Conducting Business in France and Saudi - Research Paper Example

Comparing Conducting Business in France and Saudi Chapter Introduction If you happen to be reading this book then you have read The Golden Book, a book targeted to all entrepreneurs regardless of geographic location. In this work, we have a look a business between France and Saudi Arabia. Cultural interactions will be among the key issues discussed besides both countries’ histories, business etiquettes and a basic description of both societies. The research identifies the stereotypes attached to the French and Saudis that may influence interactions and how they can be overwritten. Cross cultural interactions require prior information about the visiting parties to avoid collision unnecessarily. All information is well documented to enhance a proper understanding of either participant. Chapter 2 Introduction to France History In May 2012, the presidential elections saw Socialist François Hollande as the new president after winning the National Assembly’s Control. By October the following year, not more than a third of the population approved of the president’s performance economically. Besides being a top recipient in market distortion’s agricultural subsidies covered under the European Union, France has diversified economy. Unemployment is a major challenge whereas union strikes are a common problem. By May 2013, after four years, the country had sunk to a second recession. Take this year, for instance, France’s freedom score stood at 63.5 earning it the 70th position in the freest index. Factors such as reduced monetary freedom, business freedom and financial freedom are the main causal factors to reduced overall score way below the set regional average. Under the past 20 years of France’s index, the freedom in economy has been stagnant. This titles it as the fifth worst performing economy among the economies of advanced nations. Although there are notable improvements in market openness and property rights, the economic freedom is destabilized by declines of 10 scores each from corruption freedom, government spending and fiscal freedom. In the economic history of the country, France rates as moderately free economy though went into bad books of mostly unfree nation between the years 1997 to 2003. The French government holds larger share holding in the economies that they dominate. Over half of the country’s Gross Domestic Product is accounted for by the government spending. The move to attempt and reach a flexible and competitive has been slow after the government has improvised measures to raise both. There is a great benefit for business start ups. The process is straight forward and no minimum capital is required. Stagnation is high in the labor market. Most services and products are affected by state subsidies and price controls in the Hollande government. Business investments in a number of companies are harshly screened to keep off foreigners. The music and film industry is among them where films and music from foreign countries do not enjoy freedom. The financial docket is under constant and relatively harsh state influence. In the banking sector, very few foreign banks have rights to operate in the land. Society and culture The French people are known to adhere to firm and homogeneous collection of values. France cherishes their history, culture, cuisines and language. This is considered as their art. They are and have been the world’s models of food, wine, art, architecture, and fashion. The French embrace, new ideas, novelty and manners enthusiastically, provided elegance is among them. Passion for food is incomparable to any other country. It involves procedural preparation, high refining, details attention and fresh ingredients. Business etiquette Professionalism is crucial and key for foreigners’ acceptance and it is highly regarded. The country has a well educated labor force that is highly skilled. Hard workers are greatly admired unlike work holism. Time management and time keeping can never be compromised, punctuality is always appreciated. Foreigners and France’s citizens are fond of providing their business credentials such as business cards to secretaries or receptionists among arrival for business transactions. They appreciate where positions are indicated or degrees to ease decisions of how to refer to each other with etiquette. Interpreters may be necessary especially where the host might not have the command of the visitor’s language, confirm the need for one before arrival. Unless the visitor is eloquent in French, both parties are advised to use their common language where an interpreter is not required, but always use French during salutation, occasional phrases and toasts. Given that the government has major regulations in business, seeking advice from bankers, agents or lawyers is recommended to surpass the regulatory obstacles. All business people tend are conservative and extremely formal, relationships in businesses are orderly professional and proper. French discourage meddling in their private lives in business environments. Business actualization is known to be very quick among the French but slow decision making precedes due to intense deliberation. French institutions are greatly centralized under powerful executives and are often authoritative or