Doing Business in Saudi Arabia

1) Prepare a short description of the most striking cultural characteristics that may affect business interaction in this country.
Doing business in Saudi Arabia requires significant research if I expect to be successful. There are many cultural differences that must be taken in consideration prior to and during business interactions. The Saudi Arabian culture, its shared values and norms, is distinctly different from our western culture. Saudi Arabian social structure emphasizes a group rather than individualism. Saudi’s are more likely to identify themselves as a part of something (e.g., “I am from Exxon Mobil”) rather than identifying their individual role (e.g., “I am an engineer”). It will also be important to understand the social stratification within Saudi Arabia. Having a working knowledge of the significance of the tribal affiliations as well as the varied groups of which someone can be a part will help me to understand which individuals I need to approach and build relationships with in order to be successful in the region.

It will also be incredibly important for me to understand the role of religion, specifically Islam, in the region and how it affects work ethic, business decisions, and simple logistics throughout the day. As Americans, we are focused on our work and we allow very little to get in the way of our accomplishments. Saudi’s are very different. Work is secondary to many things, most notably, religion. It is not uncommon for work day delays or pauses in order to allow for prayer time. In order to be successful, I will need to fully understand the religion and how Saudi’s live in relation to Islam. Much of the business etiquette for Saudi Arabia can be traced directly to Islamic principles. While there are striking similarities between Islam and Christianity, the major differences lie in the incorporation of religion into daily lives. For many Christians, Christianity is a component of their life while Muslims see Islam as their guide to life. Failing to recognize and respect this fundamental difference between American and Middle Eastern ideals could completely destroy my chances for a successful venture.

There could also be significant financial implications in doing business in Saudi Arabia that are directly related to Islam. Since the Islamic faith is specifically forbidden from charging or paying interest, any business agreements that I may develop will have to take this into consideration.

