The Difference between Business Culture in Saudi Arabia and UK - Coursework Example

School: Topic: presented: Introduction Saudi Arabia is a South-west Asian kingdom in which Islam is the predominant religion. The Saudi Monarchy that was established in 1992 uses the Sharia law to govern the country, and the Quran is entrenched inn the constitution. Entry and exit of foreigners in the kingdom is monitored by the government, and the Islamic laws have to be adhered to regardless of one’s religious background. Governance is authoritative and all aspects of the law are utilized, including business, inter-personal relations, conduct and observance of personal hygiene among other issues. Crimes are punishable depending on their gravity, and the country is among those that apply capital punishment. In spite of bureaucracy in the management of national affairs, the government has realized the significance of new public management especially as the developed countries continue advancing in technology, which is also useful to the country for improvement in production. Technology is helping the country to accomplish its development goals. Relaxation of trade barriers has been a major development in encouraging foreign investment. The country is collaborating with foreign governments to accomplish its economic goals through favorable business policies. However, restraints are pronounced especially in business, which is attributed to the country’s culture. This paper presents a description of the business culture in Saudi Arabia, and also compares it with that of the business culture of the United Kingdom. The aspects of Islamic culture in business have been discussed, as well as the manner in which rapid developments affect the country’s business culture. The paper also highlights the significance of understanding the business cultures of the two countries as well as the differences that exist. Business Culture in Saudi Arabia vs. United Kingdom The Saudi business people are used to conducting business while engaging in a social mood. Business talks may be conducted while the parties involved are in a relaxed mood such as while taking coffee (The Saudi Network, 2009). In many situations, business matters are considered personal and due to the culture of uncertainty avoidance, the business people tend to restrain from making serious arrangements when the potential partner or client has not managed to get in to the country. It is considered a risk especially when money is involved. The Saudis are therefore comfortable while dealing with a client face to face. Moreover, the foreigner has to confirm about the travel arrangements to ensure that there are no hindrances in the travel plans. These efforts are usually meant to enhance punctuality in business meetings. Similarly, punctuality in the United Kingdom is emphasized in business meetings. Michael (2009) observes that it is recommended for the visitor to confirm attendance some time before the meetings. The Agenda in both cultures has to be clearly defined and each party is required to have highlights of what is to be discussed. The Saudis and the British Business men tend to establish a cordial relationship to know the business partner well since they feel comfortable dealing with a person whom they understand well before engaging in a negotiation. It is expected in both cultures that the business people greet each other by hand shake, while the business dresses are conservatively defined whereby the British business men have to be in a suit while the women may choose to wear a dress that is defined for meetings. However, the Saudi women are not involved in business and are mainly expected to wear dresses that expose minimal parts of their face and hands. They rarely engage in conversations with men, which is a major challenge for doing business involving women in the country (The Saudi Network, 2009). Use of Islamic Culture in Saudi Arabia’s business A major difference between the cultures that affects business is the integration of religious matters in Saudi business. The daily prayers for Islam are especially a chief aspect that should be taken in to consideration when making business arrangements. They are also keen on the religious holidays. Some of the social drinks such as alcohol are illegal in the Kingdom and foreigners are required to understand that they can not be used in business negotiations. Moreover, trading in the anti-social products may jeopardize the relationship between a foreign business man and the government. All the day to day operations have to conform to the Islamic religion. For example pork may not be used or it can lead to disagreements between Muslims and the foreign business people (McSnackins, 2010). It is important for a foreigner to understand the religious differences to ensure that the choice of business is in line with the Sharia law. Government business in the country is run according to the Islamic calendar (Rice, 1999). The Saudis observe the Sharia law in banking whereby Islamic banking applies to all Muslim business people. According to Banaji (2007), Islamic economics guides the way in which banking activities are carried out in the Kingdom of Saudi Arabia. For example, according to the Sharia law, lenders are not supposed to charge interest to the borrowers of loans. On the other hand, those who deposit their money should not expect interest for their money. However, this practice is