...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...
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...purifying the Islam and wanted to bring back the traditions mentioned in Koran supported the formation of Saudi kingdom and in 1922 Saudi kingdom was born. There are two Arab societies Shiites in the south and Sunnis in the middle and north side who are pursuing their way of life that dates back around 5000 years. By tradition Saudi is conservative country who believed in their religious values and traditional practices. There is a significant difference between western and Saudi culture mainly because of the religion they follow most of the western countries follow Christianity were as Saudi follows Islam both of their culture were influenced by their holly books Bible and Quran. In United States there is lot of individualism which helped them to create lot of entrepreneurs were as in Saudi there is a lot of family and friendship ties in all there business related activities, friends and family suggestions will be kept above expert advice so there is not much entrepreneurial activity in Saudi. Saudi imposes lot of restrictions on women and women have a very limited role in shaping a society because all the decisions made in Saudi were by male, women were even restricted to drive any vehicle it shows how much male centric Saudi society is where as in US woman were given sufficient space for them to evolve and there is no gender based restrictions in US unlike in Saudi. The Americans are very concerned about time and scheduling but for the Arab, who lives in a society where...
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...Rosalia Cochon October 17, 2014 Saudi Arabia Oil Sales to US Imperiled by Shale Boom Analytical Essay After years of keeping the price, of crude oil sold to the United States, low enough to maintain market share, Saudi Arabia is at a disadvantage as the shale gas leaves American refiners with abundant supplies of inexpensive domestic oil. This article, published on Bloomberg Business Weekly on September 28, 2014, describes the changes in Saudi´s oil market now that the US turns to lower-priced domestic oil. Saudi´s imports are being pushed back by domestic production, rising to 65% in the past five years due to technological advancements in hydraulic fraking in part of the US. Saudi´s sales to Asia will become crucial moving forward, as demand for crude in the region is expected to rise 44% through 2035, while demand from North America shrinks. Due to United States’ preference for domestic oil, the demand of Saudi´s crude oil is decreasing. A decrease in demand implies that consumers (US) plan to purchase less of the good at each possible price since, demand is the consumer's desire and willingness to pay a price for a specific good or service at a given time and place. Therefore, the demand curve for crude oil in Saudi will shift to the left, forcing price and quantity to decrease due to the law of demand which claims that, all else equal, as the price of a good or service increases, consumer´s demand for the good or service will decrease, and vice versa. The demand curve...
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...Saudi Arabia has maintained a trade surplus since 1967 (when its trade statistics were first compiled in their current form). As the kingdom generates a majority of its revenue from petroleum exports, this surplus tends to rise and fall with the price and production of oil. After the oil embargo of 1973, when oil prices were high, the king-dom's trade surplus rose, increasing steadily until 1978. This trend continued after the Iranian revolution of 1979 when oil prices rose to new levels. Between 1978 and 1981 Saudi Arabia's trade surplus doubled, reaching a peak of US$82.5 billion. Trade (expressed in billions of US$): Saudi Arabia Exports Imports 1975 29.682 4.213 1980 109.083 30.166 1985 27.481 23.622 1990 44.417 24.069 1995 50.040 28.091 1998 N/A N/A SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999. The surplus declined steadily throughout the 1980s as export volume diminished and oil prices fell. By 1985, the balance of trade had fallen to just US$7 billion. In 1990, Iraq invaded Kuwait, prompting the United Nations to place an embargo on Iraqi oil. The cut in supply sent prices back up, and as Saudi Arabia heightened production to meet world demand (from 5.1 million b/d in 1989 to 8.2 million b/d in 1991), export revenues increased and the trade surplus rose once again. In 1996, export revenues exceeded import expenditures by US$35.3 billion. In 1998, the world economy slowed. At the...
