Abstract
Nepotism is widespread in organizations in developing countries but has so far received scant attention in cross-cultural management research. The paper seeks to contribute to the underdeveloped research topic suggesting an anthropological explanation of nepotism. It is argued that nepotism reflects the presence of tribal and peasant social morals in organizations where they replace norms and principles typical of industrial society. Examples from African and Latin American organizations show how nepotism works, and drawing on quantitative data it is suggested that nepotism is relatively common in countries at the earlier stages of industrial development. Four managerial approaches to nepotism are outlined: managers can accept nepotistic ambiguity; they can attempt to strengthen the modern organization; they can use the tribal and peasant norms underlying nepotism as the basic principle of the organization; or they can codify the pre-industrial norms and make them part of the formal organization.
Introduction
In an interview with BBC in 2006, the Kenyan journalist, Anthony Ngare observed that ‘although many Kenyans believe in the principles of meritocracy, where those with the right skills advance further up the career ladder, up to 80 percent of the workforce of some Kenyan companies come from the same tribal area…Discrimination along tribal lines, albeit in a disguised form, is dominating the Kenyan workplace. (BBC, 2006). Similar observations are made in Latin America. In a survey from 2010 including 2900 employees in Mexico, … the majority of the respondents reported cases of nepotism or cronyism in decisions about employment, wages or promotions…Bosses or employees use their power to provide certain benefits for members of their family or friends. Fifty percent of the respondents answered that there is not equality of treatment but an environment which favours employees with connections. (Fernandez, 2010)
The nepotistic behaviours reported in the two quotations are not exceptions. Nepotism is widespread in developing countries where it influences and shapes organizational behaviours and business transactions. However, in spite of its importance, it has received very little scholarly attention in organizational research, including cross-cultural management.
This paper seeks to contribute to the scant literature on nepotism suggesting that anthropological theory that has been developed for the analysis of pre-industrial, tribal and peasant communities also explains the motives behind nepotistic behaviours in modern organizations. It is argued that pre-industrial social morals continue to play an important role in organizations in developing countries because these countries are in transition from pre-industrial to industrial socioeconomic conditions. In the earlier stages of industrialization tribal and peasant social morals continue to be a central frame of reference for employees and managers. Nepotism is found where these social morals replace the principles of the modern organization typical of industrial society.
Drawing on Marshall Sahlins’s theory of social distance and reciprocity as the analytical framework, the paper analyses a number of cases of behaviour in organizations from Kenya, Ghana, Nicaragua, and Colombia (Sahlins, 1968, 2004). On the background of the available statistical information on nepotism and industrialization the paper suggests that the findings from the four countries may not be unique to these nations, but typical of industrializing countries.
Nepotism produces a behavioural ambiguity that both local and expatriate managers are likely to face in organizations in developing countries. The last section of the paper outlines four basic managerial approaches to nepotism: managers can choose to accept the ambiguity that follows when the tribal and peasant norms overlay the formal structure of modern organizations; they may choose to strengthen the formal organization, they may decide to emphasize the tribal and peasant social morals as the foundation for the organization; or they can codify and include them in the formal organization.
The concept of culture used in the analysis differs from the way culture is normally defined in cross-cultural management research. Culture is not primarily seen as the shared values and norms that ‘distinguish one group from another’ (Hofstede, 1980) but as the values and norms that characterize socioeconomically defined types of society. The units of analysis are pre-industrial society, industrial society and developing, transitional society, each category having a distinct configuration of social norms and cultural principles. In this sense the paper aligns with the sociological notion of society and culture found in the classical sociology of Marx, Weber, Durkeim and Tönnies (Sztompa, 1993), Inglehart’s modernization theory (Inglehart, 1997) and in Giddens’s theory of modernization (Giddens, 1990).
Research on nepotism
In a review of the literature on nepotism, K. Vinton (1998) writes that it is ‘one of the least-studied and most poorly understood human resource practices’. Only one book has been written that explicitly addresses the topic, Adam Bellow’s In Praise of Nepotism (2003), and many of the existing articles are anecdotal. Most of the few research papers that exist refer to organizations in the US focusing on the legitimacy of anti-nepotistic rules that limit the employment of spouses in the same organizations or units and how to draw such rules. Another line of research focuses on family-run companies in order to determine their efficiency compared to non-family owned companies (see Vinton, 1998).
Research that explicitly addresses nepotism in developing countries is even scarcer. Bellow’s book contains analyses of nepotism in developing countries, and there is a research note on nepotism in Arab organizations (Hayajenh et al., 1994), but in most works on management in developing countries it is either treated as one aspect of management among others, taking the meaning of the term for granted (e.g. Jackson, 2004), or nepotistic practices are described without using the term, as is the case in much of the literature on Chinese organizational behaviours (e.g. Westwood, 1997; Yang, 1994).
Throughout the literature, nepotism is described as particularistic in-group solidarity which is contrasted with the universalistic and utilitarian criteria of recruitment, appointments and resource allocation that are understood to be the principles governing behaviour in economically rational organizations. Nepotism is thus seen as a double-edged phenomenon: on the one hand it consists in preferential treatment of one’s in-group, and on the other it is a deviation from the norms of equal treatment of all according to utility and justice. Nepotism is not merely preferential treatment of one’s in-group; as used in the literature, it signifies norms and practices that are not in accord with the basic principles of most American organizations (Vinton, 1998).
