Paternalistic decisionmaking

However, this is theory only. For numerous reasons this specific business culture is severely criticized by market analysts, shareholders and psychologists who point to its economic and moral deficiencies. In general, paternalistic decision-making is highly ineffective and there are only very few exceptions that only confirm the rule.
The most frequently mentioned accusations are connected with inefficiency, inequality, favorism and prejudice. Paternalistic decision-making is often considered to be weak-mannered and irrational style of management. It puts the boss in total command so that the communication among peers on any level becomes redundant. In a sense, interaction between members of staff on a professional basis is not only unnecessary but even impolite. This does not mean that the CEOs will not invite employees for accidental deliberations about the future decisions of their company. The manipulative aspect of paternalism is inherent in what employees may experience as being allowed entrance into dialogues that, in truth, serve nothing else but moderating the opinions of subordinates. An illusion of collective decision-making is, as a result, created. It also implies that paternalistic mode of decision-making does not have to be included officially in a given company’s management tactics. Some analysts would go as far as to suggest that paternalism prevails in cultures that have "a history of dictatorship" (Pellegrini, Scandura 2007). The policy is seen to promote a model of unconditional dependence on the authority of the leader and reinforce the value of teamwork among employees who have, allegedly but not truly, equal chances for promotion.
Since the operations of paternalism are tricky even for managers themselves the economical effects are slightly ambivalent as a result. On the one hand, family-like company has a huge array of techniques at its disposal to lure potential employees. But on the other hand, it also means that candidates may be interested in some posts just because they are prompted by control-free tasks and would very much like to adhere to the zero requirements for professional and personal development. Also with already hired staff, this kind of managing can prove to be demoralizing and, paradoxically, lead to loss of trust for the sake of which it was originally erected. With time even ambitious employees lose the aspiration and finally also the ability to excel. Personal growth is given little or no consideration. skills of the employees are neither improved nor periodically revised therefore the dynamism of the company inevitably heads toward stagnation. Paternalistic companies often face the problem of not being competitive on the market.
But beside external challenges paternalistic company may not be able to meet there is also the danger of internal frictions between staff members. Paternalistic approach implicates the CEOs in awkward situations where their decisions may be questioned from ethical point of view. According to Winning (2006) discrimination is inscribed in paternalism. Indeed, rewarding employees for their contributions to the firm’s success works on severely biased grounds. Among such practices seniority-based salary increases and promotions are the most remarkable. Lack of appreciation