Purpose – The growth of international business persists, particularly in emerging economies. Business in these developing nations is heavily influenced by national culture. In the Middle East and North Africa (MENA) region, buyer-supplier relationships are often negatively influenced by “wasta” – a term associated with power, influence, connection and corruption. Technology-enhanced business processes diffuse as globalization increases. The purpose of this research was to explore whether and, if so, how electronic reverse auction (e-RA) use might be effective in a MENA national culture. Design/methodology/approach – The authors use a case study method based on data collected from 13 interviews with supply chain members extending beyond the dyad to explain: why Middle Eastern bidders participated in an e-RA; the nature of a unique phenomenon in Middle Eastern culture called wasta; and (3) how wasta, e-RA use, and procurement integrity interact in a sustainable way. Findings – This case study extends knowledge in the area of global supply chain management by identifying new opportunities and providing a mechanism to ameliorate risks. It demonstrated that e-RAs can ameliorate some of the deleterious effects of wasta by increasing transparency and procedural fairness associated with MENA-based buyer-supplier relationships. Originality/value – E-RAs have been criticized as being unfair to suppliers. This study unveils cultural idiosyncrasies where e-RAs overcome a moral hazard associated with MENA buyer-supplier relationships and become a supplier's favored sourcing medium. As economic growth in MENA is expected to outpace all other regions, this study has implications for understanding how regionally specific cultural variables impact B2B sourcing strategy adoption and outcomes.
This case study explores the first and only electronic reverse auction (e-RA) conducted by the United States Air Force (USAF) in Kuwait and addresses both theoretical gaps in e-RA knowledge and practitioner gaps within the Department of Defense (DoD). Qualitative research based on a single case study explored 1) cultural implications of conducting an e-RA in the Middle East and 2) procedures DoD contracting officers could follow to use e-RAs for stateside and contingency procurements-and expected savings from doing so. Findings suggest that Middle Eastern sellers with a cultural disposition to avoid risky technology-based acquisition participated in the USAF auction because they trusted the USAF more than buyers in the local market. Sellers also felt increased satisfaction with the e-RA even when they did not win because the process increased fairness, transparency and reduced the negative effects of wasta (i.e., using connections or influence) and the general Arab business climate of distrust, unfairness, and favoritism. Secondly, a detailed spend analysis of FY07-08 USAF spend data, extrapolated across the DoD, suggests the DoD is leaving billions of dollars on the table by not using e-RAs.Drawing on the results, implications for theory and practice are explicated. Finally, study limitations are disclosed, and opportunities for future research are identified.
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