As shown by Bellow (2003), the universalistic norms are of recent origin; the equality of rights without consideration of a person’s family or kin-group first appears as a general principle with the French Revolution at the end of the 18th century, and it is not until the advent of industrial capitalism that purely utilitarian criteria of employment and human resource management begin to dominate in organizations. The dual content of nepotism – the particularistic family solidarity plus the deviation from the principles of utility and equal treatment of all – reflects the tension between the two historical principles of kinship based in-group solidarity and liberalism. In the historical transformation of society from rural and pre-industrial to urban and industrial, the family- and kinship-oriented norms and values are gradually replaced by the notion that all individuals should be treated equally according to utility and merit and that kinship should be disregarded. The transition is not necessarily smooth: the old principles which emphasize solidarity with kith and kin do not automatically give way to the new principles of utility and equality and sometimes the latter are resisted or overrun by the former.
In Bellow’s analysis, nepotism is widespread in the early stages of this transition where the pre-industrial and pre-liberal principles remain influential. The developing countries are presently in a process of industrialization and thus experiencing an economic and cultural transformation that is similar to the one the industrialized countries went through earlier in history, and the tension between the two different social norms is therefore more acute here compared to the industrialized West.
Hayajenh et al.’s (1994) study of nepotism in Arab countries supports the view that nepotism is more widespread in the developing countries due to the tension between pre-industrial and the industrial social morals. According to the authors, the Arab tribal systems require strong commitment from all individuals towards their tribes, and it is therefore expected that solidarity with tribal members will be prioritized above the utilitarian and universalistic principles of the organization. Tribal systems are by all accounts pre-industrial, and their continued role in social life testifies to the persistence of pre-industrial social morals during the earlier stages of industrialization.
Pre-industrial communities and the morals of social distance and reciprocity
The present paper continues Bellow’s and Hayajenh et al.’s analyses in two ways: it suggests that nepotism is related to the transition from pre-industrial to industrial society and that the preferential treatment of family and friends that is central to nepotism is rooted in the kinship-based communities that precede urban and industrial society.
Organizational theory addresses issues that are relevant for organizations in modern, industrial society; it does not address cooperation and norms in preindustrial societies, and it is therefore of little use for the analysis of the preindustrial social norms that motivate nepotism. In order to analyse the collective morality that drives nepotistic behaviours in organizations it is necessary to turn to the social science that specializes in the study of pre-industrial society, i.e. anthropology.
Among the various theories and empirical generalizations available in anthropology, Marshal Sahlins’s theory of social distance and reciprocity (Sahlins, 1968, 2004) has been highly influential in anthropology and his texts are generally accepted as classics (Barnard and Spencer, 1996; Wilk and Cligget, 2007). Conceptually they continue Durkheim’s theory of social solidarity (Durkheim, 1984) and Mauss’s analysis of gift-exchange (Mauss and Halls, 1990). The empirical background consists of ethnographic findings from more than 30 different tribal and peasant communities from different parts of the world.
The central proposition of the theory is that social solidarity varies according to the position of individuals on a continuum ranging from close in-group relations to distant out-group relations. The observation that social relationships vary according to social distance is common knowledge in anthropology (Bourdieu, 1995; Fortes, 1969; Mauss and Halls, 1990; Pitt-Rivers, 1973). The quality of Sahlins’s theory lies in the variety of different social behaviours and relationships he brings together in a common and coherent theoretical framework with social distance as the central concept.
Sahlins describes the notion of social distance as a set of concentric circles with close relations at the centre and more distant relations in the outer circles. The household and the nuclear family is the closest in-group. Bonds are strong between members of the same lineage – the closest descent group – and between neighbours, but they are more distant compared to those of the household. Individuals, who are related as members of the same tribe (more or less equivalent to ethnic group) but not as members of the same lineage or as neighbours, are linked by weaker bonds. At the margin of the outer circle, Sahlins locates members of other tribes, i.e. the ‘perfect’ outsiders or strangers (see Figure 1).
Social distance and reciprocity.
The figure illustrates the social distance which exists between an individual located at the centre and members of different social units located in more or less distant peripheries where the different degrees of social distance correspond to different degrees of moral commitment and social obligations.
In the segments closest to the in-group pole (generalized reciprocity), people are expected to help each other voluntarily and without utilitarian motives. It is taken for granted as a matter of fact that one helps and supports those who are socially close. The social exchange which takes place at this level of social distance consists of gift-giving: one assists and gives help to others without overt expectations of return, and the recipient is expected to reciprocate in a similar disinterested way at a later, unspecified point in time. The altruistic orientation of in-group relations, the mutual helpfulness and solidarity implies that utilitarian attitudes and market exchange are considered immoral in this part of the continuum.
As social distance increases, the disinterested, mutual assistance which characterizes close in-group relations turns more utilitarian. Among more distant relatives and neighbours, a more self-centred attitude is considered proper, and social exchange is conducted on mutual expectations of a certain amount of self-interest. Where the close relations of the household prescribe that members should help and assist each other and contribute to the common household without self-interest, the expectation among more distant relatives and neighbours is that interaction involves a certain attitude of ‘something for something’ in addition to the altruistic norms of helpfulness and gift-exchange of in-group relations (balanced reciprocity).
Members of other tribes are ‘strangers’. In intertribal relations where social distance is largest, the principle of social exchange is ‘something for nothing’ (negative reciprocity), reflecting an absence of moral commitment and solidarity. If gift-giving and attitudes of mutual assistance are typical of close social relations, stealing, mistrust and hostility characterize relations to outsiders. Towards strangers there are no moral bonds which restrict opportunistic behaviour from either side and, as Sahlins notes, it may not only be acceptable, but even laudable to raid cattle and steal horses from other tribes.
Market transactions play a limited role in these communities. The openly utilitarian motives behind the exchange of goods goes against the dominant norm of disinterested assistance and gift-giving among members of close kinsmen and villagers, and it is therefore banned from this social area. For instance, Bourdieu (1995) notes that it came as a shock to a woman from the village he studied that another woman had sold milk to a fellow villager (‘Milk! You sold him some milk?!’) instead of giving it away for free.
