Nepotism can be found in practically every industry in the world, even in the highly competitive fields of construction, real estate and finance. Billionaire real estate tycoon Donald Trump has always given his adult children special employment opportunities. His son, Donald, Jr., age 35, is Executive Vice President of the privately-held Trump Organization. His daughter, Ivanka, age 31, also works in her father’s organization. His son Eric, age 29, is Executive Vice President of Development and Acquisitions. It is doubtful that even the most exceptionally brilliant, well-educated and hard-working 29-year-old could land an EVP position at a billion dollar organization unless he was related to the owner. In fact, Trump’s children openly admit that nepotism got them in the door, but also assert they’ve had to pull their weight after landing the job.

If nepotism is that widespread and prevalent in businesses big and small, it stands to reason that there must be some benefits to nepotism. Certainly, it could be argued that the children of the world’s most successful entrepreneurs are likely to have attended the finest schools and have a keener understanding of the family business than any outsider. Yet, many human resource experts have come to regard nepotism as ultimately damaging to business. That is because it often interferes with a company’s operations and possibly creates an environment that is demoralizing to employees. Even though widespread, nepotism as a strategy to fill the best jobs has some serious drawbacks.
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It was recently announced that 84-year-old media mogul Rupert Murdoch will be handing the leadership reigns of the 21st Century Fox / News Corp. media conglomerate to his son, James Murdoch. As part of the reorganization, Fox COO Chase Carey will step down from his role. James Murdoch got the appointment despite the 2011 revelation that News Corp’s News of the World reporters were hacking phones to get the scoop on stories. At that time, News of the World, a U.K.-based newspaper, was managed by James Murdoch, who was called before British Parliament to answer questions about the matter. News of the World closed shortly after the scandal. The debacle did not affect James Murdoch’s selection to take over leadership of the media conglomerate from his father.

For as long as businesses have existed, so has nepotism. Nepotism is the practice among those with power or influence to favor relatives or friends, especially by giving them jobs. It stems from the Latin word for nephew, which kind of goes to the heart of the practice. The most familiar forms of nepotism have been passing down the leadership of a family business from father to son and giving key positions in a family business to children, grandchildren, nieces, and of course, nephews. It’s a practice that has been around — and accepted — since ancient times. With small family businesses in olden times, it was only natural that a son apprenticed with his father, learned the family business, and eventually took over when the father passed or was too old to work. Back before there were colleges, technical programs and other paths to learn a trade, an apprenticeship in the family-business was the primary way to pass skills from generation to generation. It was not only a good thing, but also a necessary one. It was also natural for a parent to want his family to continue to benefit from a business he built from scratch. But nepotism hasn’t been restricted to just mom-n-pop shops. Like Century 21 Fox / News Corp., conglomerates have been handed down from parent to child. Indeed, sons have even inherited kingdoms from their fathers since time immemorial.

The world has changed a lot since ancient times. Almost everything about how businesses operate has changed, evolving to accommodate new technology, systems for teaching trades and occupations, and methods for recruiting and managing staff. There is no longer a need for nepotism. Yet, nepotism still exists; alive and well in the 21st century in organizations large and small. What has changed is how nepotism is viewed by many. Not only do some complain about the unfairness of nepotism, but business pundits question if nepotism is bad for business. That begs the question: is nepotism a good thing or a bad thing? Is it an invaluable pipeline of highly-qualified talent that business owners and leaders can tap inexpensively to fill key vacancies? Or is it a human resources scourge that, when allowed to spread unchecked, contaminates and kills businesses?
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