Document Type : Original Article
Authors
1 Graduated from the Department of Management, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran
2 Associate Professor, Department of Management, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran
3 Professor, Department of Management, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran
Abstract
1- INTRODUCTION
Family businesses are a dominant organizational form globally, contributing significantly to national economies and societal wealth creation. Despite their economic importance, these businesses often face unique challenges, including nepotism—a practice where favoritism is shown to family members in hiring and promotions, irrespective of merit. While family businesses aim to preserve the legacy and sustain intergenerational wealth, nepotism can foster perceptions of inequity, leading to workplace incivility, employee cynicism, and an increased likelihood of job search behaviors among non-family employees. This study addresses the need to understand how nepotism influences these critical workplace outcomes in family business contexts.
2- THEORETICAL FRAMEWORK
The study builds on established theories, including Leader-Member Exchange (LMX), Job Demands-Resources (JD-R), and organizational justice frameworks, to hypothesize the direct and indirect effects of nepotism on workplace outcomes. LMX theory highlights the differentiated treatment of employees based on their perceived in-group or out-group status, a phenomenon often exacerbated by nepotism. The JD-R model provides a lens to explore how nepotism acts as a job demand, depleting employee resources and impacting well-being and performance. Finally, organizational justice principles underline how perceived inequity stemming from nepotism can erode trust, escalate workplace incivility, and fuel employee cynicism.
3- METHODOLOGY
This applied research employs a descriptive-analytical approach using survey data collected from 270 employees in family businesses in Mashhad, Iran. The target population was selected through systematic sampling, and the data collection tool was a validated questionnaire covering variables such as nepotism, workplace incivility, employee cynicism, and job search behaviors. The instrument’s reliability was confirmed using Cronbach’s alpha, with all coefficients exceeding the 0.7 threshold, indicating high internal consistency. Structural equation modeling (SEM) was employed to test the study’s hypotheses. Preliminary analyses ensured data normality and the adequacy of factor loadings for all constructs.
4- RESULTS & DISCUSSION
The results reveal a significant positive relationship between nepotism and workplace incivility, indicating that nepotistic practices increase perceived inequities and disrupt workplace harmony. Workplace incivility was found to mediate the effects of nepotism on employee cynicism and job search behaviors. Specifically:
Nepotism and Workplace Incivility: Employees exposed to favoritism reported higher levels of incivility, including rude and disrespectful interactions, which undermined their sense of belonging.
Nepotism and Employee Cynicism: Incivility fueled the perception of mistrust and skepticism toward organizational leadership, leading to diminished organizational commitment.
Nepotism and Job Search Behaviors: Cynicism, in turn, increased the likelihood of employees actively seeking alternative employment, highlighting the retention challenges faced by family businesses engaged in nepotistic practices.
These findings underscore the cascading effects of nepotism and the critical role of workplace culture in mitigating its negative outcomes.
5- CONCLUSIONS & SUGGESTIONS
The study concludes that nepotism, while often rooted in cultural and familial traditions, poses significant risks to workplace dynamics and employee retention. To address these challenges, family businesses must adopt meritocratic practices and implement transparent policies to ensure fairness. Specific recommendations include:
Policy Development: To limit subjective decision-making by establishing clear criteria for hiring and promotions.
Leadership Training: To educate family business leaders on the impacts of nepotism and foster inclusive management practices.
Employee Support Systems: To introduce channels for anonymous feedback and grievance resolution to address perceptions of unfair treatment.
Future Research Directions: To investigate the interplay between nepotism and organizational justice in diverse cultural and industrial contexts to develop targeted interventions.
By addressing these issues, family businesses can enhance their organizational health, retain top talent, and ensure long-term success.
Keywords
©2025 The author(s). This is an open access article distributed under Creative Commons Attribution 4.0 International License (CC BY 4.0)
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