Nick Hood, senior London partner at business recovery and turnaround specialist Begbies Traynor highlights the danger for businesses in unfairly favouring existing employees at the expense of later arrivals.

A study by the Norwegian School of Economics and Business Administration shows how the first born invariably becomes a higher achiever in families with more than one child. Conducted over a 10-year period, the study found that both academically and in their careers, the eldest child was the most successful, regardless of their sex.

The eldest child does better because he has more of his parents’ attention, and because he can dominate his younger brothers and sisters.

Authority
It looks like there could be some useful comparisons with how companies act, especially larger companies that have grown to the size where there are massed ranks of middle managers. It is these managers who have become part of the furniture, and are suitably well established and secure in their own authority. This authority, if unchecked, can over dominate more junior rivals, and they can use their greater access to directors as a means of preventing new joiners from having a fair opportunity to offer fresh ideas or suggestions.

Like the first born, the manager in place will have the authority to implement the decisions of directors. Unless they have already fallen down badly on the job, they will have a large degree of so called "founders’ rights" - enjoying privileges which new employees might consider unfair, especially if they have come in on a similar level in the company’s hierarchy. And the seeds of discontent are sown.

Turf wars
In organisations that have successfully introduced flexible cultures that are able to react easily and enthusiastically to new circumstances, middle managers should be readily able to accept that new staff usually bring with them new ways of doing things. They won’t feel threatened by change, and will welcome the positive impact that a fresh approach can contribute to the organisation.

However, from years of experience it is often the longer serving employees who form the crusty “old guard” which can be positively hostile to newcomers. In this situation, great tensions emerge in organisations when the introduction of new staff causes conflict with established colleagues. Inevitably, this has a highly detrimental impact on the organisation’s performance.

Bosses need to be alert to these changes in structure. They should be wary about allowing a culture to foster where new recruits feel there is an old guard, which they must treat with kid gloves.

If ineffective management allows these "turf wars" to develop they will be acknowledging the erection of barriers between the old guard with all their assumed privileges. This will lead to an unhealthy working environment and a breakdown of communication between employees.

Signs of trouble
So how does management spot this happening? Tell-tale signs of trouble brewing will be normally happy and vocal staff who clam up at staff meetings. They will be less enthusiastic about proposing ideas. They will quietly accept management suggestions but make none of their own. By now alarm bells should be ringing. Unless management acts quickly and works hard at getting the increasingly-disgruntled staff to express their hidden resentment it will lead ultimately to a long and protracted death of the business, especially as once productive workers become increasingly reluctant to stay late at work or go the extra mile.

The other consequence of overtly favouring original employees is that even fairly new staff will not bother to put forward fresh ideas or useful suggestions for the firm’s development. Instead, they will take the path of least resistance, remaining quiet in the hope of not offending anyone.

The consequences are clear – the company will become increasingly bureaucratic stunting innovation and initiative, which will ultimately be reflected in a weakened position in the market place.