diminishing as a result of the quest to remain at per with the thriving world economies. Interest from loans is a major source of income for banks, which contribute greatly to economic growth. Without the application of interest rates in the economy, there is a possibility of dormancy in the economic sector. However, adjusting the Sharia law is a long process and it may take many years for Islamic banks to achieve economic growth (Kuran, 2005). How Fast Development in Saudi Arabia Affects the Business Culture The conventional arrangements in the community of Saudi Arabia tended to be highly conservative whereby many aspects of their lives exhibited the traditional beliefs and customs. For example, foods from non-Saudis could not be consumed locally and therefore there was no room for Western foods in the country. The manner of dressing in the past was clearly defined and was in line with the Sharia law. Clothes with a western design or manufactured by an industry that is affiliated to an international trademark. As Buchele (2008) observes, societies are continuously being transformed in to adopting new ideas through globalization. With increased growth in the international business, it has become necessary for the management in many organizations to relax trade barriers to benefit from the globalization of technology and other aspects of development. Saudi Arabia is one of the economies that have found it useful to cooperate with other nations including the West to boost their economic development goals (Long, 2005). Globalization has led to new developments among the Saudi’s in regard to the manner of dress as well as the food they eat. Eating fast foods in restaurants instead of the conventional traditional meals is a major change that has also made the country’s business culture more accommodative to foreigners. The people are also engaging in a number of businesses with foreigners, leading to the elimination of barriers that hindered the use of western products such as clothes (Hughes, 2003). The fast development requires partnerships to enhance accomplishment of development goals. The Sharia laws concerning trade and banking have also been relaxed to allow the introduction of the normal banking system that operates through interest rates. This has resulted in dual banking whereby the new banking system in the country operates along with Islamic banks. This change in business culture has allowed new investors to introduce their capital in the economy through establishment of regular banks and other non-Islamic micro-finance institutions (Mead, 2008). Significance of understanding the two Business Cultures and their Differences It is important for professionals in Business Management to learn diverse business cultures that affect investment in various countries globally. Such knowledge equips them to plan ahead when engaging in foreign investment, and to cope with the challenges that may emanate from the cultural differences. Learning the business culture of Saudi Arabia and the UK is significant in determining the core factors that have been hindering or supportive to business between the two nations. Moreover, there is high potential for business especially due to the fact that Saudi Arabia is gradually relaxing the Islamic laws that might have hindered business with foreigners. Understanding the differences will enable the business people to appreciate cultural diversity, respect each other’s culture and to maintain harmonious relations that are vital for the accomplishment of business goals. Conclusion Business culture is a significant determinant of the success of business between countries, especially when there are major differences such as those between Saudi Arabia and the UK. There are various similarities and differences in the business culture between the two countries. Most of the difficulties that hinder business usually originate from the integration of the Islamic laws in the Saudi business, which make it difficult for other nations such as the UK to venture in to the Saudi business. However, fast developments in Saudi Arabia have affected the business culture, and most of the Sharia laws have been relaxed to encourage foreign investment in the economy such as in the banking sector whereby foreign micro-finance institutions and regular banks are being operated along with the conventional Islamic banks. References Banaji, J. 2007. “Islam, the Mediterranean and the rise of capitalism”, Historical Materialism, Vol. 15, 1 pp. 47–74 Buchele, N. 2008. Saudi Arabia - Culture Smart! The essential guide to customs & culture, Kuperard Hughes, R. 2003. Living & Working in the Gulf States & Saudi Arabia, Survival Books, Ltd. Kuran, T. 2005. “The Absence of the Corporation in Islamic Law: Origins and Persistence”, American Journal of Comparative Law 53, pp. 785–834 Long, D. E. 2005. Culture and Customs of Saudi Arabia: Culture and Customs of the Middle East, Greenwood Press McSnackins, C. 2010. Doing business in Saudi Arabia: Food and eating etiquette, viewed on, 21st Feb. 2010 at, Mead, A. 2008. Saudi Arabia: The Business Traveler’s Handbook, Interlink Publishing Group Michael, M. 2009. Islamic Capital Markets and Risk Management. London: Risk Books Rice, G. 1999. Islamic Ethics and the Implications for Business. Journal of Business Ethics, Vol. 18, 4 pp 345-358 The Saudi Network 2009, Business and Social Customs in Saudi Arabia, viewed on 21st Feb. 2010 at, Read More