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Article
Publication date: 30 July 2019

Ron Berger, Ram Herstein, Daniel McCarthy and Sheila Puffer

The purpose of this paper is to analyze the role of Wasta, a culturally based system of social networks of exchange among in-group members in the Arab world, as…

Abstract

Purpose

The purpose of this paper is to analyze the role of Wasta, a culturally based system of social networks of exchange among in-group members in the Arab world, as exemplified by three groups of Arabs in the Palestinian Authority, and then compares it to Guanxi (China), Sviazi (Russia) and JaanPechaan (India). The use of social networks is a common business model around the world to accomplish business objectives and is especially relied upon in emerging economies where formal institutions are weak. It is important to understand the commonalities and differences in the use of reciprocity in various cultural contexts in order to conduct business effectively. The aim of the paper is to illustrate the structure of Wasta and how it is perceived and constructed among three Arab social groups, and then compare and contrast it with social business models in three other high context cultures.

Design/methodology/approach

Qualitative approach based on interviews to better understand the relationships involved.

Findings

The findings provide the foundation for a number of critical insights for non-Arab managers seeking to do business in the Arab world. For international managers to conduct business successfully, it is essential to understand how Wasta works, and establish relationships with members of influential social networks by building trust over time such that they create Wasta for themselves and indirectly for their firms. Using Wasta in the Arab world, as noted above, is similar to doing business successfully in other emerging economies such as using Sviazi in Russia (McCarthy and Puffer, 2008; Berger et al., 2017), Guanxi in China (Yen et al., 2011) and JaanPechaan in India (Bhattacharjee and Zhang, 2011). The authors feel more confident in stating this view after comparing Wasta with these other three concepts, and noting that all four are built upon the same fundamental constructs.

Research limitations/implications

The authors recognize that the study is limited in terms of the geographical sample since it does not include any non-Palestinians, although the managers the authors sampled came from various regions in the Palestinian authority. Additionally, Palestinian managers are highly educated and mobile, and can be found in many other Arab countries working in managerial positions (Zineldin, 2002), thus potentially broadening the generalizability of the findings. Nonetheless, the samples would be called ones of convenience rather than randomly drawn from the three groups, since the latter would be extremely difficult to execute not only in the Palestinian Authority but in most of the Arab world due to the culturally based reluctance to provide sensitive information to those outside one’s network. Despite the difficulties that might be involved in exploring such culturally sensitive issues as the authors did in this study, the benefits in knowledge gained can be of significant importance to the study of international business in emerging and transition economies.

Originality/value

Little research has focused on the use of Wasta in the Arab world, a gap which this paper addresses. The authors do so by analyzing the views of Wasta held by three important groups – leaders, business people and students. While each type of reciprocity has its own unique characteristics, the authors focus on three interrelated constructs that have been found to underlie the use of reciprocity in various cultures. In the Arab world, these are Hamola, which incorporates reciprocity; Somah, that incorporates trust; and Mojamala, which incorporates empathy through social business networks.

Details

International Journal of Emerging Markets, vol. 14 no. 5
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 21 June 2020

Ziaul Haque Munim, Rotem Shneor, Olugbenga Michael Adewumi and Mohammad Hassan Shakil

SME funding gaps in developing economies are substantial. Crowdfunding is an innovative way to raise funds that may be part of the solution for closing such gaps. The…

Abstract

Purpose

SME funding gaps in developing economies are substantial. Crowdfunding is an innovative way to raise funds that may be part of the solution for closing such gaps. The purpose of this study is to investigate the determinants of crowdfunding contribution intentions in the context of a developing country –Bangladesh.

Design/methodology/approach

The authors collect data by using a structured questionnaire distributed through Facebook. The analysis is based on data collected from 252 valid responses and uses the ordered probit regression for estimation. For robustness, the authors also estimate the hypothesized model using ordered logistic regression and OLS regression finding identical results.

Findings

The authors find that liking the campaign idea and positive media coverage of a crowdfunding campaign have a positive association with crowdfunding contribution intention. Surprisingly, personal relations, others' recommendation and the location of the campaign's owner were not significantly associated with crowdfunding contribution intention in our study. Moreover, respondents' location in Bangladesh (vs. abroad) and their age are positively associated with contribution intention, while education is negatively associated with intention.

Originality/value

Earlier studies focused on the determinants of ex post crowdfunding intentions in developed and more mature crowdfunding markets. The authors contribute by examining ex ante crowdfunding contribution intentions in the developing economy of Bangladesh, which is at the market's inception stage.

Details

International Journal of Emerging Markets, vol. 16 no. 6
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 27 April 2020

Ron Berger, Bradley R. Barnes and Avi Silbiger

Managers of multinational enterprises (MNEs) from developed economies are often cautious to understand the cultural environment where they do business. This is…

Abstract

Purpose

Managers of multinational enterprises (MNEs) from developed economies are often cautious to understand the cultural environment where they do business. This is predominantly true in developing economies, and even more so in certain Arab countries where MNEs have limited knowledge and experience. The purpose of this study is to report on the development of a research instrument that is applicable to Arab business culture, following the 2011 Arab Spring. The investigation draws on data from three different groups of people, i.e. leaders (business professors and leading politicians), business people and postgraduate business students, all of Palestinian nationality. The article examines the Arabic culturally based business structure called Wasta, a system that relies on social networks and the reciprocal exchange of favors. A research instrument is developed to measure three dimensions of Wasta across these three different groups of people and examines their influence on relationship satisfaction and organizational performance. The findings reveal that the groups are affected differently by these dimensions and see different utility in Wasta. Such insights may be useful for MNE practitioners when entering Arab countries, when seeking to employ younger Arabs and when partnering with Arab businesses or dealing with government officials.

Design/methodology/approach

Research paper

Findings

This study has focused on the impact of Wasta on relationship satisfaction and on relationship performance for three different groups of individuals: business people, students and leaders. It was hypothesized that higher levels of each component of Wasta would contribute positively to relationship satisfaction, and that the latter would in turn lead to higher relationship performance. Findings generally supported these hypotheses with some variations among groups. Furthermore, it was predicted that the model would be relevant to all three groups, but would be structured differently reflecting their different views of business. The findings of this study help answer our research question about the socio-economic, cultural and political factors that influence the business process involving Arab and non-Arab business managers.

Originality/value

Original paper

Details

Journal of Business & Industrial Marketing, vol. 36 no. 12
Type: Research Article
ISSN: 0885-8624

Keywords

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