Nepotism describes a variety of practices related to favoritism; it can mean simply hiring one's own family members, or it can mean hiring and advancing unqualified or under qualified family members based simply on the familial relationship. The word nepotism stems from the Latin word for nephew, especially the "nephews" of the prelates in medieval times. While attitudes toward nepotism vary according to cultural background, nepotism is a sensitive issue in American business. Many companies and individuals consider the practice to be unethical, largely due to its conflict with traditional American values of self-reliance and fairness.

In Western societies nepotism raises legal concerns. Although U.S. laws do not specifically prohibit hiring one's relatives, studies show that between 10 and 40 percent of U.S. companies maintain formal policies prohibiting such a practice. Many of these anti-nepotism rules were instituted in the 1950s with the aim of preventing the hiring...