Nepotism effect in the institutionalization of family owned businesses

Family businesses constitute a large share of the economy in Turkey and in the world. Undoubtedly, the foundations of the industrial enterprises in our country are also the family businesses. For this reason, studies have been conducted in order to ensure the continuity of family businesses and all these studies show the guideline to family companies. There are structural differences that distinguish family businesses from other businesses. What is important is to prevent these differences from becoming disadvantages at some point and to turn them into advantages. Family and business concepts, which are two completely different structures in family businesses, need to be brought together in a regular and just manner. In order to bring them together in a justifiable way, nepotism style practice should not be included. Institutionalization is needed in order to bring them together regularly. Order and justice are interrelated concepts. It will be difficult to talk straight into an enterprise where there is no justice. For this reason, enterprises need to be institutionalized in order to be successful. To be institutionalized, nepotism-style practices must be abandoned. Neither institutionalization nor nepotism-style practices are unfortunately the end of family businesses. The main aim of the study is to explain that nepotism-style practices in family businesses constitute a major obstacle to institutionalization. Nepotism can be more inclined in family businesses with interdependent family structures, especially Turkish family structure. The aim of the work is to show the damage of nepotism and show that it is one of the biggest obstacles in front of institutionalization