent relative runs the company because his incapability to make money for the company would affect the stakeholders as well.
The Argument for Nepotism
Contrary to the belief that nepotism is a fraudulent practice that disregards democracy and equal opportunity, Bellow believes that family-based work systems can actually be more lucrative and successful. According to Bellow, people tend to concentrate on the issue of blood relations, but in the light of nepotism, it is incredibly hard to differentiate between “favoritism shown to a blood relative and favoritism shown to a college roommate” (Pooley, 2005, http://web.ebscohost.com/ehost/detail?vid=6&hid=103&sid=40c5f7ce-f20f-4b7f-8cc8-60ebcb5c7a56%40sessionmgr107). Bellow argues that the notion that family members tend to be incompetent is utterly untrue. He uses genetics to prove his point, saying that the skills and abilities that enable one person to be a productive business leader will be present in a family member as well. Bellow also observes that some large corporations prefer to employ relatives of employees because of the assumption that the conduct of the employee is a fair indicator of the conduct of the relative.
The Argument against Nepotism
Brigham Young University defines nepotism as “appointing or hiring relatives to positions based on family status rather than on merit” (BYU, 2006, http://www.byu.edu/hr/employ/nepotism.php). In most workplaces, nepotism is discouraged because of its propensity for creating problems which include
“family members bringing family problems to work, excluding non-family employees, inappropriate sharing of confidential information, jealousy, scheduling difficulties when the family goes on vacation, and personal work problems spilling over onto other family employees” (BYU, 2006, http://www.byu.edu/hr/employ/nepotism.php).
Other concerns regarding nepotism in the workplace include favoritism and unequal opportunity. Also, there is a tendency for those who have been affected by nepotism to not speak up regarding their concerns. The tension thus created causes lower morale and decreased productivity in the workplace.
Anti-nepotism laws have made nepotism an illegal and punishable act in many countries in Europe and North America. However, in some sectors of the US, anti-nepotism regulations that have prohibited the employment of married couples since the 1970’s have been deemed unlawful in the light of affirmative action and are seen as prejudiced against women. As of 2000, 38 states in the US had laws prohibiting “marital status discrimination” (De la Rosa, 2000, http://som.csudh.edu/dkarber/501s00/jdelarosa/research.htm). According to Risser (1997), if there is a broader policy preventing employees from co-habiting, this would not breach marital status policies but may be taken as “an invasion of common law privacy, which is recognized in most states” (De la Rosa, 2000, http://som.csudh.edu/dkarber/501s00/jdelarosa/research.htm).
An unwritten facet of many anti-nepotism policies is that family members cannot be hired in the same workplace. This is problematic because even if family members are on the same level, career-wise, they would still not be able to be employed in the same workplace. A premise of anti-nepotism policies is that having relatives in the workplace decreases productivity and may create conflict. Although this premise has no credible basis, many public agencies and companies implement anti-nepotism policies to prevent poor work performance.
The Ethics of Nepotism
The practice of nepotism assures that the right surname, spouse or group of friends can smooth your passage through society. However, the notion that heredity can overpower equal opportunity in the workplace is problematic. Bellow’s In Praise of Nepotism does not give a convincing argument on the ethics of nepotism. The author merely makes the distinction between nepotism practiced poorly and nepotism practiced well, and says that when the recipients of acts of nepotism do a good job, nepotism was practiced well and that when those recipients prove incompetent, nepotism was practiced poorly.
In politics as it is in business, people still expect democracy, with the usual assumption being that the job will be given to the most deserving individual. Nepotism not only takes away the factor of equal opportunity; it also creates an exclusive set of people, closed off from other non-relative members. This insulated group of people, bound to each other by blood and loyalty, tends to create tension within the work force.
Bellow admits that “nepotism unchecked by laws and strong ethical prescriptions does tend to run to extremes” and that the dilemma is how to channel nepotism “so that it does not obstruct our efforts to create a good society” (Whalen, 2006, http://web.ebscohost.com/ehost/pdf?vid=7&hid=103&sid=40c5f7ce-f20f-4b7f-8cc8-60ebcb5c7a56%40sessionmgr107). Nepotism may be a widespread practice, but that does not mean that it should be endorsed. There may be those arguing for the practice of nepotism, but the fact remains that the practice is difficult to maintain without allowing it to lead to “corruption and/or stagnation in business and politics” (Ciulla, 2005, http://web.ebscohost.com/ehost/pdf?vid=7&hid=103&sid=40c5f7ce-f20f-4b7f-8cc8-60ebcb5c7a56%40sessionmgr107).
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