Abstract

In lower-income countries, owner-managers of small businesses take on heavy social responsibilities toward members of their extended family. However, using business resources to answer family needs can harm business, hence contradict broader responsibilities toward business stakeholders and society at large. In contexts where jobs are scarce and unemployment means deep poverty, this conundrum often translates into an ethical choice between recruiting needy relatives or avoid nepotism. To study such ethically loaded recruitment decisions, I adopt a stakeholder salience perspective. Focusing on Rwanda, a small East African country, I use interview data to examine how owner-managers articulate their social responsibilities toward family and toward other stakeholders, and how this influences recruitment. I observe that owner-managers either nest, balance, or separate social responsibilities toward family and nonfamily stakeholders and preferentially recruit relatives or strangers accordingly. This study suggests that stakeholder salience depends on a process of stakeholder categorization, which is influenced by the cultural and political context.