Nepotism versus wasta in business globalisation
Cultural intelligence is vastly important in terms of doing business in the Middle East. Nothing exemplifies this more than how Westerners view nepotism and Arabs view wasta.
Nepotism, the practice of giving positions of power to kin, is seen as a corrupt practice in the United States, whether or not that family member is qualified. Wasta, on the other hand, is deeply embedded in Arab culture and can be positive and useful.
Wasta refers to the advantage and benefits one gains from being part of a particular group or having connections. As Charles Adwan of the World Bank explains, wasta can be used to gain jobs or licences, cut through red tape and otherwise circumvent obstacles based on who you know.
Wasta originated in Middle Eastern culture based on evolution and survival. It was the way conflict was resolved, the way cooperation and loyalty were gained in order for different tribes of people to come together in more unified nation-states.
John Hooker of Carnegie Mellon University points out that what is viewed as corruption in one culture may actually be useful in another. This is important for multinational companies to consider and anyone doing business with someone from a different country.
Western countries have rulebased cultures while most other countries are relationship-based. A rule-based culture is characterised by transparency and laws. As Hooker points out: “Westerners tend to trust the system, while people elsewhere trust their friends and family. Westerners organise their business around discrete deals that are drawn up as contracts or agreements and enforced by a legal system. Other cultures may organise their business around human relationships that are cemented by personal honor, filial duty, friendship, or longterm mutual behaviour.”
What may seem like corruption to a Westerner is seen as morally correct in other cultures.
This distinction is especially important because rule-based cultures view these rules as universal. Relationship-based cultures rely on individuals to work. In an increasingly complex and globalised economy, relationships and trust are vital.
Another important difference between what is viewed as corrupt in the West and what is acceptable in relationship-based cultures is the fact that corrupt practices may forward the interests of an individual(s) over what is best for the company or the whole. Wasta, on the other hand, is meant to forward the interests of the individual and contribute to the betterment of the whole. In addition, belonging to a group and having wasta means that you are entitled to these advantages: you don’t necessarily owe someone for these favours. This practice creates a kind of belonging and loyalty that isn’t seen in many Western businesses.
Litigation in the West is so prevalent because these countries are rule-based rather than relationshipbased. When individuals aren’t as accountable, cheating is common. Authority belongs to a structure rather than to persons. Individualism in the West means that people feel less personally invested or tied to others.
Kate Hutchings and David Weir have also studied the practice of wasta, as seen in The Journal of European Industrial Training. In studying 25 years of literature concerning wasta, these investigators believe that it remains very influential and traditional in business practice.
Wasta can be viewed as a kind of networking in which relationships matter more than structures like Western business practices. Relationships come first in the Arab world and then business negotiations can occur. This is opposite what happens in the West.
Hutchings and Weir explain that the Arab business world is characterised by Islamic practices and that all business and social life are affected by these practices. This creates networks that involve kinship ties. Wasta is the glue that holds this society together yet it is not openly discussed, so is an important component of cultural intelligence training. In terms of business transactions in the Middle East, emotional trust is more important than cognitive trust; relationships mean more than legal contracts.
There are similarities between wasta and Western practices that often goes unrecognised. Gift-giving for instance, differs from favours and is a sign of respect or affirmation in both Eastern and Western cultures. Networking, too, is a common practice in the West although it is borne out in a different manner and is based more on cost and advantages than wasta is.
Some researchers believe that wasta will wane as modernisation increasingly affects the Arab world but Hooker, Hutchings and Weir believe this is too simplistic a view. First of all, the threat of change or economic risk can cause “tribal” bonds to intensify. Secondly, globalisation and modernisation aren’t one-way streets: cultures affect each other by coming into contact with one another. While Westerners often view law and rules as universal, relationships are the real name of the game in creating a global society.
Wasta is about social cohesion and emotional bonds, values that every society benefits from. There are certainly good and bad forms of wasta. Hooker points out that the influence of Westernisation has contributed to some of these negative forms. For instance, corrupt bribes or side payments in the Middle East have evolved because of the breakdown of social bonds between interactors, because of the Western influence on the objective instead of subjective. It is influence that is important in the Middle East, and not just procedures, and the way wasta evolves, along with intercultural business, will depend on how open cultures are to learning from each other.
Wasta... creates a kind of belonging and loyalty that isn’t seen in many Western businesses