dictatorial. Given the county’s top rank in economic planning, all plans are detailed and far-reached. Detailed agendas are key formats to establish business and investment meetings. France citizens disregard debates and disagreements in the public domains although the price controlled debates where informed rebuttals are appreciated. The importance of business meetings is to coordinate, clarify and brief matters at hand, intentions must be stated openly and directly. They advocate for clear, informative, formal presentation, rational, well-written intellectually appealing and well deigned presentations. They despise hard selling approaches. Networked rapports, alliances and personal relationships are the driving forces of doing business. Be conscious of their respect for August, Easter and Christmas celebrations, avoid scheduling business meetings around this time. Avoid home calls unless for emergency cases in businesses. Chapter 3 Introduction to Saudi Arabia History Saudi Arabia is ruled by a king, Abdallah bin A. Aziz Al Saud, and is an absolute monarchy. Arab Spring pre-reforms’ protest in 2011 gathered a small cloud outside east Saudi, Shia’s minority most concentrated area. Most Sunnis were unaffected by this move to raise economic handout and their king’s promises of their political involvement. As a leading exporter and oil producer, the country dominates the organizations involved in petroleum export. In 2005, the country became part of World Trade Organization as an effort aimed at promoting economic diversification and foreign investment. On the freedom index, the nation ranks 77th as at 2014, 1.6 improvement to the previous year. This indicates the improvements and growth in government spending controls, monetary and labor freedom that out does its cumulative scores’ reduction in business and trade freedom. Its average is above the global standards. Economic freedom has declined by approximately 6.1 points since its index grading in 1996. There are double digit substantial reduction in freedom from corruption, entire regulatory efficiency and property rights. History has seen Saudi Arabia ranked as moderately free through a period of 19 years from the index. Institutional shortcomings are the main constraints to the entire economy of the kingdom. Scores in property rights are lower than the global average. Business incorporation is defined by nine processes from an average of three weeks with guaranteed minimum capital requirement. Business permit costs are approximately a quarter against the annual income average. Saudiisation is enforced for new employment quota systems, non mandated minimum requirement wage. It is in a way true that state owned enterprises and and government subsidies are the main sources of distortion in the economy. Similar to the French government, Saudi Arabia limits foreign investments in a number of its sectors. Reforms in the financial sector have seen through easing of potential investment to offer financial services. The Saudi government still holds majority of the shares in most and largest bank whilst offering subsidized crediting to the government’s preferred sectors. Saudi Society and Culture The official language in Saudi Arabia is Arabic; however, English is also substantially rooted. English is Arabia’s second and compulsory language in institutions and is highly common in business environments. Other languages such as Pakistan’s Urdu among other Asian languages are common. Saudis are governed from practicing Islam in their political, legal, economic and personal lives. Their guidance is mostly drawn from their religion. Saudis are very prayerful and thus times as, dawn, noon, in the afternoon, sunsets and evenings should be kept off during scheduling of business meetings. Check the local time listing in the local newspapers to confirm their local prayer hours. Fridays are sacred among them and all is halted and some do it on Thursday to extending their weekend to Friday. Ramadan is a holly month for all Muslims where they fast from dawn through dusk with only six working hours to consider. At these times they do not eat smoke, drink or chew even a gum. However, unlike the rest, expatriates do not fast but they should not do what is prohibited above in public places. Generally, everything slows down during this period with business operations limiting their schedules, opening and closing hours tend to be irregular. Business etiquette Before and after the onset of a business meeting men shake hands and kisses are extended to good friends only to the cheek, women do it through hugs and kisses depending on the friendship. Greetings are limited in public amongst men and women outside the family. Greetings take up some of the time in conversations about general issues. Arab etiquette tips should see you through from the beginning to the end of a business proposal meeting. This convinces the potential Saudi partner of the understanding, respect and awareness of their culture. Assalamo Alaikum, is a type of greeting meant to replace terms such as good morning or hello. The phrase Assalamo Alaikum, can be translated as a wish peace upon them and blessings from God. This greeting is very common from the traditional Islamic community that is borrowed into this age. Given the value and principles accorded to order