Utilitarian market transactions are therefore conducted with outsiders where large social distance allows for utilitarian and self-centred behaviour. Interaction at this level of social distance implies a relatively high level of mistrust and even fear. It is generally expected that the other person will take advantage of the situation and cheat if possible; haggling is the norm, and trade relations can sometimes be dangerous and lead to open conflict. In some societies the practice of ‘silent trade’ has developed to overcome the barriers to trade that follows from mistrust and opportunism. The sellers leave the goods at a certain place, retreat and signal at a distance using fire or drums to the potential buyers that the goods are ready, and the buyers can then appear, exchange the goods and leave without risking open conflict.
Kinship and neighbourhood define social distance, but it is not fixed once and for all. It is possible to manipulate kinship to shorten social distance, and gifts are used for the same purpose. Another person’s position in the kin-group is a primary indicator of the solidarity and reciprocity one can expect, and when kinship changes, these expectations change as well. Intergroup marriage between distant groups creates new relations of kinship, shortening the social distance between groups that otherwise may be hostile. ‘Fictive’ or ‘ritual’ kinship (Pitt-Rivers, 1973) is used for the same purpose. Friends can strengthen their mutual ties by blood-brotherhood, or they may become godfathers for the children of the two families. In both cases friends are formally brought into the circle of the family, the closest in-group with the attendant moral expectations.
However, gift-giving is probably the most important means to reduce social distance. As first observed by Mauss and Halls (1990), offering a gift to someone is an invitation to establish a closer in-group relation, and the acceptance of a gift entails an unspoken moral obligation to reciprocate in an unspecified future. Giving a gift is an invitation to friendship, and the acceptance of the gift implies that the recipient also accepts the unspoken moral obligation to return the favour with the same disinterested attitude at some future, unspecified point in time. Gift exchange and disinterested assistance is expected among in-group members, but it is equally used to create in-group relations. In Sahlins’s words, ‘friends give gifts, and gifts make friends’ (Sahlins, 1968; 2004).
Kinship and gift-giving determine a person’s position on the in-group/out-group continuum, but also relations of status and power. A father is the ascribed head of the individual household, and at the level of community, authority follows from being a member of a specific lineage or clan. Both the head of the household and the head of the lineage are supposed to maintain relations of in-group solidarity and trust with the other members of the kin-group who are supposed to return the benevolence with a corresponding attitude of disinterested compliance. The head of the household or the lineage are supposed to be benevolent and generous authorities who help and assist the subordinate members in accordance with the altruistic in-group morality, and the subordinates are supposed to comply disinterestedly and voluntarily.
A related type of in-group authority consists in the asymmetrical moral rights and obligations which follow from giving and receiving extraordinary gifts. The so-called big men of Milanesia illustrate the point. A big man amasses resources from his closer relatives in order to distribute them as gifts to more distant members of the community with the purpose of gaining their loyalty and backing. The big man achieves his authority by giving gifts which are so large that the recipients are unable to reciprocate. The gift places an unspoken moral obligation on the receiver to reciprocate, but as this is not possible, the moral obligation stays with the recipient and he becomes morally subordinate and dependent on the giver.
Where gifts are reciprocated by gifts of similar value, the exchange brings the individuals closer to each other as equals. In the case of the big man, the extraordinary gift not only brings the giver and the recipient closer to each other as friends, it also creates a difference in status and power between the exchange partners. Pitt-Rivers uses the term ‘lop-sided friendship’ to capture the difference between friendship between equals, and the vertical solidarity between big men and their retainers (Pitt-Rivers, 1973).
Both the head of the kin-group and the big man are benevolent authorities but whereas the authority of the former is ascribed through kinship, the authority of the latter is actively achieved. Or as Sahlins writes, kinship authority follows the principle of ‘noblesse oblige’ while the big man’s authority is constructed according to the principle ‘obligations create nobility’, i.e. through extraordinary gifts which recipients are unable to reciprocate at the same level, responding instead with subordination.
Sahlins constructed his general theory drawing on ethnographic reports from more than 30 different pre-industrial communities from all parts of the world, lending credibility to the claim that the morals of social distance are typical of pre-industrial, kinship-based, rural societies. Bourdieu’s analysis of a Khabylian village which shows identical principles in action gives further support to the assumption that the particularistic and graded differentiation between in-group-members and outsiders is a common, constitutive factor of pre-industrial society. White’s historical investigation of lord–vassal relations in medieval Europe, which shows that the lord’s authority relies on gift-giving while the vassal acts as a morally obligated retainer in an asymmetrical friendship, in the same way suggests that the morals of social distance and reciprocity are central and constitutive of pre-industrial society (White, 2005).
The collective morality prescribing altruism between in-group members is a norm that may be broken. As both Sahlins and Bourdieu note, the collective morality represses self-interest, but it is not eliminated. In Bourdieu’s interpretation, the prescriptive altruism functions as a cultural super-ego placing a prohibition on self-interest which nevertheless continues to exist as a latent, ‘misrecognized’ motive that may surface among in-group members in spite of its moral inappropriateness. When it does, the behaviour is subject to collective criticism and in extreme cases it may lead to ostracism. As White’s historical study shows, in vassalage and by extension in big-man relations, self-interested and opportunistic attitudes of the retainer towards the lord or big man are equivalent to betrayal, and according to the logic of social distance, it may transform the relationship into one of enmity, i.e. a relation between pure outsiders.
