Психология и социология/ Социальная психология/

Jolita Vveinhardt

Vytautas Magnus University, Lithuania

Nepotism Variations: Public and Private Sectors

Annotation

In this article nepotism in the context of public and private sector is analyzed when people related by kinship, friendship and other relations are employed. It is emphasized that nepotism in business organizations culture is spread not less than in business organizations. In business organizations prevail no established opinion whether nepotism is a purely negative phenomenon when forming staff.

Key words: nepotism, favoritism, corruption, public sector, private sector. 

Introduction

Corruption has long been a synonymous for nepotism. Despite the discriminatory aspect of this phenomenon, the problem in the private sector often remains at the level of discussion. It is relied upon liberal economic logic and "invisible hand" mechanisms that should direct business organizations to the right direction.

Relevance of the research. Although nepotism in the public discourse is most often described as the problem of developing countries with rampant corruption problem, studies show that this phenomenon is still relevant to Western democracy as well. Nepotism remains relevant common humane ethical and economic dilemma for many countries business structures.

Problem of the research. Nepotism is not just the problem of public sector and developing countries. There are quite a lot of speakers against nepotistic relationships in business organizations, but there is no consensus on this question: we can observe both positive and negative aspects. The research problem is posed by the question of whether anti-nepotistic requirements raised to the public sector should be applied in business organizations and what they would gain from it, and what they would lose?

Subject of the research: nepotism in the public and private sectors.

Aim of the research: analyze variations of nepotism in public and private sector organizations.

Objectives of the research:

1.      To analyze social aspects of nepotism.

2.     To uncover the controversy of nepotism evaluation by organization of the internal functioning of public and private sector organizations.

The article was prepared by applying the methods of literature analysis and synthesis. 

Social aspects of nepotism

International anti-corruption organization, nation-state media and society closely monitor and analyze the effects of corruption, including the name of nepotism. That is, patronage of close people (relatives and people related by other links) recruitment to work to public sector organizations realizing the movement of personnel within organizations, in public procurement and so on. In Europe most attention and criticism fall to the post-Soviet bloc countries, where corruption is directly associated with economic development and investment climate. That is, with the improvement of the climate and the resulting interference.

Various researchers are looking for the roots of nepotism in social public setting, traditions. K. S. Ulrik (2012) analyzing the situation in the Latin American and African countries links the phenomenon to the peasant, tribal culture and claims that the phenomenon is relevant to developing countries. Tribe takes care of its members and it is a virtue and ethical standard that must be met. Similar enhancement of worldview can be seen guiding gaze to Eurasian (Europe and Asia continent) east.

In the countries where there is no developed industry, old and strong urban culture, where there is still a strong peasant tradition, not taking care of your brothers, sisters, relatives or the people from your town or village after having gained leading positions is considered to be turpitude. Neither economic processes nor the growth of state, social members’ capital and general well-being are unable to quickly remove socio-cultural regulations that are deep-seated in the national consciousness.

A conspicuous tendency to look for nepotism roots in post-soviet countries in near historic past – in socialistic system and the layers of values it has graded has been noted. Extent of nepotism, corruption here are often associated with the influence of the socialist system. In fact, in the ability to bypass the system when managing household and other affairs, to embezzle the asset of the organization there have been the signs of prowess, resourcefulness, in current terminology – entrepreneurship. J. Palidauskaitė (2006) expresses the opinion of more than one researcher that after the change of societal structure and culture, the importance of contacts, usage of official positions did not disappear. Motivation of such activities remained similar and the activity itself became known as corruption, nepotism, favoritism and conflict of interests.

However, patronage, nepotism is not only a problem of the nations that survived socialist system. I. Christodoulou (2008) when analyzing difficult situation in Greek medical labor market and flourishing nepotism notes that new nepotism rules when authorities hire each others’ relatives and so extends the family circle are created. In this way, many families become linked in the family support network.

In Greece it is known as organized medicine clan, but it is not necessary to have a degree in sociology scientist to understand that nothing is good when people with lower qualifications are always treated better than you are. Such a society is similar to the medieval guilds.

