Is nepotism so bad for family firms? A socioemotional wealth approach

Shainaz Firfiray, Cristina Cruz, Ionela Neacsu, Luis Gomez-Mejia

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

This paper focuses on the issue of nepotism or the practice of hiring and managing family members in family firms. Extant research suggests that while nepotism is related to numerous problems, it also offers some unique advantages to family owned firms. We use a socioemotional wealth (SEW) perspective to develop a theoretical framework that explains how nepotism influences firm performance. In doing so, we rely upon a nuanced conceptualization of SEW to clarify why some family firms are more likely to engage in nepotism than others, as well as explain the contingencies under which nepotism may prove beneficial or detrimental for family firms. Finally, we explore how human resource practices might impact the interplay between nepotism, environmental contingencies, and firm performance.

Original languageEnglish (US)
Pages (from-to)83-97
Number of pages15
JournalHuman Resource Management Review
Volume28
Issue number1
DOIs
StatePublished - Mar 2018

Keywords

  • Environmental contingencies
  • Family firms
  • Human resource practices
  • Mixed gamble
  • Nepotism
  • Socioemotional wealth

ASJC Scopus subject areas

  • Applied Psychology
  • Organizational Behavior and Human Resource Management

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