Modern organizations and nepotism
The morals of social distance and reciprocity explain what motivates nepotism and how it works, but they are not in themselves equivalent to nepotism. Nepotism presupposes that the particularistic social morals influence behaviours in a context where utilitarian and universalistic behaviours are expected. Nepotism exists where decisions are made according to the particularistic morals of social distance and reciprocity and the expected decision criteria are utilitarian and universalistic. It implies that tribal and peasant norms of in-group solidarity override the principles of the modern, industrial type of organization, which are either not taken into consideration, downplayed or broken.
Why should individuals who identify with the morals of social distance and reciprocity choose to deviate from utilitarian and universalistic norms? One answer is that universalistic behaviours appear as immoral when they are seen through the lenses of the pre-industrial social morals. The particularistic morals prescribe altruism towards in-group members; they lead to a negative perception of universalistic and utilitarian norms and thus to deviations from them.
Taking Weber as the point of departure (Gerth and Mills, 2007; Ritzer, 2000), modern industrial organizations can be seen as having two basic characteristics: they operate according to a utilitarian and instrumental rationality, and they have a formal bureaucratic structure with universalistic operating procedures and work roles that are ‘autonomous and superior to the holder’s extra-official ties to kith and kin’ (du Gay, 2000: 31).
Utilitarian and instrumental rationality implies that human and non-human resources are used as efficiently as possible to achieve organizational ends. Managers are supposed to act in accordance with the self-interest of the organization, maximizing profits or other non-monetary goals and place these aims above other considerations. When the utilitarian attitude to people is evaluated using the morals of social distance as benchmark, the conclusion must be that the organization and its managers essentially treat the employees as strangers. The morals of social distance prescribe disinterested helpfulness towards in-group members, and they permit self-interested attitudes only where social distance is large. From the tribal and peasant perspective, the utilitarian use of individuals does not conform to the way in-group members are supposed to behave towards each other but rather to the kind of behaviour that one expects from strangers who are not to be trusted.
The universalistic rules of bureaucracy may be interpreted along similar lines. Also this dimension of the rational organization can be expected to meet resistance and disapproval when in-group members see it through the cultural lenses of social distance and reciprocity. The bureaucratic principle that decisions should be made ‘without consideration of the person’ (du Gay, 2000) and according to the rules means that in-group members and outsiders must be treated equally. However, treating in-group members as if they were no different from members of the out-group runs counter to the particularistic morals of social distance and reciprocity which prescribe that the former should be treated altruistically and the latter opportunistically. The universalistic rules send the implicit but unambiguous message that, in the organization, in-group members should not expect to receive the disinterested help, favours and assistance they are morally entitled to.
If managers treat in-group members according to formal rules ignoring their kinship obligations or obligations created by gifts, they may see themselves as acting immorally, and other in-group members may criticize them for being self-centred and not providing the appropriate help to their fellows. It should therefore come as no surprise if individuals in societies where tribal and peasant morals remain influential feel inclined to reject the utilitarian and universalistic principles of the modern, rational organization. When this happens, the organization may at the surface appear to operate in conformity with utilitarian, instrumentally rational norms and formal rules; but beneath the surface one may find an alternative network of behaviours based on kinship obligations, mistrust to outsiders, obligations due to gift exchange and big men.
Nepotism in African and Latin American organizations
This section presents evidence from two qualitative studies from Africa and Latin America showing the importance of nepotism and the underlying morals of social distance and reciprocity in organizations in these two developing areas. As will be seen, there are important similarities between organizational behaviour in the two regions and between both and the pre-industrial morals of social distance and reciprocity. Pre-industrial social morals often replace the instrumental and universalistic organization, and there is clear evidence of a tension between the two systems.
The texts used in the analysis are John Kuada’s Managerial Behaviour in Ghana and Kenya: – A Cultural Perspective (1994) and Osland et al.’s ‘Organizational Implications of Latin American Culture’ (1999) which primarily refers to conditions in Columbia and Nicaragua. Both works contain illustrative examples of organizational behaviours the authors have gathered from their own experience as foreign consultants or natives of the two continents. Independently of each other, they illustrate the strong presence on the two continents of nepotistic behaviours that are guided by the same morals of social distance and reciprocity that anthropologists and historians have found in pre-industrial societies.
Ghana and Kenya
According to Kuada, it is not possible to understand organizational behaviour in Africa without taking into account the role of family and kin and their importance for employees. Family members support each other and each individual is expected to contribute to the well-being of the family, the in-group: … all values are determined by reference to the maintenance, continuity and functioning of the family group. Within such a social framework, all purposes, actions, gains and ideals of individual members are evaluated by comparison with the fortune of the family as a whole…No member of the family who is in genuine need should be denied assistance, no matter what personal miscalculations might have landed him in hardships. (1994: 74)
Nepotism is found at all levels of society. In organizations ‘benevolence is selectively administered, based on the culturally prescribed obligations towards kinsmen’ (p. 136) and, referring to Kenyan politics, Kuada notes that, whenever one of the large ethnic groups has reached political power, they have invariably sought to place members of the ethnic group in influential positions in order to promote their interests (p. 113).
As suggested by Sahlins’s model, membership in kin-groups is gradual, ranging from close to more distant members. Within the organization this leads to a preferential treatment of members of one’s in-group and as the social distance to other individuals increases, solidarity declines. ‘The degree of benevolence accorded to a subordinate depends on the strength of affinity. Family members tend to be treated more warmly than distant kinsmen, and ethnic links are looser than close links’ (p. 135).