In the content of nepotism a strong selective discriminatory emphasis exists on the basis of which candidates to certain resources are divided according to the range in one end of which there is “fellow” and in the other – “stranger”. However, textbook definitions of discrimination are no longer in power in public policy, where reservations are made in Western democracies that are given as examples to developing countries – certain discriminatory aspects in order to institutionalize and legalize by presenting as, for instance, defense of equal rights. According to F. A. Chervenak ir L. B. McCultough (2007), ethically justified nepotism is not an oxymoron when we speak about legitimately-based organizational interests that cause danger. For example, in 1973 American Association of Professors found out that strict anti-nepotism policy is an obstacle to increase the number of female professors at university because the aim of universities is to defend legitimately-based organizational interest.

In some political, social European organizations special quotas when giving positions and responsibilities are foreseen (e.g. at least one-third of positions in the lists of the elections to government structures) are to be given to female sex. It is presented as a defense of women's rights, equal opportunities clause, although this action is basically selective from the point of gender but it does not guarantee competence and makes the concept of discrimination – the primary meaning of which is distinction – not just labile, a competitive mechanism is disturbed that determines the organization's quality and performance. Because sexuality – not competence – becomes the main argument here. In fact, institutionalized act does not eliminate inequality and highlights it even more, giving grotesque to the principles of democracy as it is not a product of public mentality development, but only an imposed form, which induces a latent tension.

Individual's competence as a value is relevant to both public and private sectors. The individual, in possession of certain knowledge or skills, which allows him to halve the production costs is involved in its production, and reduced its cost by at least a quarter, does a great service to society – not only because of lower prices, but also on additionally reduced costs. However, only where competition is we can say that these costs will decrease (Hayek, 2002). Nepotism undermines the value of capital of an individual as a person and as an intellectual resource.

Summing up a brief social discourse it should be held that when speaking about nepotism we cannot make an absolutely equal sign between this phenomenon and the national culture, level of industry development and historical past. In general terms, it is the phenomenon that accompanies social relations, rudiment of peasant, guild community culture, which cannot be fully and completely controlled by institutional measures.

Nepotism as a grant and an ethical problem

In the previous chapter we discussed that selective, sexuality-based approach is likely to be institutionalized. However, this is not the only dilemma in modern society. Terms of nepotism, favoritism – as regards public sector – are used with negative emotional connotation, prohibited by institutional power of the state. Although not in the public discourse when the issue touches one’s personal interests people very often are tempted to look for easier way to find out solutions. Dilemma of the approach towards nepotism reveals when this topic is examined in the context of business organizations. Ulterior ethical conformism makes itself conspicuous.

Moreover, D. W. Ewing (1965) drew attention to the ambiguity in evaluating businessmen’s opinions about nepotism. Although most managers said that nepotism is obsolete and causes a lot of problems, however, they acknowledged that employing relatives is a handy decision. I. Christodoulou (2008) claims that in small, family-owned enterprises nepotism is viewed more favorably. Family members are trained about various forms of governance in order to ensure continuity of the company when the members of the previous generation retire or die. In fact, in most small businesses companies nepotism is considered to be synonymous for "takeover". One of the most common arguments against nepotism is that the emotional ties between people who share a number of other types of relationships can have a negative impact on their decision-making and professional development. However, not only family members, relatives or friends are employed.

F. Ferlazzo, S. Sdoia (2012) state that in Canada and Denmark 6 per cent of managers have the same employer as their parents. In other words, family relationships intertwine with the working, financial relationships.

Friendship is a reliable and relatively inexpensive source of information for finding the employee because current employees do not want to make their employers angry by recommending friends who are poor candidates to take a particular position. Recommendations of trustworthy friends are replacement for possibly more expensive information source including former employers or teachers' recommendations, academic achievement records and history of previous work. Since these sources of information are difficult to reach and more expensive, employers prefer to make use of their friends (Rees 1996) with regard to monetary reasons. In addition, when recruiting friends one can expect to save a certain amount of funds to be spent for salary.

However, nepotism in business gets a lot of criticism as well and very often the so called "black cat unfairness" appears in the way of business partners who have worked together for many years. In addition, there is a risk that close emotional ties may prevent from objective evaluation of the candidates to take place of work, when setting remuneration, allotting incentives and so on. Likewise confidence can hinder to objectively evaluate the information received, for example, concerning employee relationships. Such cases are common when analyzing, for example, mobbing stories when less competent boyfriend or girlfriend of a manager crucifies a colleague by providing targeted, misleading information (disinformation). In addition, an open secret is that the employer’s relatives are not trusted, others are trying to please them – all of which undermine the objectivity of internal communication.

