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Interpersonal and informal ties and networks, known as wasta in the Arab Middle East region, remain a major force in Middle Eastern societies, determining most economic, social and political outcomes. Yet the literature on informal ties and networks is largely characterized by a lack of contributions from the Arab world, despite the adverse effect that lack of understanding of the wasta phenomenon is having on the effectiveness of expatriate managers and subsequently on business performance. This chapter therefore aims to shed light on the meaning, characteristics, structure, and role of wasta in establishing and maintaining successful business relationships. It ends with recommendations for foreign investors and international managers who wish to establish and maintain successful business relationships in the Middle East on how to capitalize on interpersonal networks within this process.

Research on informal social networks is gaining momentum. However, there is still much we do not know about these networks and how they impact business practices in the countries in which they operate. This chapter presents the authors' perspectives on the current state of wasta (as a case study of informal social networks) research and the future directions that need to be explored in relation to wasta to further unpack this practice and to capture its complexity in a way that allows both researchers and practitioners to manage it. It is observed that wasta research is currently too reliant on short timeframe case studies which are mostly qualitative. While these have improved in their theoretical, practical and methodological rigor, it is suggested that there is a need for more mixed methods longitudinal and statistical modeling research. We conclude this chapter by suggesting ways in which wasta researchers can “borrow” from other disciplines to enhance our understanding of this practice.

The rise of emerging markets such as China, Brazil, Russia, and the Middle East has led to an increase in interest in understanding the nature and working mechanisms of informal networks (guanxi, yongo, wasta, blat/svyazi, etc.), which are instrumental in international business (IB) activities in these markets. Unlike Chinese informal networks, which have been researched extensively, studies on several other important informal networks remain sporadic and peripheral. From a theoretical point of view, it can be argued that the typical characteristics and behavioral ideals implied by social network theory do not fully reflect the networking ideals and practices in many non-Western countries. At the same time, international business practitioners may not have a thorough understanding of how to engage effectively in informal networking abroad or of how local managers actually network. Motivated by the wish to close this knowledge gap and work toward an inclusive and integrative theory of informal networks in international business studies, this paper suggests treating informal networks as an important type of social capital and informal institution of the respective business environment at the same time. As such, researching informal networks can be regarded a distinct research area positioned at the intersection of social capital, social network and (informal) institution theory. Finally, emerging theories are presented that indicate a path for developing informal network theory further in international business studies.

I remember talking with Hugh Stephenson some time in the early 1980s after he returned from a trip to the Middle East. Hugh was in charge of Career Development for NCR and had been assessing the leadership and management skills of NCR leaders in the Middle East. I recall his amusement and his frustration as he remarked on how difficult it was from his Western perspective to interpret leadership motivation and drive when the answers to so many of his questions was tempered by, “If Allah wills.” This led us into a long discussion about assessing across cultures, including the challenge of seeing and interpreting things from a different cultural perspective, and the relevance of the NCR corporate model to leadership effectiveness in the Middle East. It would be another 18 years, however, before I was to gain first hand experience assessing and developing leaders in the Middle East.

While guanxi is by far the most prominent network construct in international business research, the literature on other informal network constructs (wasta, sifarish, svyazi, yongo, etc.) is emerging. Though guanxi research suggests that the influence of informal networks in business may recede with increasing levels of economic growth and institutional effectiveness, this hypothesis remains to be tested in different contexts using varied network constructs in order to come to general conclusions. Assuming that informal networks are culturally rather than institutionally driven, we elaborate on the developmental dynamics of informal networks in Korea, namely yongo and inmaek, arguing that yongo persists and adjusts to changes in the sociocultural environment. While we define traditional yongo based on three in-group ties (family, university, and regional ties), today we see workplace-related ties and networks becoming an increasingly important yongo base, which we call yongo 2.0. Societal trends reflected in the so-called spoon-class theory and N-po generation debate mirror the ambivalence of traditional yongo and the reliance on yongo 2.0. Hence, we assume that yongo will not recede but remain an important in-group tie that foreign business expatriates need to understand and learn to access in order to manage business effectively and integrate into society.

Informal networking is generally regarded as an important activity that is available to every manager, which usually results in positive outcomes. However, differences in networking behavior have been less frequently discussed and compared in a global context. We argue that different ideals of informal networking can result in situations where international managers can hardly foresee the potential consequences of their networking behavior, especially when local ideals of networking are not taken into account. Differences in networking behavior caused by differences in underlying values, norms, and ideals can lead to ethical dilemmas. At this junction, we point out the integral role favors and favor exchange play in global networking and suggest a competency framework that is helpful for international managers to navigate informal networking abroad and identify potential ethical dilemmas before they take effect.

Literature has long been discussing indigenous forms of informal practices whose cultural origins are concealed. We first seek to provide a contextualization of the importance of an informal practice that is salient within the Brazilian culture – the Brazilian jeitinho. We then provide a historical background of the jeitinho, as well as an attempt to come up with a definition of the construct, which is by no means a definitive one. We explore how the jeitinho plays a role in the Brazilian organizational scenario, which may be useful for international companies aiming to do business in the country. Finally, we present a set of recommendations as how to deal with jeitinho in organizational-related occasions, drawing on the Brazilian historian Sérgio Buarque de Holanda's “cordial man” concept, which suggests that the roots of Brazilian culture lie in the patriarchal environment of the colonial period. We do not have in this chapter the intention of characterizing the multiplicity of Brazilian business practices, what would be an impossible task to accomplish in light of the enormous diversity of social contexts in Brazil. What we present in the chapter are some concepts and tools for working with and, fundamentally, understanding the organizational and social process the Brazilian context, which we hope may be useful for those interested in doing business in or with Brazil.

The purpose of this chapter is to highlight the cultural values which underpin the practice and acceptance of nepotism and cronyism in societies and organizations worldwide. We argue that there are advantages inherent in harnessing the resources of the social networks involved in nepotism and cronyism, but there are also major problems arising from the inequality and unfairness of these practices. A theoretical consideration of cultural values combined with illustrative cases is used to discuss nepotism and cronyism in different cultures. We suggest that nepotism and cronyism exist in all cultures but perception and discussion of these phenomena as well as the perceived gravity of their effects can vary according to the cultural values of egalitarianism and universalism, together with the economic development of the societies in which they occur.