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...In pre-Islamic times, apart from a small number of urban trading settlements (such as Mecca and Medina), most of what was to become Saudi Arabia was populated by nomadic tribal societies in the inhospitable desert.[38] The Islamic prophet, Muhammad, was born in Mecca in about 571 A.D. In the early 7th century, Muhammad united the various tribes of the peninsula and created a single Islamic religious polity. Following his death in 632, his followers rapidly expanded the territory under Muslim rule beyond Arabia, conquering huge swathes of territory (from the Iberian Peninsula in west to modern day Pakistan in east) in a matter of decades. In so doing, Arabia soon became a politically peripheral region of the Muslim world as the focus shifted to the more developed conquered lands.[39] From the 10th century to the early 20th century Mecca and Medina were under the control of a local Arab ruler known as the Sharif of Mecca, but at most times the Sharif owed allegiance to the ruler of one of the major Islamic empires based in Baghdad, Cairo or Istanbul. Most of the remainder of what became Saudi Arabia reverted to traditional tribal rule.[40][41] In the 16th century, the Ottomans added the Red Sea and Persian Gulf coast (the Hejaz, Asir and Al-Ahsa) to the Empire and claimed suzerainty over the interior. One reason was to thwart Portuguese attempts to attack the Red Sea (hence the Hejaz) and the Indian Ocean.[42] Ottoman degree of control over these lands varied over the next four...
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...Instruction on the Group Project Principles of Management Each project group is expected to collectively write a case report that focuses on an ethical issue faced by a real-life organization, a specific industry, or a business profession. Following is a suggested outline for the case written by your group: I) Background Information (e.g., corporate history) II) The Central Ethical Dilemma(s) III) Alternative Ways to Deal With the Ethical Dilemma(s) IV) Possible Consequences and Implications of Alternative Solutions V) Ethical Theories That Are Applicable to This Case VI) Key Questions for Case Study When writing this case report, you are encouraged to gather as much relevant information as possible from various online and offline data sources. However, all the information used in your case analysis must be properly cited in the main body of your report, including the author name(s) and publishing date/year, if available, and the detailed citations must be included in the References section. Your case report will be graded on the following criteria: 1) Proper application of ethical theories 2) Quality of writing (readability, originality, grammatical correctness, etc.) 3) Breadth of information utilized (at least 20 different articles or books need be cited and actually used in writing this case) 4) Demonstrated critical thinking skills 5) Robust logical reasoning 6) Comprehensive data analysis (i.e. taking into...
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...Report on the US Government Budgetary Systems and Saudi Arabia Government Budgetary Systems Budgetary process of the US and Saudi Arabia are different from each other in many aspects. Budgetary systems of the US are based on the budget and Accounting Act of 1921 and Congressional Budget and Impoundment Control Act of 1974. Whereas budgetary systems of the Saudi Arabia are based on the rules and regulations devised by the Kingdom of Saudi Arabia. Budgetary system of the Saudi Arabia is not disclosed to the general public. National budget in Saudi Arabia compiled by the Ministry of Finance is approved by the Royal institution and then it is allowed to be published in the Official Gazette. Budgetary Systems of the Saudi Arabia was made on the basis of the Hijri year but in 1987 its basis was changed to the Gregorian calendar. In US budget is prepared when president submits a request to the congress for the preparation of the budget. Then Office of Management and Budget carries out the formulation process of the budget. Budget is prepared for all the institutions of the state from federal executive departments to the independent agencies. Budget Control Act of 2012 also plays its role to in the formation of the different provisions of the budget and controls it. Different resolutions related to the budget are also approved by the congress, House and Senate. Authorizing committee is capable of resolving any issues related to the budget process. Categories of the different types of...
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...Comparative and Absolute Advantage ECO 561 Alfred Igbodipe 7/24/16 Introduction Due to the differences between the countries in its profitable fundamentals; the International Trade occurs. The contracts between the countries consider as the primary driver of the global exchange. These contracts concluded on the basis of the countries beneficial elements and advantages. Each international trade between the countries depends on numerous focal points of this exchange process. The economics and producers effectiveness measured by absolute advantage for these economics/producers. For example; if the producer needs lesser amount of contributions/inputs to provide specific product, then this producer has an absolute advantage in producing process. Comparative advantage discusses the economy/producer ability to produce a specific product with a minimum opportunity cost comparing to another producer. "There is a possibility of each nation to have an absolute advantage in producing and delivering the products; however; the different nations could in any case have distinctive comparative advantages". The international trade theory based on two dynamic concepts; "Absolute and comparative advantage". The main difference between these concepts is that the absolute advantage measure nation ability to produce more profits per unit of beneficial input than another. However; the comparative advantage measure the ability that one nation has an absolute advantage in each kind of produce. ...