F. A. Chervenak and L. B. McCultough (2007) poses the problem of employees’ competencies. It is one of the dangers that threatens organizations, which tolerate nepotism.

Nepotism in public sector as well as in business organizations disturbs psycho-emotional climate of organization and erodes confidence in the manager as well as values and decisions the organization declares. Employees will always have doubts whether the manager’s relative has not been evaluated more favorably than he/she was worth due to blood relations, doubts will appear whether a certain position in the organization was given to him/her because of high level of competence. Thus, it can lead to mistrust not only for recruitment, but also evaluation, career and other systems of the organization. It has been proved that trust, congruence of values, loyalty to the organization, a favorable psychological climate are closely linked to the quality of the activities and competitiveness of the company in the market as well as the image in the eyes of consumers and customers.

But why nepotism is nevertheless tolerated in business organizations although many threats emerge when tolerating it?

Nepotism is criticized for its amateurishness; its opponents claim that a focus of intellectual, analytical approach towards management means fall and final disappearance of nepotism. But entrepreneurs seem to think differently. Across the spectrum of their responses because managers have a developing professional approach towards their work, they can justify nepotism; being professionals, they can decide objectively – to use nepotism when it may be useful for the company and reject it if it is not (Ewing, 1965).

However, there are strong ethical counter-arguments as well. Giving privileges is a policy of business and marketing, which is open to almost everyone who pays the price of privilege giving deposit. However, there is a vital link between the insiders because when giving privileges we create favoritism of artificial "family", which is based on money. Otherwise, financial ties occur instead of blood ties. Nepotism and privilege granting example is the story of mafia where blood as well as financial relations exist at the same time (Christodoulou, 2008). However, experience shows that nepotism, despite negative evaluations, exist both in public and private sectors and this is not so much institutional but rather a problem of a social values.

Conclusions

Nepotism is transference of the concern about a close social problem to public space – both in public administration and business sectors.

When evaluating ethically nepotism can be considered as a certain dysfunction of social relationships in the general context of socium.

Nepotism is characteristic to many sociocultures, although it manifests itself differently depending on the traditions and maturity of civil society. In spite of economic arguments, nepotism can be justified in business sectors with certain limitations.

Nepotism, favoritism in public sectors is directly linked to corruption, but in private sector the situation is changing, it is attempted to justify it with the help of one or another arguments. In other words, corruption in one sphere is treated as "not corruption" in another sphere, although the phenomenon of the content has not changed substantially, only the location is changing. Such evaluations is a fierce ethical dilemma not only in business but also in society, which tolerates nepotism in one or another area.

References:

1. Chervenak, F. A., McCuIlough, L.B. (2004). An ethical framework for identifying, preventing, and managing conflias confronting leaders of academic health centers. Acad. Med, Vol. 79 (11), p. 1056-1061.

2. Christodoulou, I. (2008a). Nepotism in medicine and the concept of franchising. The international journal of medicine, TIJM Volume I; Issue 2 April - June, p. 58-61.

3. Ewing, D. W. (1965). Is nepotism so bad? Harvard Business Review (January/February 1965), p. 223-226.

4. Hayek, F. A. (2002). Individualizmas ir ekonominė tvarka. Vilnius: Eugrimas.

5. Ferlazzo, F., Sdoia, S. (2012). Measuring Nepotism through Shared Last Names: Are We Really Moving from Opinions to Facts? PLOS ONE. Volume 7, Issue 8, p. 1-6.

6. Palidauskaitė, J. (2006). Korupcijos sklaidos formos Lietuvoje: tarp sovietinio palikimo ir rinkos padiktuoto pragmatizmo. Viešoji politika ir administravimas. Nr. 18, p. 57-71.

7. Rees, A. (1966). Informatikon Networks in Labor Markes. American Economic Review, No. 56, p. 559-566.

8. Ulrik, K. S. (2012). The anthropology of nepotism: Social distance and reciprocity in organizations in developing countries. International Journal of Cross Cultural Management. Vol. 12, Issue 2, p. 247-265.