Scale development and validation for measuring business-to-business Wasta relationships

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