The opening business in Saudi Arabia - Research Paper Example

The opening business in Saudi Arabia Introduction Globalization does not only mean capturing new markets but also helps companies to produce products specific to different countries. However, it is not an easy task to do international business as many factors need to be considered like international business law and cultural aspects. The cultural difference can manifest in one’s communication style, attire and even body language like in some countries business meeting needs to be conducted wearing formal attire in other countries informal meetings are encouraged through small talks and personal acquaintance. In this paper, I will talk about the cultural differences that exist in two completely different countries like the US and Saudi Arabia. As a consultant, I will be advising an US based corporation about conducting business in Saudi Arabia. Negotiation style Saudi Arabians makes their business negotiations based on mutual trust and so my client will need to extend a relationship of trust as the Arabians do business with people and not companies. I will also advise my client not take offense if the Arabians appear to be loud and aggressive as it is their style of talking, and it does not indicate that they are interested in doing business. Comparative to the Americans, the Saudis are more interested in establishing long-term business relations and therefore they are prepared to make certain concessions in their negotiations. Whenever there is conflict, there is high possibility that my client will have to deal with mediators since the Saudis avoid direct confrontation to protect the dignity of all parties. The Saudis may refer to individuals who are well acquainted with my client and so they will be pressurize my client to change his mind. However, they have the ability to resist any pressure imposed on them. Also, my client needs to remember that women are not treated equally like men by the Saudis and so women should be excluded from any negotiations. I will also advice my client to personally negotiate with the Saudis instead of sending any subordinates since they feel insulted if they cannot negotiate with the top person (Doole & Lowe, 93). Finally, the Saudis believe in postponing decisions as they indulge in long discussions and several more meetings; however Americans negotiate with a time frame in mind and so expect early decisions. Business meetings Before opening business in Saudi Arabia, it is important to keep in mind that it is a conservative country and its ethics and culture are no way similar to a western country like America. In Saudi Arabia, business activities are conducted in a slower pace compared to US and so meetings initiate slowly. Therefore, my advice to my client is to keep patience during business meetings as Arabians prefer to start meetings with informal conversations like topics about family and hobbies. Moreover, my American client may find the meetings disordered as it is common scenario that Arabians do not refrain from attending phone calls or allowing other people to interrupt. In contrary, Americans make it a point to switch off their phones and pay total attention to whoever is speaking. Therefore, in Saudi Arabia my client will need to take the effort to bring the meeting back on track after any disruptions (Fox, 291). Time While doing business with the Arabians time is not a factor since they prefer to do business in leisurely pace. They engage in courtesies which are lengthy, and pleasantries are exchanged both in the beginning and even during the course of the meeting. During pleasantries my client should be careful to avoid asking about the other person’s female relatives. Business conversations do not start before coffee is served and they frequently fall silent which indicates not rudeness but that they are contemplating. Contrary to the Americans who are task-oriented and therefore more particular about time, the Arabian culture is more relation-driven and so they focus on timing (Shoult, 332). Business attire In case of business meetings in Saudi Arabia, men are required to wear restrained attire like dark suits and subtle ties while in America it is the chairman who decides whether participants are required to wear business casuals or business formals. In Saudi Arabia, businesswomen face stricter rules than men like they need to keep their knees and ankles covered, and high neckline is required. Moreover men cannot keep their jewelry visible around their neck (Fox, 290). Etiquette and behavior, handshakes, business cards, Gestures/non-verbal communication In Arabian culture, during business meetings people greet each other with a smile and meeting the eye. Arabian men are accustomed to hugging and kissing each other on the cheek. Since my client is a non-Arabian therefore his hand will be shaken since it is the American way of greeting although it will be more informal like holding hand with both hands, and a symbol of friendship. Arabian men also shake hands with women but men always take the initiative. It is also customary for Muslims to use Arabic words to greet each other and so it will be advisable for my client to learn a few Arabian greetings. Americans in general address others by first name without any titles; however Arabians prefer to be called by their full name prefixing their title like Sheikh or Hajji. While exchanging business cards, Arabians expect English on one side and Arabian on the other side, and my advice to my client is to keep the Arabic side up when offering a card. It is also Arabian custom to give the card with both hands and my client should take some time to read the card which he is offered before placing it in the card holder. Most Saudi Arabian men tend to stand physically very close to each other while talking and can also make physical contact to emphasize some points. Although this can be a discomfort for my American client I will suggest him not to draw back as it will be