How does Nepotism Affect Organizational Culture?
Some employers feel that the level of loyalty, morale, trust and commitment of friends or relatives they hire is higher compared to others in the workplace. Read ahead to learn how nepotism in the workplace affects organizational culture.
Control: Unfortunately, not all family members and relatives come with the right merit to be employed for a particular position or a role. When the manager is not allowed to control a subordinate just because she is a relative of an employer, imagine what will happen to the company’s discipline. Nepotism allows rules to be broken and can lead to a chaotic situation for business owners.
Ethics: When relatives are involved, the company’s ethics can get spoiled and even go into ruins. Let us take an example of Sathyam Computers, one of the India-based IT giants of mid-2000. Despite the apprehensions raised by the board members, its founder, Mr. Ramalinga Raju, went ahead and acquired infrastructure companies owned by his sons. This led the company to lose its share by 55% and the investors experienced great loss. Not only was the workplace culture impacted, but employee morale was also highly affected. The attrition recorded was very high until Tech Mahindra bought Sathyam Computers.
Allowing nepotism at any level creates excess damage to the organizational culture. Especially nepotism at the higher management or leadership levels will greatly spoil the company image and growth. Leadership roles are very important for the organizational culture and growth.