What some consider to be normal business rules do not always apply in a family business context, eg many businesses consider nepotism to be an unethical practice. The business and its stakeholders must be protected from unworthy relatives drawing exorbitant salaries and the knock-on effect such hires have on the rest of the workforce.

In a family business setting, however, an individual might prefer to hire relatives for some of the following reasons:

1. •

   trust—family members can be trusted to look after the interests of the business and the family

2. •

   commitment—family members can be more committed to their jobs and work harder, for longer and for less pay, so a satisfactory return is generated even if family members are less talented or qualified than outsiders

3. •

   innovation—family members can be a creative source of effective new ideas to develop the business because they understand better than anyone what the business means to the family

4. •

   long-term view—family members can demonstrate long-term commitment to the business which would be welcomed by various stakeholders