Informal interorganizational business relationships, satisfaction, and firm performance: Case of Arab Maghreb countries

Abstract

Understanding how informal relationships such as Wasta operate in different cultures is necessary for multinationals to thrive. However, studies on the effect of such networks on multinationals' activities in Arab countries remain limited. The aim of this study is to examine the effect of informal inter-organizational business relationships on the satisfaction and performance of firms in Arab Maghreb countries. This research is based on a self-administered survey with 534 procurement managers from Morocco (n = 220), Algeria (n = 148) and Tunisia (n = 166). We used structural equations to test our hypotheses. The results showed that Wasta has almost the same effect on interorganizational relationship in the three Maghreb countries. Specifically, Mojamala (affection) does not influence the satisfaction of the B2B relationship within the three counties under study, while Hamola (reciprocity) and Somah (trust) positively influence this relationship. The analysis showed that the negative side of Somah has a negative influence on satisfaction only in Algeria. The results also showed that satisfaction positively influences the performance of Maghrebian B2B partners. These results show that the phenomenon of Wasta is rooted in the cultures of the Maghreb countries and underscore the need to conduct further studies to understand it and to raise awareness among multinationals that plan to do business with the local partners or those who are planning to relocate. Implications for IB, theory and policy are discussed together with the study’s limitations and suggestions for future research. Through this study, we contribute to the development of research on cross-culture management by showing the effect of Wasta as a cultural phenomenon on business relations in the Maghreb countries. Our research is the first to investigate the effect of the informal interorganizational relationship on the satisfaction and performance of B2B partners.