Doing Business in Saudi Arabia Report

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Introduction

Saudi Arabia is an oil-based economy with strong government controls over major economic activities. It has the largest reserves of petroleum in the world, ranks as the largest exporter of petroleum, and plays a leading role in the Organization of Petroleum Exporting Countries (OPEC) (Hendon et al, 1996). Saudi Arabia is basically a Muslim country and as such has basically Islamic culture. However, economic prosperity in the mid-1970s brought exposure to Western education and ideas. This mix of Islamic culture and Western culture enables the Saudis to communicate better with the rest of the world (Hendon et al, 1996).

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Values

In Saudi Arabia, loyalty to family overrides all other social obligations. The overwhelming majority of the population of Saudi Arabia is Arabs who adhere to the Wahhabi sect of Islam (Gorrill, 2007). They value their Islamic religion highly and it is Islam that offers the framework for all social and political behavior. In Islamic culture, emphasis is placed on ethics and expected social behavior such as generosity, respect and solidarity. These are also the foundations of the way Arabs handle business (Gorrill, 2007). To Saudis, time is a highly malleable frame of reference within which they operate. They do not want to be rushed.

Common Beliefs

As Muslims, Saudis fervently believe in only one God, Allah (Hendon et al, 1996). They consider females subordinate to males. Saudis think what can be accomplished depends mainly on God’s will. The expression, “God willing,” is the Saudi’s daily affirmation of this belief. Saudis, do the best they can in a situation and accept delays and interruptions as signs that God’s approval has not been earned. Westerners will certainly find their orientation toward time difficult to adjust to because it is opposed to their own sense of punctuality. Generally, the Saudis are not confrontational and tend to indirectly say “no” by delaying matters or avoiding accessibility (Hendon et al, 1996).

Their society places a premium on putting appearances and having a favorable social image. Hence they dislike arrogant and harried behavior on the part of their business visitors or partners. Saudis appreciate being informed ahead of time about the agenda of discussions (Hendon et al, 1996).

Social Rules

The other side documents should never be handed with the left hand (ATC, 2008). The soles of the shoes should never be exposed when one sits cross-legged (ATC, 2008). Gesticulating with the hands is considered impolite. When tea and coffee are served, it is polite to take at least one cup and one must oscillate the cup to signal that a refill is not desired (ATC, 2008). During Ramadan, it is best to refrain from drinking and eating when in the company of someone observing the fast (The Saudi Network, 2008).

Relationships & Communication

Saudi Arabians indicate that a firm agreement has been reached with a handshake or oral commitment. But in normal practice, Saudis usually greet each other with kisses on the face or on the forehead and walk hand-in-hand (ATC, 2008). When entering a hall full of people, a Saudi will greet each person individually with a handshake while standing. The same is expected of visitors (ATC, 2008). In Arabic, an individual is addressed by his or her first name, and any title they possess.

Saudi ministers are always addressed as “Your Excellency” and members of the royal family as “Your Highness” (The Saudi Network, 2008). Emphasis is placed on tone of voice, the use of silence, facial cues, and body language. Silence is often used for contemplation and should not be interrupted (Gorrill, 2007). Saudis use very little personal space and are likely to stand close to a person they are conversing with. Saudis often use body contact to emphasize a point or confirm that they have the attention of the listener.

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Withdrawing can be interpreted as being impolite (Gorrill, 2007). They prefer to work with people they know and trust and will spend a great deal of time on socializing. Appearances are important to Saudis and it is important to dress and present oneself well. As Muslims, Saudis do not normally shake hands with a woman or engage in the conversational body contact (Hendon et al, 1996)

Business Meeting Etiquette

Appointments are necessary for meeting and it is the custom to keep foreigners waiting or have their meeting cancelled on arrival. Meetings are generally not private until after a relationship of trust has been developed and one can find frequent interruptions. Others may wander into the room and start a different discussion (ATC, 2008). Business meetings start after prolonged inquiries about health, family, etc. It is not appropriate to inquire about a Saudi’s “wife” and “daughters”.

Business Negotiating

Saudis are tough negotiators and business is hierarchical. Decisions are taken by the highest ranking person. Decisions are generally made slowly and the process should not be rushed. Repeating main points during negotiation will be interpreted as telling the truth. Decisions are easily overturned..

Dress Etiquette

The daily costume of most Saudis is long white robes. A foreigner would be expected to wear a suit and dress well. Business women should make certain that their collarbones and knees are covered and that their clothes are not form-fitting. For casual wear, slacks and a short-sleeve shirt are acceptable, but shorts should not be worn in public (ATC, 2008).

Bibliography

Gorrill, J. (2007). Doing business in Saudi Arabia| Saudi Arabian Social and Business Culture. Web.

The Saudi Network (2008). Business and Social Customs in Saudi Arabia. Web.

ATC (Australian Trade Commission) (2008). Saudi Arabia: Doing Business. Web.

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Hendon, W. Donald; Hendon, Angeles Rebecca; Herbig, Paul (1996). Cross-Cultural Business Negotiations. Praeger Publishers. Westport, CT.

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