Nepotism and Legacy Preference in Portuguese Family Businesses

What Prevails: Merit or Relationships?

Abstract

Portugal is a country characterised by a strong culture of relationships, due to the central role that family plays in the identity of Portuguese culture. In the business context, as well as in government institutions, there is often evidence that the selection of certain people for a particular position is often related to personal networks. This article is dedicated to investigating the phenomena of nepotism and preference for legacy in family businesses, which account for around 70 per cent of companies in Portugal. The fine line between merit and favouritism is analysed and the influence that the scarcity of human resources has on changing the paradigm of practices that once dominated the Portuguese business landscape is highlighted. The results of the article are based on scientific research, as well as in-depth personal interviews with two employees of family businesses and a survey on the subject (31 respondents). An interesting finding in this study - 71 percent of respondents believe that it is more accessible to enter a Portuguese family business through social contacts than through merit.