The Neglected Threat(Cronyism)
Cronyism is the act of hiring someone because they are somehow close to you, In many cases without considering whether the friend/acquaintance is qualified enough to do the job. Small business owners have to depend on each member of their staff to perform to their best to attain maximum production, Using cronyism as a hiring approach would create certain barriers to the entrepreneur where he/she cannot order or force their friends to work in some cases, the close ones might take advantage of the lenient entrepreneur, these might cause drastic negative effects on the company.
Cronyism is deadly for a small business because friends of the business owner, or a manager within the business, may feel that they should be treated differently than other employees, even if they don’t, the entrepreneur may treat them especially because of close association with the person. The feeling of entitlement that cronyism can create and cause insubordination and disrespect for management and other employees that creates a drop in workplace morale.
lets take a typical example: Imagine you are more qualified and more efficient than your co-worker, and you are getting scolded for minor delay in submitting your work whereas your co-worker despite being late and regularly submitting his/her project with some major delay is being treated in a friendly manner, there is high chance that your motivation levels will be coming down which indeed will affect your performance
As discussed with Satish Vaddiraju an MSME entrepreneur we also received positive side of cronyism.
There are many more negative effects of cronyism in MSME units, but at the same time the positives of cronyism cannot be neglected in MSME Units , the likely hood of getting cheated by a friend is far less when compared to others, if the friend works hard enough then he/she would be a motivation to other workers, in the absence of entrepreneur its hard to find a trustworthy temporary replacement.
we recommend to consider all the negative effects of cronyism before handing over the responsibility to a friend/acquaintance and make sure that you can avoid these effects by having some agreements and commitments, in the end, the survival of your company is more important and take decisions based on it.