At the out-group pole of the in-group/out-group continuum, where opportunism and enmity is the rule, the social morals give rise to tribal enmity or conflicts, and organizations do not go free. In ethnically diverse organizations there is generally little communication or collegiality across the ethnic boundaries and ‘relationships between peers at each level of the organizational hierarchy can hardly be cordial and mutually reinforcing’ (p. 172). Managers tend to mistrust colleagues from other ethnic communities, employees have little trust in managers from different tribes and there is always the suspicion that managers give preferential treatment to members of their own kin. ‘Where critical feed-back is received, subordinates are not likely to accept them as objective assessments of their performance, but tend to interpret them as evidence of discrimination’ (p. 172).
In other words, there is a common expectation that the rule-based, universalistic and impersonal principle of equal treatment is suspended and replaced by the morals of social distance and reciprocity involving preferential treatment of in-group members and discrimination against outsiders.
Gift-giving maintains or develops horizontal relations when the receiver is able to reciprocate at the same level, and it reproduces or creates vertical relations when gifts are extraordinary and the receiver is unable to return a favour of similar or higher value. On several occasions, Kuada refers to a type of moral authority which resembles Sahlins’s big men where status and influence is based on extraordinary gifts. If a superior is related to a subordinate, he is obliged by the in-group morality to grant special favours to the subordinate who at the same time is supposed to accept the moral debt which follows from the gift: … he is committed to protecting his subordinate’s interest within the work environment, granting him privileges and giving him disproportionate opportunities for advancement through the ranks. By so doing, he shifts the burden of his upkeep as a family member on to the organization. The subordinate, on the other hand, is obliged to grant his superior unqualified loyalty and protection within the organization to the extent possible within his sphere of influence; in this regard the relationships between superiors and subordinates assume a highly personal and subjective character. (p. 135)
In Kenya, big-man authority is labelled by the ritual kinship term ‘godfatherism’ and it is commonly known that promotions often take place by ‘catapulting’ loyal subordinates to higher positions by persons in power who thereby build networks of loyal retainers. This practice often conflicts with the formal organization. ‘Where the top-level managers may arrive at their positions due to the intervention of influential personalities within the community, rather than on the basis of merit’, Kuada argues, ‘the formally declared objectives of the organization can be disregarded for a long time’ (p. 132).
When an employee helps a relative to get a job, or a superior dispenses extraordinary favours and establishes himself as a big man or patron, they may go against the norms of meritocracy, efficiency and the rules of the organization and thus act in a way that is illegitimate from the modern, instrumental and formally rational viewpoint. But this behaviour is at the same time morally right in the sense that it lives up to the requirements of in-group solidarity and it is in accordance with normal and expected practice as defined within the framework of the morals of social distance and reciprocity. In this context it should not be taken for granted that the principles of the modern organization should be followed. To act according to the impersonal criteria of instrumental efficiency and formal, universalistic rules may in fact be morally dubious because it increases social distance, placing in-group members at the same level as strangers.
Columbia and Nicaragua
The purpose of Osland et al.’s article is to decipher what is at work in Latin American organizations besides the phenomena covered by the ‘usual organizational behaviour concepts’. The authors emphasize that they do not wish to generalize and that their analysis only covers what they call ‘troubled organizations’. However, it is striking how their observations resemble those made by Kuada in Africa, suggesting that organizational behaviour in this section of Latin American organizations is rooted in similar social morals. The Latin American countries do not have the tribal cultures of Kenya and Ghana, but on both continents there are strong morals of social distance and reciprocity that influence organizational behaviour.
In the first place, Osland et al. note that the literature on Latin America and their personal experiences indicate that Latin American cultures generally have a fairly low level of trust in people who are not family and close friends. When you are in serious trouble, Latin Americans say that you can only trust your family, which they define as the extended family. The strong family unit is what earns Latin American cultures the collectivist label; families watch out for their members in return for loyalty. The families’ boundaries are extended even further by the practice of compradrazgo, coparenting in which a child’s godparents move beyond friendship to formalize a closer bond to the family in the baptismal ceremony. In this way the families create a larger group of people they can trust. (p. 224)
The authors quote a saying which illustrates the tendency to subordinate formal rules to the morals of social distance and reciprocity: ‘For friends everything; for strangers nothing and for enemies, the law’ (Rosenn, 1988). The saying refers to the law and not to formal organizations, but the principle is the same: the point of departure for dealing with other persons is their position on the in-group/out-group continuum which overrides the commitment to the universalistic principles of the law. The law becomes an instrument in conflicts with enemies and may be ignored in in-group relations, i.e. the law is reinterpreted and particularized according to the morals of social distance and reciprocity. To argue here that the law should be kept irrespectively of social distance and that it applies to friends and foes alike obviously goes against the in-group/out-group morality ironically expressed in the quotations – it implies a too distant treatment of insiders and a too intimate treatment of outsiders.