considered as rejection and Arabians hold respect in high esteem. Moreover, the Arabians do not consider it polite if the speaker gesticulates wildly with his/her hands (Fox, 291). Also, my client should never consult his watch while talking to an Arabian business associate as it indicates disinterest (Fox, 293). Normal business hours In Saudi Arabia, meetings are usually held in the morning with appointments compulsory. However, my client needs to remember that he will have to wait till reaching the country before scheduling a meeting. Moreover, Muslims avoid meetings on religious holidays and also my client should never schedule a meeting on Friday since it is a rest day in the country. It is no good expecting punctuality in meetings since often the host may arrive an hour or more late for the meeting. Decision making style The decision making process for Arabians can be delayed due to lengthy discussions and overwhelming number of arguments. It is also highly possible that decisions cannot be taken in a single meeting and my client should be prepared for delay by weeks or months. Moreover, decisions are generally taken by someone who mostly remains silent during the meeting as it indicates contemplation (Fox, 292). Women in business In Saudi Arabia, women are discouraged to do business since they are not expected to communicate directly with men. While Western women are accepted in a less conservative manner, Arabian women need to wear appropriate clothing. English in business Traditionally, many Saudi Arabians have travelled to western countries for business and trade. Therefore, they are generally fluent in English. Therefore, my client can speak in English without reservations, but it is wise to learn some Arabic greetings. Gift giving Although gift giving is customary in Middle Eastern countries, the same is generally not true in Saudi Arabia. Arabians prefer to give or receive gifts in social setting rather than business setting. Moreover, I will advice my client to offer a gift of equal value and quality to anyone from whom he has already received a gift. There are several things which should never be included as gift like alcohol, picture of animals, anything made of pigskin. Also, my client should never give any gift to an Arabian’s wife (Fox, 293). Hofstede’s Dimensions of Culture Hofstede has stated that any country’s culture has four dimensions – power distance, individualism vs. collectivism, masculinity vs. femininity, and uncertainty avoidance. Power distance means low ranking members of a business accept that unequal distribution of power is part of their culture. In this context, Saudi Arabia ranks 80 while US ranks 40 (Cassell & Blake, 153). High rank indicates high level of inequality of wealth and power in the society. Americans’ tendency of open communication regarding decision making irrespective of rank within a company (O’Keefe, 617) is not acceptable in Arabian culture. For Arabians status of a person is more important than his talent and so they first assess the key players in an organization before entering into a business relationship. In the context of individualism vs. collectivism, Saudi Arabia ranks 38 which mean they have a cohesive culture where loyalty is most emphasized while US ranks 91 as they give importance to individual achievement (Cassell & Blake, 154). Arabians stress on collective decisions as opposed to Americans trusting individual initiative. For this reason, Arabians take a long time in decision making which may often be delayed for weeks or months. In the context of masculinity vs. femininity high rank indicates the country has masculine culture. Thus Saudi Arabians with a ranking of 52 value good relationship with supervisors while US with a ranking of 62 give more importance to opportunity (Cassell & Blake, 155). The major conflict that can arise for my client in this regard is that Arabians tend to involve family members in business for increased income. However, Americans do not advocate nepotism as for them skills and talent are more important (O’Keefe, 619). Finally, uncertainty avoidance ranking is 68 for Saudi Arabia and 46 for the US. With higher rank, Arabians exhibit less tolerance for uncertain or ambiguous conditions by implementing rigid rules and regulations, and with lower rank Americans show more openness towards contrary opinions (Cassell & Blake, 156). For Arabians it is important to establish mutual trust before making any decisions, and therefore they oppose the idea of Americans that time should be used economically for making any business decision. My client may consider Arabians less serious about business due to their flexible way of using time, and also because they tend to focus on multiple things simultaneously which makes them seem less focused. Conclusion As a conservative culture, Saudi Arabians value traditions and relationships. This is evident in their business practices with more dependence on group activities than individual efforts, and less prone to accept challenges. Such business norms are reflected in Hofstede’s theory, and it has been used in this paper to understand the cultural differences between Saudi Arabia and America. Saudi Arabia is a country where there is immense opportunity for business, and to take this advantage Americans need to work together with Arabians by accepting the cultural differences. References Cassell, Macgorine A. & Blake, Rebecca J. “Analysis of Hofstede’s 5-D Model: The Implications of Conducting Business in Saudi Arabia”, International Journal of Management & Information Systems, 16.2 (2012) 151-160 Doole, Isobel & Lowe, Robin. International Marketing Strategy: Analysis, Development and Implementation, Cengage Learning, 2008 Fox, Sue. Business Etiquette for Dummies, John Wiley & Sons, 2011 O’Keefe, Hsu “Business Behaviors in Brazil and USA: Understanding the Gaps”, International Journal of Social Economics, 31.5/6 (2004) 614-622 Shoult, Anthony. Doing Business with Saudi Arabia, GMB Publishing, 2006 Read More