2) Find and report five tips regarding business etiquette in Saudi Arabia. a. Do business with honor and recognize that loyalty is recognized and expected in the country. Understand the significance of prestige and social standing within the country and do not become involved in any activities that could cause shame for myself and/or my company or clients. b. Be sure to maintain constant contact with your business contacts. Expect to be involved with all levels within an organization, especially executive leadership. Saudi Arabia places great emphasis on hierarchies and business decisions are rarely made that do not involve input from executive level officials. c. Place great emphasis on spoken communication. This is much more important than written communication which can sometimes be considered inappropriate. d. Understand what it means to develop a relationship with individuals. Learn as much as possible about family and understand that a person’s family is virtually a mirror image of that individual. e. Plan to provide products of the highest quality. Expect to alter any products that may be supplied to adhere to Saudi cultural requirements and customs. Saudi business ventures require international businesses to conform to Saudi molds as opposed to providing “Americanized” goods and services to Saudis. 3) Find (on-line) and report the country scores for Saudi Arabia and the United States for all 5 of Hofstede’s dimensions of culture. Discuss these differences and how differences may influence how you approach your customers and prospects. Long-term orientation (US 29, SA n/a) f. Power Dimension (United States 40, Saudi Arabia 95) i. As a democratic nation without a class system, the US does not prescribe to power within groups unlike Saudi Arabia. The US ranking of 40 indicates that we believe in “liberty and justice for all” whereas the Saudi ranking at 95 indicates a drastically different belief system characterized by affiliation. ii. I would approach my customers very differently in Saudi Arabia than in America. Whereas in the US, subordinates have access to executive leadership in most organizations, this is not the case in Saudi Arabia. I should approach my customers with a great deal of respect and dignity. Additionally, I should recognize that most decision makers are not going to ask questions. It will be the lower level associates that will engage in conversation. Decision makers and leaders will observe and make decisions based on what they learn from the conversations between their subordinates and others in the room. This is very different from the US, where subordinates tend to take a “back seat” to leaders when in meetings. Respect and courtesy are shown through allowing the most tenured or highest ranking official the opportunity to have the lead in conversations. g. Individualism (United States 91, Saudi Arabia 25) iii. This rating indicates that the United States is highly individualistic. We, as Americans, do not place an emphasis on a group or team. We believe that we, alone, are responsible for our own destiny and that we are responsible for ourselves and our immediate families only. We don’t believe that we can influence or impact others, nor do we believe that it is our responsibility to do so. Saudi Arabia, on the other hand, believes heavily in a collectivist society. iv. This will also significantly affect how I conduct business there. Belonging to a collectivist group in Saudi Arabia signifies one’s loyalty to them. It will be imperative that I understand the linkages between individuals and the group(s) in which they belong. Knowing the intricate details of these relationships will help me to understand how to navigate within organizations. For example, if an individual with whom I have been in contact has recently been shamed because of misconduct at work, I will be at a significant disadvantage when attempting to further my interest in developing a business relationship. Once an individual is shamed, he is virtually set apart from his group and not allowed to participate in any aspect of the decision making going forward. If this were to happen, it would be imperative for me to set myself apart from the individual and begin to work on fostering new business relationships with others in the organization if I wished to continue forward with the venture. h. Masculinity (United States 62, Saudi Arabia 60) v. The US and Saudi Arabia are both considered masculine societies on Hofstede’s scale and thus doing business within this dimension will be very similar. Both societies place a high emphasis on achievements and accomplishments and are very adept at speaking to them. Individuals continuously strive to be the best they can be in everything and are extremely competitive. vi. My approach to business should be parallel on this dimension with the exception of understanding the difference in the driving factors between the two countries. As Americans in an individualistic society, our drive is simply doing better for ourselves whereas Saudis will be driven by their collectivistic group and religious beliefs to achieve. Both societies “live to work” and thus are not afraid to put in many hours to be successful, understanding where this drive comes from will put me a step ahead though in business conversations. i. Uncertainty (United States 46, Saudi Arabia 80) vii. The US is ok with uncertainty and much more comfortable with risk than Saudi Arabia. This uncertainty can morph itself into many things including innovation, new ideas, etc. This uncertainty acceptance is part of the reason that the US is typically on the cutting edge with new products whereas Saudi Arabia adopts a “wait and see” attitude for new technology and business innovation to prove itself before embarking on the adventure itself. viii. This variation is hugely different between the US and Saudi Arabia. In order for me to be successful in doing business in Saudi Arabia, it will be imperative for me to prove the products not as innovative but as tested and validated to address the need. This is also where quality is a huge factor for Saudis. Saudi’s do not want to take a chance on quality to be on the cutting edge of a venture. They want to be sure that what they are investing in will provide a relatively safe return and that they are signing on to provide a high quality good or service or that they are being provided that high quality good or service themselves. j. Long-term Orientation (United States 29, Saudi Arabia n/a) ix. While the US was given a score of 29, indicating a more short-term orientation, Saudi Arabia was not scored on this dimension. As a society, the US tends to focus less on long-term goals and more on short-term performance. This is evident in the way we approach our businesses, the relative ease with which we move around, and the way we act as consumers. Always looking for the “next big thing”, we seldom purchase items because they will last. We purchase what is new and what is now, knowing that with the speed at which our technology is changing, it will be outdated in a very short time. x. Since Saudi Arabia is more quality oriented than the US, I would expect that they take a more long-term approach but cannot report a score to validate that assumption.

Bibliography
Hill, C. (2009). International Business: Competing in the Global Marketplace (7th ed.): McGraw-Hill Irwin.
Nettresults (Creator and Poster). (2010, August 20). 10 Tips on Arab Culture for Successful Business in the Middle East. Retrieved from http://www.youtube.com/watch?v=U9XoD9V9Bvg.
Hofstede’s Cultural Dimensions. (2013). Retrieved June 7, 2013, from http://geert-hofstede.com/saudi-arabia.
Hofstede’s Cultural Dimensions. (2013). Retrieved June 7, 2013, from http://geert-hofstede.com/united-states.html.