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...religious beliefs, traditions, work ethic ( culture) The full name of Saudi Arabia is the Kingdom of Saudi Arabia. Arabic is the official language. In the 7th century, the successor of the Mohammed who was the founder of Islam established Arab empire. The 8th century is a heyday for Saudi Arabia, and its territory crosses Europe, Asia and Africa. However, in the 16th century, Arab empire was ruled by the Ottoman Empire. In the 19th century, The Great Britain invaded into Arab, it was divided into two parts, Hejaz and Nejd. In 1924, the chief of Hejaz in Saudi Arabia merged Nejd and then gradually unified the Arabian Peninsula. Finally, in September 1932, he declared the establishment of Saudi Arabia kingdom. Saudi Arabia is the birthplace of Islam. Islam has become the world’s second large religion. The founder Muhammad established Islam approximately A.D 600 in Mecca; the sacred city of Islam is located in Saudi Arabia. Islam prospers in northwestern Africa, the Middle East, Central Asia, Pakistan, and some Southeast cities. Religion strongly affects consumption behavior of Arabian. For example, Muslim consumers are not allowed to consume alcohol and pork, besides that, the nation is governed under the Law of Islamic. Muslim pray five times a day, the local people usually go to the mosque to do religious service. Women must wear black robes in that day. Some of the traditions and customs in Saudi Arabia are similar to the other countries, but some of them are not. Most...
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...MARKET STUDY: SAUDI ARABIA Compiled by: Directorate International Trade Sub-directorate: Europe, Russia and Middle East Department of Agriculture, Forestry and Fisheries March 2010 Authors: Mr Gert van Rensburg (GertVR@daff.gov.za) and Ms Joyce Letswalo (JoyceLe@daff.gov.za) Disclaimer The Department of Agriculture, Forestry and Fisheries take no responsibility for any action taken from this study. This is a desktop study and own research must be undertaken, before decisions is made based on this study. SUMMARY1 This country market study of Saudi Arabia examines the trade flows between South Africa (SA) and Saudi Arabia. The major objective of the study is to identify agricultural products that have the potential to be exported to Saudi Arabia. First the study gives a historical background about Saudi Arabia, looks at some country facts, give an economic overview and look at the regional and international relations of Saudi Arabia. Then it examines the trade policy of Saudi Arabia, looks at bilateral agreements between SA and Saudi Arabia and at total trade between these two countries. From here on there is focused on agricultural trade, inter alia taking into account the following: the most important products imported and exported and the trade balance. An analysis is done to determine posible exports to Saudi Arabia. Finally it looks at some trade barriers and a conclusion and some comments are made on trade with Saudi Arabia. The Kingdom of Saudi Arabia (Saudi Arabia) is...
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...Week 5 – Country Analysis Saudi Arabia Describe The Economy A: Identify Type: predominantly agricultural, industrial, or service? Give Percentages The predominant industry in Saudi Arabia is Oil Exportation which is Agricultural/Service based. Saudi Arabia ranks as the global leader in petroleum exporting, it currently possesses 18% of the world’s petroleum reserves. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. B: Describe major products/services produced, exported, imported Profucts/Services Produced: Remains largely dependent on the production and export of oil. Saudi Arabia produces more oil and natural gas liquids than any other country in the world, more than 9 million barrels per day. Imports: Increasing demands for consumer goods in Saudi Arabia have driven up overall imports a trend that is expected to continue for the foreseeable future.. The largest categories of imported goods are machinery and vehicles, which make up more than 50 percent of all imports, as well as appliances, electrical equipment, sound and television apparatus, aircraft, and cars. In addition, the United States is Saudi Arabia’s leading source of imports for military equipment, machinery, foodstuffs, and transport equipment. The European countries, including Germany, France, and Britain, are other leading suppliers. Exports: Roughly 90 percent of Saudi exports are related to oil also including petrochemicals, plastics, construction...
