Ali Gholi Rowshan - Assistant Professor, Department of Management, University of Sistan & Baluchestan, Zahedan, Iran
Meisam Ghasemnezhad - MSc in Entrepreneurship, University of Sistan & Baluchestan, Zahedan, Iran
Zahra Hemmat - MSc in Entrepreneurship, University of Sistan & Baluchestan, Zahedan, Iran

Due to dominant culture in the countries in transition, one of the issues to beinvestigated in these countries is the phenomenon of nepotism in theorganizations which, as an environmental factor, could affect the employees’performance. This study attempts to examine the functions of nepotism inIranian public sector organizations and evaluate its impact on employees'performance. Research methodology of this study is descriptive- survey. Thus,after an overview on theoretical bases and for the aim of collecting the requireddata, 150 questionnaires were distributed among administrative employees ofZahedan Municipality. Our findings showed that nepotism is a challengingissue that affects the performance of employees in the administrative systemsof Iranian public sector. It was also found that nepotism, as an environmentalfactor, has made the performance of organization to be consistent with it,through overcoming intra-organizational factors.

Nepotism, Countries in transition, Public sector organizations, Employees’ performance, environmental factor