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RM Reports

Nepotism & its Effects on Real Estate

Nepotism
‘Nepotism’ – a word that is usually considered negative refers to favoritism in work that is based on kinship. Family owned businesses often practice nepotism naturally without undertaking any interviews and considering more appropriate candidates. These appointed blood relatives might not possess any qualities required for the position. According to Adam, vice president/executive editor at Collins Books – “Nepotism is found in one form or another in all human societies. Many of the examples of the self made man were indeed the beneficiaries of nepotism”.

MythBuster Anushree

And like any other sector, real estate also witnesses this problem.

Eric Trump, son of the President of the United States, Donald Trump, in a recent interview to Forbes spoke openly about Nepotism. Eric acknowledged that ‘Nepotism is a factor of life’. After Donald Trump became the President of the United States, Eric and Don, two of the Trump’s beloved sons have taken over the real estate business of their father. However, he also admitted that possibly he reached this position in his life so soon, because of nepotism, but maintaining the position requires one’s own skills. Also, President’s Trumps daughter and son in law are the recipients of the real estate business worth $740 million.

While it was completely okay for the Donald’s to vouch for Nepotism, Anthony Malkin, an American real estate investor and Chairman Emeritus of Empire State Realty Trust stated in an interview to ‘Bisnow’ –

“If one of our children had an absolute calling for real estate and developed the chops and demonstrated desire to be in the real estate business, I suppose they could try to compete for a job here like anybody else who’s qualified. In my view candidly, I hope they don’t feel the need, the drive or the obligation to come to work in this business. It is not a family business and there is no nepotism in this company.”

Similarly, Carlotta Landschoot, daughter of a real estate tycoon in Florida, did not end up joining the firm until she proved her mettle in an accounting company. And she made Watson realty win the organization’s highest award four times. The achievement itself speaks a lot.

Many fathers/mothers are biased towards their own blood, but there are cases where one’s potential is given the utmost importance and enjoying the highest position in the organization should not be a birth right but rather a position well deserved. In fact, nepotism also enhances the ability of a person for snobbery that affects the performance of the team working under him/her. The person doesn’t understand the nuances of his work and end up bossing around.  The kin of the rich and the powerful inherit family names, capital and social privileges, so the ones who are not given these, must be given opportunities at least.

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