Nepotism, Favoritism aNd CroNyism: a study oF their eFFeCts oN job stress aNd job satisFaCtioN iN the baNkiNg iNdustry oF North Cyprus Huseyin ArAsli And MustAfA tuMer Eastern Mediterranean University, Gazimagusa, North Cyprus Nepotism, cronyism and favoritism are unprofessional practices giving preferential treatment to relatives and friends in employment. For this study a survey was carried out with 576 respondents working in the banking industry in northern Cyprus. An analysis was then conducted to assess the impact of these practices on job stress, job satisfaction, and intention to quit behavior of employees, as well as word of mouth comments in their workplaces. Results of this study show that nepotism, favoritism and cronyism create job stress in the workplace and this increases dissatisfaction of the staff about their organizations. Nepotism has the greatest negative effect on job stress. Keywords: nepotism, favoritism, cronyism, banking industry, Cyprus.
The service industry is one of the most important income-generating sectors in small states. In the last few decades, some small states have been important service centers in banking, finance and trade services. Among these, Singapore and Hong Kong are examples. In the Mediterranean Sea, two examples are Cyprus and Malta. Bermuda, Bahrain and Jersey are other states that have been studied by Bowe, Briguglio, and Dean (1998). The complex nature of services (Angur, Nataraajan, & Jahera, 1999; Arasli, 2002) results from their common characteristics, which are intangibility, perishability, high customer involvement, simultaneous production and consumption and Huseyin Arasli, PhD, Associate Professor of Management and Organizational Studies, School of Tourism and Hospitality Management, Eastern Mediterranean University, Gazimagusa, North Cyprus; Mustafa Tumer, PhD, Assistant Professor of Marketing, Faculty of Business and Economics, Eastern Mediterranean University, Gazimagusa, North Cyprus. Appreciation is due to anonymous reviewers. Please address correspondence and reprint requests to: Huseyin Arasli, PhD, Associate Professor of Management and Organizational Studies, Eastern Mediterranean University, School of Tourism & Hospitality Management, Gazimagusa, North Cyprus. Phone: +90 392 630 2019; Fax: +90 392 365 1584; Email: email@example.com
NEPOTISM, FAVORITISM, CRONYISM
homogeneity. These characteristics, coupled with the growing prominence of the services sector, have also increased the need for fair and professional management as companies look for ways to improve financial performance and attract customers in today’s competitive environment. Especially in the service industry, customer satisfaction is predominantly dependent on employee behavior and attitudes. Establishing professionalism and institutionalization are quite difficult in these workplaces in small states since employees tend either to be related or to know each other personally. Thus, services provided in this labor-intensive environment are more open to corruption than are those in larger states. For example, nepotism is likely to occur more frequently in such microgeographies where several external factors like sociocultural, economic, educational, and political structures force people to support their close relatives or friends. This could make more complex a phenomenon that is one of the biggest obstacles associated with hiring, placement, rewarding, development and retention of staff in these institutions. In this study an examination was carried out of the impact of nepotism, cronyism and favoritism on the banking industry in northern Cyprus. All three practices are major concerns in both the services industry and the banking industry in that area of Cyprus. An examination was made of a number of factors including job stress, word of mouth, job satisfaction,...