Khaleej Times

Nepotism versus wasta in business globalisat­ion

- The writer — the founder of Wealth Dynamics Unlimited — a personal branding expert, business startup strategist and entreprene­urial educator. Views expressed are her own and do not reflect the newspaper’s policy. OKSANA TASHAKOVA

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

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