Nepotism is a type of favoritism granted to relatives. It may occur in business, politics, entertainment, and religious fields. While the origins of the term date back to the seventeenth century, nepotism is still practiced in some parts of the world. In the United States, some businesses have anti-nepotism policies that prevent relatives from working together.

Is Nepotism so Bad?

Nepotism is not inherently bad, nor is it bad in all cases; however, it can have negative effects on a business. For instance, playing favorites by granting jobs or favors to friends without a fair process of determining merit can put non-favored employees at a disadvantage. It may also hurt the functioning of the company by reducing the quality of the work. Working with blood relatives or a spouse may also affect both judgment and professionalism, as employees may make decisions based on the needs of their loved one as opposed to the needs of the company. With that said, nepotism is still a common practice in many family-owned small businesses, where it is viewed as positive. Nepotism allows the business to stay in the family; younger generations grow up learning and working under their elders as apprentices so that they may eventually take over in the positions of the older generation.


Nepotism has a long history in the United States. For instance, President Ulysses S. Grant offered government positions to approximately 30 of his family members, ensuring that they prospered financially. John F. Kennedy also committed nepotism by appointing his brother-in-law Sergeant Shriver as the first director and his brother Robert F. Kennedy as Attorney General of the Peace Corps. A recent example occurred in 2012, when the Washington Post reported that the D.C. Metropolitan Washington Airports Authority employed five members of the same family. The claim was true although accusations of nepotistic practices were refuted, as the organization claimed the employees hired were qualified for the positions they held. Later, a ruling indicated that current employees of the Airport Authority are not allowed to influence hiring practices, either indirectly or directly.

Encouraging Best Practices

Businesses need to establish guidelines when it comes to avoiding the potential pitfalls of nepotism. If it’s a company where family members are allowed to work together, guidelines should indicate how relatives should work together in order to be productive. Family-owned companies need to carefully outline how they will hire new employees, divide responsibilities, structure their business, train new employees, and replace old employees. While all of this depends on the size of the company, the industry they are working in, and what culture they come from, it can help tremendously on the business front. Regardless of members stances, clear communication is the most effective way to anticipate and deal with problems. There are a number of benefits to working for a family-owned business, in addition to keeping your own business in the family. Good communication can help to ensure that you reap those benefits.

Quick Summary

In the business world, nepotism involves preferential hiring for friends and family members. While it is not illegal, it is sometimes frowned upon by organizations who fear that having relatives work together will be detrimental to the company’s functioning. However, many family-owned businesses still operate by hiring relatives and family members.