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Family Business: Compensation/Discrimination

What are the ethical issues in this case? The given case highlights a number of ethical

issues and concerns that are against the norms and defined policies of the company. The main

ethical issues include:

High Commission – Greg, who is Eddie’s, the General Managers brother is paid a lot more

commission as compared to other technicians besides any extra effort or education


Bonding – Greg, Eddie and Brad often have lunch together while no other technician is

invited to sit with them.

Favoritism – Because of personal relationship and favoritism, Eddie assign easier and high

commission paying jobs and tasks to his brother Greg.

Is a family business different from other types of businesses with respect to employee

treatment? Several past studies and literature have highlighted that family businesses are usually

and majorly run by family members and are less strict in terms of rules and regulations (Parker,

2011). In family businesses, family members are given priority over other external employees as...

Argument 2

What ethical dilemmas do favoritism, cronyism, and nepotism present?

The biggest dilemma presented by favoritism is that, under various other names, few people

see it as a problem. Connections, networking, family-everyone has drawn on these sources of

support in job hunting in the private sphere.

And everyone can point to instances where cronyism or nepotism is an accepted fact of life

in political sphere, as well. John F. Kennedy, for example, appointed his brother Robert as attorney
general. Every president and governor names close associates to key cabinet positions. Mayors

put those they know and trust on citizens committees and commissions. Friends and family can

usually be counted on for loyalty, and officeholders are in an advantageous position to know their


So, what's the problem?

The first issue is competence. For cabinet level positions, an executive will be drawn to

experienced, qualified candidates, but historically, the lower down the ladder, the more likely for

someone's brother-in-law to be slipped into a job for which he is not qualified. The American Civil

Service Act was passed in 1883 in large part because so many patronage jobs, down to dogcatcher,

were being filled by people whose only qualification for employment was their support for a

particular party or candidate. Also, the appearance of favoritism weakens morale in government

service, not to mention public faith in the integrity of government.

Reasonable people will differ about the appointment of friends and family in high-level

positions, but public officials should be aware that such choices can give the appearance of

unfairness. According to the National Conference of State Legislatures, 19 state legislatures have

found the practice of nepotism troubling enough to enact laws against it. Others may restrict the

hiring of relatives or friends in more general conflict-of-interest rules.

Public officials should also note that dilemmas involving favoritism extend beyond hiring

and contracting practices to the more general problem of influence. Golfing partners, people who

come over for Sunday dinner, members of the same congregation all are likely to exert a greater

influence over an official than a stranger might. Council members, mayors, and legislators must

make special efforts to ensure that they hear all sides of an issue rather than just relying on the

views of the people they know. Further, many conscientious lawmakers have discovered that they
must change their patterns of socializing when their work involves many decisions affecting

friends and associates. At the least, they may choose to recuse themselves from votes where social

relationships may exert undue influence.