Document Type
Article
Publication Date
Fall 12-1-2024
Abstract
This argumentative paper highlights the role of nepotism in family-owned businesses exploring the advantages and challenges through theoretical frameworks using agency theory, resource-based view (RBV), and social capital theory. To support my argument, I used personal experience and research from academic journals. Nepotism is a powerful concept that can become a tool to advance organizational performance and guarantee long-term success in family-owned businesses. Often detractors criticize nepotism for fostering favoritism and unfairness in a company, but family-owned businesses use nepotism as a strategic advantage that strengthens trust, loyalty, and shared values. The agency theory shows the importance of aligned family goals to reduce agency costs and improve accountability. The resource-based view theory shows that familial ties are resources that foster qualities of teamwork, employee and customer loyalty, and long-term stability. The social capital theory shows the significance of trust and strong relationships, which can create a supportive environment and long-term success. Nepotism can raise some challenges in the workplace about favoritism, including lack of accountability, and workplace tension, and affects open communication among both members and non-family members. Approaching nepotism as a strategic advantage in family-owned businesses brings necessary values and promotes a culture of trust and loyalty.
Course Level
BUMG 3100: Business Ethics
Advisor
Claudia Hanrahan, PhD
Recommended Citation
Baird, Calista, "How Nepotism Strengthens Family-Owned Businesses" (2024). Business Ethics. 4.
https://digitalcommons.shawnee.edu/business_ethics_3100/4