-Top Lal Panthi

There is a long and varied history of business in Nepal.  In 1936, after the formulation of the Nepal Companies Act, the Biratnagar Jute Mills was established as the first joint-venture industry. A few more government-owned industries were opened in the 1950s and 60s, often with support from China and the then USSR. From the late 1960 many other joint ventures were established, some of them are still in operation and some organizations have been closed due to the lack of professional human resource and other factors but pessimistic mindset always blame to the political system only.

After 1990, the economic revolution of the globe has invited economic reforms in Nepal, there after many business houses were mushrooming as roundabout Indian culture in Nepalese business organizations, where objectives of business organizations and corporate governance have not matched with each other. Scenario shows that no single organization is able to find their expected human resource; on the other hand no competent candidates are finding their appropriate workplace for the job.

Lacks of effective job analysis in Nepalese business organizations, many business organizations are not achieving their expected goals and objectives on time, because many business organizations are not committed to the guidelines of professionalism in business organizations which may support to develop competitive advantage in their business. There are many reasons behind the circumstances, one of them is nepotism. Nepotism is still problematic in most circumstances in Nepalese business houses. A number of studies have investigated and explained its negative implications in leadership and organizational efficiency. Take note of the following:

Promotes Corruption:  Nepotism lacks appropriate organizational structure, even if there is, cannot meet the interest of their stakeholders. It hinders to the job analysis as well as job evaluation. If jobs are not evaluated on time, best performers are not interested to work in the organizations, it invites absenteeism and employee turnover where looser and inferiorities remain in the organizations so both in politics and workplace, family members can foster connivance that facilitates corrupt practices.

Authoritarian Leadership:   In absence of effective human resource management, many organizations fail to achieve their vision; they cannot hire ethical and competent managers due to negligence of public administration. You may review Nepalese business organization, will find that employees are being used as machine. Non professional business managers are engaging to promote unethical practices and corruption. They should aware to the business world but their existing knowledge is not sufficient for the learning. Also scenario shows that these types of managers never able to place the organizational goals subjectively. Having a leader surrounded mostly by people familiar to him or her can enable authoritarian leader. Note that this type of leadership has its pros and cons depending on the situation.

Organizational Incompetency: Nepotism means hiring people based primarily on kinship and not on actual abilities and potential contribution to the organization. These can harm the competency of the organization. In this globalization context, many business organizations and business manager will fail to compete in international level.

 Harms Leadership: Family members can undermine authority by using connection and number to scheme against their leaders. These members can also exert their familial connections and entitlement toward non-relative authorities.

Effects of Family Problems: In an organization composed primarily of people who are related to one another, problems within the family can leak further to the organization. It can be impossible to separate family affairs with organizational affairs.

 Organizational Politics: Similar to connivance against leaders, relatives in an organization can resort to power play to undermine non-relatives, advance their own interests, and neglect their responsibilities.

Hinders Growth: A general disadvantage of nepotism is that it can hamper the growth or progress of an organization due to workforce incompetency, harms on leadership, and the possibility of corruption, among others.

Based on the drawbacks mentioned above, nepotism is not suitable in specific situations or contexts. In politics and governance, it contradicts the advantages of democracy and leadership through representation. Moreover, in workplace, especially in medium and large enterprises, it reduces the effectiveness and efficiency of an organization.

So, Nepalese businesses are expected to perform under the concept of public administration with corporate governance then only they can fulfill the expectation of their stakeholders and survive socially.

(writer is Lecturer of Business environment and strategic management St.Xavier’s College, Maitighar,Kathmandu)