Apr 27

Mecca salem i Challenges of Doing Business in Saudi Arabia

© istockphoto.com/salem

A kingdom built upon and unified by Islam, Saudi Arabia, with its vast plains and endless deserts has fascinated travellers for centuries. Occupying nearly 80% of the Arabian Peninsula and the largest exporter of petroleum in the world, Saudi Arabia hosts a series of buzzing and successful cities. A monarchy with a rich Arab and Muslim heritage, Saudi Arabia is also characterised for its high degree of cultural homogeneity.

Cross-cultural training courses such as Living and Working in Saudi Arabia increase an organisation’s awareness and understanding of some of the potential cultural differences which may act as stumbling blocks for companies working in Saudi Arabia. Intercultural Training Middle East programmes ensure that all concerned create strategies for drawing benefits from these differences.

The following are five of the key cultural concepts international organisations face when setting up or doing business in Saudi Arabia.

Communication Style – Differences in communication styles can often be a cultural challenge and as a result, international organisations doing business in Saudi Arabia without adequate briefing may often find themselves feeling confused and frustrated. The communication style in Saudi Arabia tends to be quite indirect and high context. In other words, this means that communication styles in Saudi Arabia tend to rely more heavily on body language and other non-verbal cues such as tone of voice and the use of silence. When doing business in Saudi Arabia, it is wise to remember that information is rarely explicitly stated, silence is often used for contemplation and a direct “no” is almost never used.

Islam – Islam touches many aspects of society within Saudi Arabia. The country is governed on the basis of Sharia (Islamic Law) and a great majority of the population are Arabs who adhere to the Wahhabi sect of Islam. Islam shapes the values and rules concerning the appropriate way to behave and relate to family, community and business. As a result there are customs and social duties that affect the Saudi Arabian business world and affect the way business is dealt with. In the world’s current climate, several stereotypes are prevalent concerning Islamic faith and therefore when doing business in Saudi Arabia it is important to reserve time to research Islam yourself. Ignorance as to how Islam influences business and every day life could damage relations.

Relationships – Personal relationships are a fundamental aspect of Middle Eastern culture. People take a sincere interest in each other and invest a lot of time in getting to know others. There isn’t a clear line of distinction between business and personal relationships which means that one is quite often used to further the interests of the other. People tend to prefer getting to know a person before trusting them in business. When doing business in Saudi Arabia, remember that a huge emphasis is placed on networks and refusing requests made by friends is often considered rude. Great pride is placed in hospitality with which a person’s character is measured, take advantage of this opportunity to develop personal and professional relationships.

Attitude to time – Although punctuality is expected of foreigners, business in Saudi Arabia has a more flexible attitude towards time and business meetings tend to be less structured in nature. However, it is rare for meetings to intrude on daily prayers and equally, when doing business in Saudi Arabia, considerations must be made to schedule business meetings in a way that does not interfere with prayer times. Furthermore, it is important to remember that the working week begins on a Saturday and ends on Wednesday with Thursday and Friday being the official days of rest.

Hierarchy – Saudi Arabian culture places great emphasis on dignity and respect. Younger people are expected to display this respect to their elders by using the appropriate titles and levels of deference. Within business, leaders distribute power from the top and only those in senior positions have decision making capacity. When entering a room or greeting your Saudi counterparts for the first time you should approach the most senior person first.

In many ways, Saudi Arabia remains a sensitive region in terms of economy, religion and culture. Although an important first step, it is not enough to simply recognise the intercultural differences that exist when doing business in Saudi Arabia. International organisations must also strive to comprehend the reasons behind cultural challenges in order to be able to exploit differences to create benefits. A Cross Cultural Training Middle East course such as Doing Business in Saudi Arabia will help organisations develop strategies to maximise the potential of doing business in Saudi Arabia. Moreover, intercultural training will contribute towards the development of an interculturally competent workforce, a definite advantage in today’s fiercely competitive global business environment.

© Communicaid Group Ltd. 2010

Apr 06

The Kingdom of Saudi Arabia is the largest of all the Gulf States. The Kingdom of Saudi Arabia in its modern form dates back to 1932, when the states of Nejd and Hejaz united under the first king of Saudi Arabia, Abdul Aziz Ibn Saud. Oil is at the centre of Saudi Arabia’s wealth and accounts for around three quarters of the entire economy.

Saudi Arabia’s identity is intertwined with a devout and complete adherence to Islam. The Islamic religion has shaped Saudi culture and customs; in fact the Saudis are the custodians of Islam’s holiest cities, Mecca and Medina.

 

Arab businessman monkeybusinessimages i Benefits of Doing Business in Saudi Arabia

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Organisations doing business in Saudi Arabia and individuals looking to invest in Saudi Arabia will be able to take advantage of a number of key benefits of doing business in Saudi Arabia. Maximising some of the key benefits outlined below requires a sound understanding of Saudi business and social culture, values and attitudes and communication styles which you can gain from a Doing Business in Saudi Arabia cross cultural training program.

Ease of Doing Business
According to the World Bank, Saudi Arabia was rated 13th out of 183 countries in terms of general ease of doing business in 2009. This is an encouraging sign for those organisations doing business in Saudi Arabia, the largest of the Gulf States.

A Shift Away from Nationalisation to Privatisation
In recent years, Saudi Arabia has experienced a shift in its national business model. There has been an increase in privatisation and the corporatisation of companies. This has created a positive environment for the import of consultancy services from abroad. The shift from a nationalised to privatised business model means that Saudi Arabia is rapidly becoming a profitable place for doing business and setting up operations.

A Reinvigorated Political System
In 1995, a consultative body was formed for the kingdom, known as the Council of Ministers. Moving towards a cabinet-style government, the Council is made up of ministers who are allocated specific responsibilities. Under the confines of the Sixth Development Plan, economic development has been split into key macroeconomic goals. This may, in time, lead to further liberalisation of the economy.

Saudi Arabian business culture is complex and influenced by age-old customs and traditions which have forged a nation out of the desert. Participating in a cultural awareness training program such as Communicaid’s Doing Business in Saudi Arabia will help your employees to understand local customs and business habits and give your organisation an advantage when doing business in Saudi Arabia.

© Communicaid Group Ltd. 2010

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