Which of the following events is most likely to lead to business failure?

Hiring family members to control personnel costs can lead to several potential issues that increase the risk of business failure. This practice often creates an environment where hiring decisions are based on personal relationships rather than merit and qualifications. Consequently, this can result in a workforce that lacks the necessary skills and experience to effectively perform their roles.

Moreover, employing family members can lead to conflicts of interest, favoritism, and a decline in overall team morale among non-family employees. If the family members do not contribute positively to the team's performance or if they do not possess the competencies required for their positions, productivity can suffer. A workforce that is not well-aligned with the company’s goals can lead to inefficiencies and negatively impact profitability.

This approach can also create governance challenges, as it may blur the lines between professional boundaries and personal relationships, complicating decision-making processes. Over time, these dynamics may harm the organizational culture and the company's reputation, ultimately increasing the risk of business failure. Thus, this choice represents a strategic error with significant consequences that could jeopardize the survival of the business.