In the following quotation Osland et al. refer to a situation that rather precisely reflects the anthropological finding that utilitarian market exchange is appropriate in relations to strangers but not between in-group members: When Joyce’s job required constant travel around Colombia in the 1970s, she was frequently bumped from flights even though she had confirmed reservations. After a while, she discovered that when travellers handed over their passports for inspection (a requirement for foreigners and Colombians alike), some passengers were enclosing money for the counter attendant. For a small facilitation payment, their names went to the top of the list, forcing passengers who may have had prior reservation to lose their seat. Bribing counter attendants did not seem like a palatable or reimbursable option; by accident, she stumbled on a functional equivalent to a facilitation payment. Because she travelled so often, she became personally acquainted with the counter attendants of all the airlines in the major airports. Once they considered her a friend, they made sure she had a seat – even when it meant bumping other people or finding her a seat on a competing airline. (p. 221)
The next example shows the change of status which can follow from nepotistic gift-giving. There are numerous instances of people making special arrangements for others once a personal relationship has been established. This is how the game is usually played. When you make a request of a stranger in a position to grant you something you need, the first answer is often a no – a bureaucratic response that reflects the numerous omnipresent rules. (‘One can’t do that. It’s not permitted. My jefe (boss) is out of town, and he is the only one with authority to do what you want’). The supplicant’s next step is to make the other party see them as a person or show that they empathize with the other’s personal situation (‘what a shame. I came all the way from…to talk with him, and if I don’t have an answer for my own boss he’ll be upset with me’ Or ‘Gee, it must be tough having to deal with all these impatient people demanding to see your boss’). If this does not do the trick supplicants can throw themselves on the mercy of the other. (‘I know it is asking a lot, but is there ant way we can surmount this obstacle? Can you help me with a solution?’) This allows the person in power to be helpful and make a personal exception for the supplicant, and everyone goes away pleased with the encounter…The latter gets to feel both magnanimous and powerful. (p. 222)
Within organizations managers may hand out favours to employees constructing ‘feudos’ with themselves as patrons and other employees as retainers, a practice that may not be received well by efficiency-seeking, modern managers: In the 1970s, Asbjorn took over the directorship of a development agency in Colombia from a man who walked around with a wad of bills in his pocket, dispensing largess. The previous director was also an expatriate, but his management style as ‘the grand patron’ closely fit the community’s learned expectations about how a boss should behave. The result of this style was that both employees and clients expended a greater amount of energy making personalized pleas to obtain resources from both Asbjorn and Joyce…than to activities that would further their own development. Therefore Asbjorn took a more bureaucratic stance (‘these are the organization’s resources, not mine, and let’s all follow procedures that encourage development rather than dependence’). Although the community resisted at first, they came to accept that the rules of the game had changed. (p. 228)
To sum up, the two studies from Africa and Latin America show that the morals of social distance and reciprocity play a considerable role in organizations on both continents. In-group members are given preferential treatment and differentiated from outsiders who tend to be mistrusted, and gift-giving is used in in-group relations and to build up positions of power and status, while utilitarian, monetary exchange is used between strangers. The instrumentally rational and formal organization is sometimes put to a side in order to live up to the moral obligations towards in-group members: the particularistic solidarity may be in conflict with the universalistic principle of the formal organization, and when this is the case, in-group solidarity may be prioritized above the rules of the modern organization. To act according to instrumental and universalistic, formal rationality towards in-group members may be seen as morally problematic. It enlarges social distance, putting family and friends at the same moral level as strangers, and neutralizes the mechanisms used to create social solidarity and obligation in preindustrial communities and kinship networks. The rational, bureaucratic organization may appear as unattractive, giving little ground for a strong commitment to its principles and a corresponding willingness to put the rules to a side and act in conformity with the old social morals.
Nepotism and socioeconomic change
Following Bellow (2003) it has been argued that nepotism is particularly widespread in organizations in societies that are in transition from pre-industrial to industrial society, i.e. the developing countries. It has been suggested that the morals of social distance found in organizations in Kenya, Ghana, Nicaragua and Colombia are a legacy of a past pre-industrial society which continues to influence behaviours in the culturally different organizations of modern, industrial society. The question now is: Do the available quantitative data support this assumption? And is there statistical evidence that the findings from the African and Latin American countries are representative of developing countries in general?
Transparency International’s report from 2009 includes a question on nepotism in the ‘Bribe Payer’s Index’. The question refers to ‘the use of personal and familiar relationships in public contracting’ (Transparency International, 2009: 405). The answers reflect the degree to which the particularistic solidarity with in-group members overrides the economic and utilitarian motives that Transparency believes should guide decisions in a free market. 1
Trompenaars’s particularism/universalism index contains the following questions on nepotism:
Whether the respondent would hold back negative views on a restaurant of a friend if he or she should evaluate the restaurant as a food critique for a newspaper.
Whether the respondent would expect a doctor who is a personal friend to write a false
statement for an insurance company.
Whether the respondent would lie about an accident where a friend drove too fast in his car and hit a pedestrian.
All questions refer to deviations from rules that are supposed to apply to everyone in order to help an in-group member.
In addition to these two questions which refer to nepotism as a particularistic in-group solidarity which motivates deviations from utilitarian and universalistic norms, Hofstede’s individualism/collectivism dimension measures the strength of the particularistic solidarity. Collectivism implies that people identify with their in-group whose members they ‘owe a life long loyalty’, in contrast to the ‘they-group or out-group’ (Hofstede, 2001: 226). Hofstede’s dimension can thus be used as an indicator of the strength of the morals of social distance and reciprocity in society.
Industrialization implies a shift from agriculture to industry and service. The relative size of the population occupied in agriculture and the amount of GDP provided by agriculture can be used as indicators of industrialization: the larger the agricultural sector of a country, the less industrialized it is.
Table 1 shows the correlations between Transparency International’s data on nepotism, Hofstede’s collectivism-individualism dimension and the data on the agricultural sector (occupation in the agricultural sector and the economic contribution of agriculture to GDP have been added into a single index).
Nepotism and the socio-cultural context: Transparency International’s data
N = 18. Spearman’s rank order correlations. CIA, 2010; Hofstede, 2001; Transparency International, 2009.
The city-states Singapore and Hong Kong have not been included: the percentage of agriculture in both cities is zero. The variable ‘agriculture’ is the average of the percentage of the labour force employed in agriculture and the economic contribution of agriculture in percentage of GDP. Hofstede’s index has been reversed to give collectivism the highest scores and individualism the smallest. Listwise deletion.
The relative size of the agricultural sector, collectivism and nepotism are all positively and significantly correlated as assumed: low levels of industrialization go together with a strong particularistic in-group solidarity which motivates deviations from utilitarian norms.