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...9/11 Causes and Effects The Attacks on the two world trade centers on September 11, 2001 left America devastated. The biggest causes of 9/11 were the Al Qaeda terrorist group wanting to carry out actions of terrorism and destruction, another cause would be the US and Al Qaeda wanting to start a war, lastly the presence of US troops in Saudi Arabia enraged those certain terrorist groups. The Al Qaeda terrorist group was one of the biggest causes of 9/11 mostly because they were the ones who carried out the attacks on 9/11 destroying the World Trade centers. The Al Qaeda group carried out the attack on the twin towers with 19 hijackers. The Terrorist also flew 2 others planes. One of the 2 planes hit the Pentagon, The fourth plane crashing...
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...The Good, the Bad and the Worst An Assessment of the U.S relations and policies in the Middle East Gold and silver where the elements of wealth during the peak of mercantilism as the sole policy back then was the 3G’s policy (God, Gold and Glory) in the reign of the British and French Empires. Oil, however, climbed to the top of the chart of the most strategic commodities starting the early years of industrialization passing by the Second World War, when the U.S. became by far the largest oil consuming nation; consuming oil at abundant rates to support their troops overseas and to maintain the high rate of consumerism of the American lifestyle in the homeland. Soon oil grabbed the attention of the top industrialist nations as the most critical element of their survival as super industrial economies to ensure their growing manufacturing base is supported by adequate oil supplies. Having almost two thirds of the oil reserve in the world, the Middle East became the center of attention for all industrial nations, some of which had more strategic plans than others. Both, Britain and the United States realized that their wealth and survival as super powers is so much correlated with their level of control and development of the Middle East oil-rich countries. However, the feasibility of running the Arabian states both politically and economically faded in the 20th century, since maintaining their administration was too expensive for the United Kingdom, and gradually started...
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...Culture and Business in Saudi Arabia 1. What forces that shape modern Saudi culture? How similar to different police forces from those that shaped the culture of Western Nations? Because modern Saudi culture is rooted in the nomadic tribes that once roamed the Arabian Peninsula, some modern day Saudi Arabia culture can be traced to the Bedouins. Islam has also influenced modern Saudi culture. Stores and restaurants still do the daily prayer dictated by the Koran and the strict dress codes followed by women make it unlike any other Western culture because the values and the social norms are based on religious teachings that still continue. 2. What kind of misunderstanding or likely to arise between an American company and the Saudi enterprise, if neither of which has experience in dealing with the other? Different cultures have different ways of doing business. In Saudi Arabia, family and friendship plays a big role in career advancement whereas in the US individual success is more important. Woman make up a share of the workforce but in Saudi Arabia women have little freedom. It is important that both sides are sensitive to each other’s culture for effective business conduction. 3. If you were in a position to advise a Western company that was considering doing business in Saudi Arabia for the first time, what would your advice be? The most important piece of advice would be to take time and learn about the Saudi culture and the Saudi way of doing business...
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...Gulf countries – particularly Saudi Arabia – have been much involved Syria’s conflict; secretly funding the rebel groups against Assad. And now, are there no funds left to help the millions of displaced inhabitants of Syria due to this war? Qatar, Kuwait, UAE, Saudi Arabia, and Bahrain are in the top 20 countries with the highest GDP per capita. They are Arab, they speak Arabic, all have a similar culture to Syria, and are all predominantly Sunni. Assimilation issues would be very low compared to other countries such as in the West, where most of them are migrating to. Why is the Gulf doing nothing to help them? It’s time for the US to pressure them and get them to start receiving Syrian refugees. Saudi Arabia would benefit from taking in refugees as it would increase their currently small work force, and the country is already used to having immigrants, who make up 30% of the population. The demographics of the country will soon cause issues as the population is quickly ageing, and the country needs more workers in the lower class. Additionally, there are has been an ongoing Sunni vs. Shia war for a long time, hence Saudi’s involvement in Syria against Assad and Iran. If they value the Sunnis that much, the first thing they should do is protect the Sunni-majority population of Syria and bring them to their country to favor their side. If Assad is removed by force, any government that comes after him will probably be Sunni, thus it is in Saudi Arabia’s best interest to show...
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