Business is a part of life that is sometimes thought of as existing outside of the normal ethics. The phrase "just business" is often used to explain away and excuse unusually cut-throat or aggressive behaviour. While it is true that the pressures of competition sometimes lead individuals in business to commit behaviour that is questionable, the rules of ethics are a powerful countervailing force. As companies seek both more reliable and more sustainable business models.
In any business there are expectations that must be met both within a company and between a company and its consumers. The ethical issue of trust is essential in this equation. By establishing codes of conduct businesses ensure that their employees trust that they will be rewarded for the quality of work they produce and not for the amount of dishonesty they traffic in. Likewise, businesses rely on the trust consumers have in their product.
Nepotism is a problem at all levels of business; from small to large. The rewards that a company gives its employee are supposed to be based on what that employee has given the company in value. Nepotism involves the hiring and rewarding of employees based solely on their being related to or in some way knowing their bosses. Nepotism lowers the morale in a company and it weakens the incentives employees have to work hard.
In any field of business it is important to know who is responsible for what. It is important that it always be clear ahead of time who will be held accountable when things go wrong. When a company does not have a clear sense of accountability it leads to unnecessary risks and sloppy methods. With accountability employees have incentive to avoid mistakes.