Wherever you work in the world, nepotism – favouring friends and relatives over outsiders – is probably part of the business culture, whether blatant or hidden.

Just ask Ana Patricia Botin who succeeded her father as head of Spanish banking giant Santander. Or Rupert Murdoch, who installed his sons as CEOs of media companies News Corp and 21st Century Fox . Or even the one in five UK MPs who employ a family member to do their back-office work.

While nepotism might be universal, different countries have polarised attitudes towards it.

There’s hardly ever any open competition for jobs.

For example, in the US, federal law prohibits government workers employing a member of their family, though it’s not illegal in the private sector. And in both the US and UK employers that promote friends and family above other workers could well be opening themselves up to expensive discrimination claims. 

READ MORE: Six tales of top-level nepotism

Meanwhile, in China, the state anti-corruption watchdog officially takes a hard line on nepotism and corruption – targeting the powerful ‘cliques’ it says are controlling key businesses.

However, in places like Italy or Spain, being recruited or promoted for who you know, rather than what you know, doesn’t raise any eyebrows. It is often still viewed as ‘business as usual.’

Swiss-born Valerie Berset-Price, founder of human resources company, Professional Passport, which helps companies deal with cultural differences, said that where she grew up: “if you had the ability to recommend friends and family, or to hire them, then you’d do it. It was a reciprocal thing to keep them close in a tight safety-net.”

However, when she moved to the US and studied business at university, she was fascinated by the way the syllabus stressed that nepotism was always negative, and even criminal in some situations.

“Until then I really didn’t know what that the word nepotism meant,” she said.

Once she launched her business she was also surprised that friends, working in senior positions, for example, at blue-chip companies, didn’t want to recommend her services.

“This wasn’t because they didn’t want me to succeed, or they didn’t like me, or believe in what I did,” said Berset-Price. “It’s because their company policies said I would have immediately been disqualified from any work because I was their friend.”

Lots of times an inferior candidate is given something because they’re connected to someone in charge either directly or indirectly.

The different perceptions come down to a matter of culture, of course. Countries where maintaining close family-ties are a deep-rooted part of the national culture (often bolstered by a religion), tend to see nepotism as a natural and desirable way for relatives to look out for one another and prosper.

“In Spain there’s hardly ever any open competition for jobs,” said Joe Haslam, business owner and executive director of the owners and entrepreneurs management programme at Madrid’s IE Business School, who lives and works in Milan, Italy.

“A job is also never regarded as 100% yours – it’s almost like you’re keeping it warm for another family member. Here, when a relative doesn’t have a job it’s seen a family’s collective problem – so there’s definitely lots of times an inferior candidate is given something because they’re connected to someone in charge either directly or indirectly.”

This approach certainly has some upsides. As Haslam explained, family connections foster loyalty, so employers don’t have to worry about talent being poached by the competition. It’s also easier (and cheaper) to hire within existing networks rather than going through the hassle of an open application process.

Yet, everyday acts of nepotism can harm an economy as a whole. For a start it can put off foreign investors: according to the EU’s 2014 Anti-Corruption Report 67% of investors see nepotism as a  ‘very serious or quite serious problem’ when running a company in Greece.

More seriously, according to one study the corruption that to goes hand in hand with nepotism can cut lives short. Child mortality rates in countries with high levels of corruption are about one third higher than in countries with low corruption.

On an individual level, the problems start when you’re stuck outside of family alliances.

“In Italy you really need to know someone to get a job,’ said Italian real estate business-owner Gabriel Fabrizio Sbalbi. “This is especially true for young graduates without contacts. And it means that young, highly-educated people [around 60,000 a year – seven out of ten with degrees] are leaving the country to get jobs elsewhere.”

Sbalbi believes that widespread unemployment is definitely a leading driver in this exodus - youth unemployment reached a record 44.2% in June 2015. But the system of widespread patronage is also at play.

A 2013 survey from Italy’s Ministry of Labour revealed 61% of firms rely on personal introductions for recruitment – and Sbalbi said that in the public sector some jobs are virtually hereditary. Take the country’s notorious ‘relative-gate’ case – when it was revealed that at the University of Palermo more than half the academic population had at least one relative working at the institution.

You’re missing out on the people who can bring in new ideas and technological skills.

While employing friends and family with the right skills is one thing, if their main qualification is their surname then it effectively blocks better-skilled people from entering the employment market, explains Jane Sunley, founder of London-based people engagement company Purple Cubed.  

“This can be devastating for a company culture because you’re missing out on the people who can bring in new ideas and technological skills. Also, in a global market you’re relating to a diverse range of people – that’s going to be difficult if all your staff come from the same background.”

Can’t stand the culture of nepotism where you live? You could join the exodus of people who choose to look for work in a country where contacts aren’t as important. That’s what Sbalbi did during the 2008 recession, leaving Italy to start a new real-estate company in Mexico.

"No-one knew me or the company – but they still came to us with orders because they saw the quality of what we could do,’ he said.  “For that to happen [in Italy] we’d have to change the whole culture.”

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