Although the data are not sufficient to enable any definitive conclusions, the findings suggest that nepotistic deviations from utilitarian norms indeed are more widespread in societies that are in the earlier stages of industrialization compared to more industrialized countries. In the former, the tribal and peasant norms found in small agricultural communities continue to play a central role in business relations, and they motivate deviations from utilitarian norms in favour of in-group members. Trompenaar’s data point in the same direction, cf. Table 2.
Nepotism and the socio-cultural context: Trompenaars’s data
N = 12. Spearman’s rank order correlations. CIA, 2010; Hofstede, 2001; Trompenaars, 1994. Only countries for which there is information covering all three questions have been included in the nepotism indicator in order to ensure reliability. The note in Table 1 also applies here.
In societies where a large proportion of the population lives in rural areas and agricultural production constitutes a large part of GDP, there is also a tendency to break universalistic rules in order to help in-group members. Compared to more industrialized countries, there is a higher propensity to help in-group members and break universalistic rules in societies that are in the earlier stages of industrialization. The larger the agricultural sector, the stronger the in-group/out-group collectivism and the tendency to break universalistic rules in order to help in-group members.
On this background, it is reasonable to explain the nepotism reported by Kuada and Osland as related to the relatively low level of industrialization of the two regions. In Kenya, 75 percent of the population is occupied in agriculture, and 21 percent of GDP comes from agriculture. In Ghana the corresponding figures are 56 and 37 percent. The two Latin American countries are more industrialized, but their agricultural sectors are also large compared to the industrialized countries of the West. In Nicaragua 29 percent of the population works in the agricultural sector, which contributes with 29 percent to GDP; in Columbia the figures are lower with 18 percent of the population in agriculture and a contribution to GDP of 9 percent. In the developed countries the corresponding figures are on average 3.5 and 1.5 per cent (CIA, 2010).
The conclusion then seems to be that the morals of social distance and reciprocity which anthropologists have found to be constitutive of tribal and peasant societies continue to influence behaviours in the earlier stages of industrialization and diminish as the social and economic importance of the rural sector diminishes. Ghana, Kenya, Nicaragua and Colombia are developing countries, and it can be assumed that Kuada and Osland’s findings from these countries are not specific to these four countries but indicative of conditions in organizations in developing countries in general.
Managerial implications
How should managers cope with nepotism in developing countries? In the first place, managers may choose to accept the coexistence of both sets of norms within their organization and seek to manage the ambiguity and contradictions that result from the coexistence of the two qualitatively different principles, the morals of social distance and reciprocity and the utilitarian and universalistic norms of the modern, rational organization. The acceptance of nepotistic ambiguity as a fact of life requires that managers are able to manoeuvre in this context and find a balance between their own and their subordinates’ particularistic obligations and the principles of the rational and formal organization. It implies managing organizations such as those described by Kuada and Osland et al.
Instead of accepting the ambiguity managers may choose to disambiguate the organization. They may attempt to make the universalistic and utilitarian principles dominant, or they may take the opposite path and ground the organization on the morals of social distance and reciprocity.
The first option implies that managers actively seek to eliminate the influence of kinship, friendship, gift exchange and big-man authority together with the associated discrimination of outsiders, imposing a clear boundary between the formal organization where the utilitarian and universalistic principles are dominant, and the informal organization and private sphere of employees. Eliminating the particularistic morals from the areas where equal treatment of all and economic utility are expected does not mean their total elimination from the organization, but merely that the rational core is protected as an autonomous and impersonal sphere.
Reactions by managers to the two quotations presented in the introduction of this paper illustrating the existence of nepotism in Kenya and Mexico point in this direction. The CEO of Kenyan Airlines thus reacted to the interview saying: ‘If I am employing someone because they come from a particular tribe and not because they are qualified, then the results would be disastrous for the organization.’ As a consequence, he had decided to implement a policy of ‘having committees for interviewing and openly discussing the problem’. In Mexico, the CEO of the agency that conducted the survey commented that ‘There are various ways to confront the problem, the most important being the implementation of company internal rules that prohibit this type of practice and to make all decisions about wages and promotions on the basis of the real skills of the individuals that allow the company to achieve its goals.’
In the literature on African management, Hyden (1983) argues in favour of this approach arguing that organizations ought to learn from Weber and separate the formal organization from ‘the economy of affection’, i.e. the morals of social distance and reciprocity. Hyden suggests that managers should be stationed outside their tribal areas in order to reduce the moral pressure from the in-group.
However, one drawback of this strategy is that the managers are foreigners in the areas where they are stationed and thus likely to be treated with mistrust by the local population. Within the organization, the imposition of universalistic and utilitarian principles runs counter to the obligations that in-group members have towards each other. Equal treatment of all and utilitarianism are not neutral principles when they are seen through the cultural lenses of the morals of social distance and reciprocity, and the strategy of eliminating the particularistic norms from the organization may be perceived negatively and resisted.
Moving in the opposite direction, managers may choose to rely on the morals of social distance and reciprocity and instead downplay the utilitarian and universalistic norms. The foreign manager who was in charge of a co-operative in Nicaragua before Asbjorn Osland took over seems to have followed this line, managing as a big man according to the expectations of the local community. Joyce Osland’s description of the former manager is critical, but the possibility exists that the former manager chose to behave like a big man because it helped him achieve his objectives. In fact, the big-man style of management may have been an efficient cultural adaptation of western management to local conditions.
