Navigating wasta in business practices in Lebanon

Abstract

AbstractFaced with severe social, political, and economic challenges, Lebanon is described as a weak state. Argued to be a key factor weakening the formal institutions there, is the prevalent practice of wasta. This article seeks to answer two questions: (1) Why is wasta prevalent in a business environment characterised by weak formal institutions, such as Lebanon? (2) How can managers navigate the use of wasta in the Lebanese business context where it prevails, avoiding its negative outcomes while utilizing its positive outcomes? Fourteen semi‐structured interviews were conducted of managers from the Lebanese industrial sector. The findings highlight that wasta is used due to the networked nature of Lebanese society, economic hardship, widespread corruption and to maintain power. It was found that wasta could be beneficial in securing jobs, removing red tape, and gaining employment for humanitarian reasons. Finally, the negative outcomes of using wasta were found to include the employment of unqualified individuals, a reduction of organizations' productivity and a further weakening of formal institutions.