Tuesday, June 5, 2007

Hiring Relatives and the Chinese Business Model

Even though I'm a Norwegian-Irish American, there isn't much about ethnicity in this post. There is, however, a bit about the up- and down-sides of working with close kin.

Westerners think of nepotism as a vice, east Asians purportedly regard hiring relatives as a virtue. There's this academic look at the topic, and many more, online: I've no idea how valid any of them are.

Living on the edge of "Chinatown" in San Francisco, and working in an ESL program, gave me an outsider's look at how folks in that part of the city ran their businesses. I was impressed at how efficiently and effectively my neighbors kept expenses down and productivity up by keeping jobs in the family.

Of course, that sort of system requires kids who give a rip about their parents, parents who are willing to sacrifice their own immediate impulses to what's good for the next generation, and a work ethic that hasn't been stylish in the more refined and cultured circles in the USA for decades. That last point might be changing.

My own enterprise has relied a great deal on the expertise in CSS that my oldest daughter developed, together with her artistic abilities. She and I have very similar personalities: neither one of which are particularly notable for diplomacy. That makes our cooperative venture exciting, as well as productive.

We make it work, thanks in large part to this family's tight bonds and our mutual willingness to to trade labor for benefits like reciprocal links and room and board.

The working relationship my oldest daughter and I have illustrates the advantages and one of the problems of working with family.

The advantages:

* Dealing with people you know: Communication is easier, and you have a clear idea of your colleague's skills and training

* Low- or no-cost labor: Many families can trade labor for food and housing, and the prospect of advancement in the enterprise

* High productivity and loyalty: Members of a close-knit family are highly motivated to make their business successful, for their own profit and the good of the family

The disadvantages:

* Dealing with people you know: Communication is complicated by years of close association, during which time both parties have had ample time to acquire peeves and grudges and mutually irritating habits

* Unsatisfactory compensation: Relatives may expect more money than you can offer, and take offense when you don't live up to their expectations

* Low productivity and loyalty: Family members don't necessarily have the best interests of your enterprise in mind, and may believe that they can loaf because you'd never fire a relative

Most how-to-run-your-business books say that hiring relatives is risky at best, and I'd say they're right. It's working in my case: but this is an unusual family.

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