Fadiman (2000) describes African organizations and business relations in which kinship, friendship and big-man relationships are a fundamental and efficient principle of cooperation and he suggests that western managers should manage according to these principles. He describes a classical South African firm in terms that are practically identical to those used by Sahlins when he outlines the structure of the pre-industrial village. The firm is organized as a set of concentric circles with the CEO in the centre and more distant members of the kin-group in the social periphery of the organization. Between organizations business is conducted on the basis of trade-friendships where self-interest is partially replaced by altruistic, mutual helpfulness in which the open expression of utilitarian motives is inappropriate (Fadiman, 2000). The organization is ethnically homogeneous, ensuring trust and disinterested commitment by the employees. In the South African management literature, the strategy of designing organizations using pre-industrial forms of cooperation is referred to as Ubuntu, ‘a value that is built on the assumption that people are only people through other people’, and it is usually opposed to western principles of management (Jackson, 2004).
While it may not be possible for foreign managers to establish a company based on kinship, other aspects of the particularistic social morals may be used. Fadiman (2011) suggests that foreign managers should ‘give gifts and continue to give’; they should ‘play big man’ in order to develop obligations, but also become retainers playing ‘little brother’ and ‘affiliate with local clans’.
The most viable option is perhaps the one practised by some of the African managers interviewed by Kuada who take employees’ in-group obligations into consideration as an aspect of their explicit and formal management (Kuada, 1994: 82, 90). This choice implies that the formal organization is made to include particularistic concerns. Personal family obligations are not simply a private matter of no concern to the organization as in Hyden’s proposition, nor are they made a dominant principle of organization as described by Fadiman.
Jang and Chung (1997) show that this practice is common in Korean companies such as Samsung, Hyundai and the Hankuk Dojaki group. These companies deliberately use paternalistic management based on filial piety and moral obligation to superiors, but not in contradiction to utilitarian and universalistic principles. For instance, the Hankuk Dojaki group awards a ‘King of Filial Piety’ prize to parents of young employees for encouraging their filial piety and commitment to the paternalistic management practised by the companies of the group. Paternalistic management is formally accepted and supported; it is not squeezed out of the organization and into the private sphere, nor is it used in a purely informal and personalistic manner. Rather, it is a pre-industrial form of authority that has been coopted by the modern, industrial organization and codified as an element of the formal structure.
Conclusions and implications for research
The tendency to help people who are socially close and give them preferential treatment may be a universal phenomenon, but it is not evenly distributed. It is influential in developing countries where it is associated with a particularistic social morality rooted in the pre-industrial past of these countries. Nepotism is an expression of the morals of social distance and reciprocity which are a central frame of reference in tribal and peasant communities and which continue to play an important role in organizations in the earlier stages of industrialization and modernization.
While the morals of social distance and reciprocity prescribe that in-group members should be treated with disinterested helpfulness and given preferential treatment, the modern, rational organization implies that in-group members should be treated according to instrumental rationality and universal standards. From the perspective of the particularistic morals of social distance and reciprocity, this means that in-group members should be treated on the same terms as strangers. This is not attractive, and as a consequence, the tendency to prefer cooperation and forms of organization based on the pre-industrial social morals may be reinforced.
As industrial society expands and the rural economy and society diminishes, the morals of social distance and reciprocity also tend to play a lesser role. Collectivistic morals of social distance and reciprocity are increasingly replaced by individualism, and nepotism gradually plays a less influential role both as a blueprint for collective organization and as the hermeneutic background people use to make sense of society and organizations. However, it remains a factor that managers in developing countries must deal with.
Nepotism is a cross-cultural encounter between tribal and peasant social morals on the one hand, and the principles of the modern organization on the other. If we add that it is ‘one of the least-studied and most poorly understood human resource practices’ (Vinton, 1998), nepotism appears as a relevant and almost virgin field for cross-cultural management research. Several directions of research could be useful in future empirically and theoretically oriented studies.
Field studies using the anthropological theory of social distance and reciprocity as the theoretical point of departure seem to be a natural extension of the present analysis. Kuada’s and Osland et al.’s studies are based on interviews and participant observation, but without using Sahlins’s theory. Interviews or surveys based on Sahlins’s model may give more qualitative insight into the social logic of nepotism and better estimates of its distribution.
These could include comparison between organizations in different developing countries or comparison between organizations in developing and developed countries in order to explore to what extent the pre-industrial social morals differ across developing countries and to what degree nepotism in the developed countries is motivated by a similar logic.
The relationship between socioeconomic change and nepotism may be explored further using other quantitative macro-indicators. The World Values Survey (n.d.) which contains a variety of questions on attitudes to family, friendship and work is one possible source that could be explored together with the few indicators that are available on nepotism.
A more comprehensive review of the way nepotism is treated in the literature on organizational behaviour in developing countries is needed in order to clarify how the concept is used and the presuppositions underlying the different uses. For instance, Transparency International’s use of the concept is different from Bellow’s, probably due to their different political-cultural orientations.
Finally, nepotism may be a good starting point for the development of an alternative concept of a concept of culture that relates shared meanings and values to the socioeconomic conditions of society and their transformation. Nepotism is a cross-cultural encounter, not between individuals from different ethnic groups, nations or civilizations, but between social norms and behaviours rooted in pre-industrial society and values and principles typical of modern, industrial society. Culture in this sense is not the shared meanings and values of different groups; it is a set of values and principles that reflect changing socio-economic conditions that may be common to a variety of groups.
Theoretical development along these lines implies a sociological approach to culture that is close to classical sociology which primarily sees values and norms as being related to socioeconomic conditions and only in the second place to countries or civilizations, as e.g. in Inglehart’s and Giddens’s theories (Giddens, 1990; Inglehart, 1997). As the similarities between the African and Latin American cases show, it is not primarily the differences between nations or civilizations that explain nepotism but the fact that they are countries in transition from one type of society to another.