Well I see it in schools, universities, hospitals, government offices, public companies and so on. Small businesses have full discretion on how to do things so they don't need it.
Also I don't see it is the only reason but one of the core reason.
Your claims just don’t align with my experiences, anecdotes, or information.
My mayor hired his niece to run a department. My cousin hired my nephews at a school district. I worked at a hospital where the IT director and the network admin were married. My dad worked at a family owned car dealership that’s in the third generation of ownership. I don’t think any of those cases were corrupt.
Meanwhile “the bureaucracy” in the form of OIG has an excellent track record of eliminating waste. The mayor of my hometown has personally visited each department to ensure they are operating responsibly and uncovered and eliminated widespread waste.