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Wasta, Work and Corruption in Transnational Business

April 14, 2014

When does using your social relations in management become "corruption? Photo Credit: Interact Egypt - Play Innovation via Compfight cc

Thinking about wasta: When does using your social relations in management become “corruption”? Photo Credit: Interact Egypt – Play Innovation via Compfight cc

I recently read an article on wasta and “corruption” in international business that got me thinking about some of the problems of framing complex cultural ideas in overly simplified ways.

In my Intercultural Relations class, I offer a detailed case study of a businessman (whom I will call Girgis since that’s what I call him in another context in Chapter Six of Connected In Cairo).

Girgis worked for a company that insisted as part of their global corporate culture that there be no “corruption.” Six years after opening its office in Egypt, they continued to be plagued by behaviors they understood to be “corrupt.”

A particular problem seemed to be nepotism. Every time an Egyptian manager was hired, he began filling new slots in the company with relatives, and the children of friends. This was contrary to corporate policy and so these managers had to be rotated out or fired.

The company thought it had found a solution in Girgis.

Born in Egypt, Girgis had come to the U.S. for college, married an American woman and stayed to complete an MBA, then joined the company. He had risen through the ranks with stellar performance evaluations, and was currently a branch manager in New York state. Fluent in Arabic as well as English, cosmopolitan and equally at home in the US and the Middle East, the company thought he would be the solution to their problem.

Yet within his first year, the regional supervisor discovered that Girgis had appointed a cousin with little prior experience to an important management position without doing a open search. When confronted, Girgis told his supervisor, “In the U.S., this would be corruption. Here, it’s wasta.” When they pressed him further, Girgis became evasive and asked if they wanted his resignation.

Recognizing “wasta” as a rich point signaling a cultural difference, one of the regional managers called in an anthropologist (me, actually) as cultural consultant. I explained that wasta referred to a network of informal loans and favors traded by Arab men in order to move up in the world.

Encouraged by my open, neutral tone, Girgis opened up further. “My father mortgaged family lands to pay for my college,” Girgis said. “I owe him everything. If he asks me to find a job for his brother’s son, how can I say no?”

I explained that aside from truisms about “patriarchy” and “respect for elders” in Arab culture, it is important to recognize that families are economic units. In a case like this, family lands were held by the eldest brother but were assumed to be in trust for the family. In mortgaging them for the education of his son, the eldest brother risked the entire family’s patrimony.

All Girgis’s uncles had to help pay off the mortgage. Having contributed to to Girgis’s position, when he arrived in Egypt they had a right to expect a return on their investment in the form of jobs for their sons or for the sons of friends to whom they were beholden in other ways. “You can send me anywhere else in the world and I’ll run the office by the book,” Girgis told his supervisor. “But I can’t do that here.”

I pointed out that almost any Egyptian man they hired to run the office would be equally suspended in webs of wasta obligations. This “investment and return” frame I created for understanding, emphasizing the economic parallels between Arab families and running a business, was easy for the managers to understand.

It’s not the only way to understand wasta. It was a particular interpretive frame useful for understanding this complex concept, which produces many different practices in different kinds of situations. Other frames might be more useful in other contexts.

I am not alone in my attention to wasta as a significant intercultural factor in transnational business. I just stumbled across an article entitled “The effect of wasta on perceived competence and morality in Egypt” in the international business journal Cross Cultural Management.

Authors Ahmed A. Mohamed and Mohamad S. Mohamad surveyed 421 Egyptian undergraduate business students at one public and one private university.

Their study suggests that subjects discounted the competency and morality of employees who used wasta to obtain a job. They also found that students from lower socioeconomic backgrounds were less likely to criticize those who used wasta to get a job.

One significant flaw in this survey is the rather simplistic definition of wasta. The authors define it as “the intervention of a patron in favor of a client in attempt to obtain privileges or resources from a third party.” This frames wasta a kind of individual choice: you ask someone to give you a job, or you earn it through your own competitive merits in a free job market.

This definition is possibly useful in a very narrow set of circumstances. In my experience, wasta is better understood as a web of social relations involving exchanges of favors.

Masculinity in Egypt includes the capacity to mobilize a network of kinsmen and friends for such tasks as finding employment, but also meeting financial obligations and cutting through bureaucratic red tape. Men can pursue favors, yes, but they also owe favors–sometimes even to people of whom they have not yet asked anything.

Merely treating wasta as a form of corruption, or seeking patronage is too limited. And it leads the authors to assume (as if it were self-evident) that wasta is always a bad thing, something whose use should be reduced.

For example, I’ve known several Egyptian businessmen who thought wasta was an improvement on Western models of hiring. He pointed out that people who get jobs through wasta are beholden to you, as well as to the person who got them the job. Since that person is usually part of a web of relations that include other family and friends, offending them can have significant social consequences.

Net result: greater loyalty, less likelihood of theft, less likelihood of negotiating for new jobs behind your back and leaving you in the lurch, etc, he claimed.

It would be interesting to see the authors engage in a more complex survey of attitudes that was open to a wider range of interpretations and contexts. In what contexts do businessmen think wasta might be valuable? In what contexts might it lead to problems? What might corporations doing business in Egypt learn from

Here’s the abstract:

PurposeWasta is an Arabic word that means the intervention of a patron in favor of a client in attempt to obtain privileges or resources from a third party. In Arab countries, wasta is often used to obtain employment, thus causing unequal opportunity. The purpose of this paper is to study the attributions that people make regarding the competency and morality of wasta users. The main hypothesis is that those that use wasta in obtaining employment will be perceived as less competent and moral than those that do not. Design/methodology/approach – The study is designed as a factorial quasi-experiment, with three independent variables; wasta, employee qualification and socioeconomic status. The dependent variables are perceived competency and morality. Data were gathered from 421 Egyptian undergraduate business students attending a public and a private university. Findings – In support of the hypotheses, subjects discounted the competency and morality of employees that used wasta to obtain the job. Additionally, subjects from lower socioeconomic groups evaluated wasta users more positively than more affluent subjects. Originality/value – This is the first study that attempts to use attribution theory to examine the effects of wasta on perceptions of competency and morality. The study may be useful in identifying the disadvantages of using wasta, thus reducing its use.

References:

Mohamed, Ahmed A. and Mohamad S. Mohamad. 2011. The effect of wasta on perceived competence and morality in Egypt. Cross Cultural Management 18(4): 412-425.

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