and structuring, it is imperative to ensure submission of neatly designed plans in any business meetings. Agendas also auger well in these meeting on distribution to the potential partners where creating, supporting and announcement of the visiting potential partner’s plan not only demonstrate business savvy and organization but also the information and respect for the Arabic etiquette in business. Where the partner is not conversant with the Arabic language, hiring an intellectual interpreter for the involved documentation used in the meeting saves the day off some shameful moments. Accurate translations facilitate clear communication amongst the business partners and indicate the willpower to go into business. Chapter 4 Cross cultural interactions Saudis have large families and require consultations before decision making. The French also take longer to deliberate on issues. The cultural interaction don’ts of both the Saudis and the French must be avoided while upholding the dos that enhance the business transaction. They are addressed below. When dealing with Arabs, expect extensions in the meeting schedules which should not find anyone with a surprise. Plan for the rest of the day accordingly, be flexible. Both groups uphold respect and therefore offer a room for smooth negotiations. Once a rapport is established between the partners, the rest will pose little if any difficulty. Arabs regard themselves as business experts while the French are masters of order. A combination that respects the boundaries of these beliefs generates an awesome by-product on a neutral ground. Chapter 5 Case study Conference in April If there was to be a consideration of a business in the month of April, this should not coincide with special or religious days of either party. Where Easter comes late, the meeting ought to be pushed farther to accommodate it. The venue is also very crucial. The both participants should live up to the expectations of the other counting from clothing, timing and meeting procedures. Plans should be brief, respect the ideas presented and argue them out in turns to establish a consensus. Business meeting should be held in quiet places to enhance comfort for both the Saudis and the French. Where menus are availed, choose food that does not provoke the other party. Document every deliberation for reference where follow-up activities may be required before decision making. Respect the conclusions made from either side. Limit the meeting participants to a small number unless if it proves to be very important. Ideas presented serve as a representation of the others prior to in-house meetings on deliberations for the matters raised. Either participant has other businesses to take care of and therefore the choice of meeting hours should be considerable and at strategic locations where chances of traffic interferences are greatly minimized. The host should not depend on the visitor should not expect the visitor to share in the cost of holding the conference unless where generosity is extended. With all this there is no room for failure in the meeting. Direct experiences From an experience in a case study that involved these parties, it was realized that the French feel stronger about their identity and their universality senses. They consider the French first option where the other identities follow. This identity is common on daily basis. An Arab will always be a perfectionist in businesses. This amazing combination of minds seemed to create a legally and borderless situation among the French and therefore boosting understanding. On the lower side, the French are known to posses obvious differences that may affect the daily transaction. This setback can easily be escape through constant meetings where collisions are detected. The identities of the French and Arabs from the Saudi have a mixed chronicle of ethnicity and religion in their relationships, which in the sitting raised tension among the French while avoiding to cross lines. Chapter 6 For the procrastinators; Do’s and Don’ts’ summary In meetings with the French, similar to Saudis, maintain eye contact to show attentiveness. Let the clothes worn rise to the occasion; say tailored pants, skirts and suits. Punctuality is very important and where lateness could not have been avoided, credible explanations are given an ear. Avoid confrontations or signs of impatience, these attitudes portray unprofessionalism. For the corporate manners keep of procedures, rather build relationships show the partners that you are the right person for the deal on the table. Be formal. Establish bureaucratic interests to challenge the deals without invoking need for common sense. Do not threaten. Or mention terms such as, ‘in our country.’ When holding any meeting or occasion, consider the Islam dietary limits; keep off the service of meat, fish, fowl or pork to the potential Arabian business partners. For a restaurant choice to sit business meetings, take time to confirm the availability of vegetarian food options. Refrain from alcoholic drinks, cigarettes or caffeine intake before, and during these meetings as these practices are considered as unrespectable in Islamic culture and therefore override the Arabic business etiquette. Remember to keep off talks that mention their religion. As well, respect their religious hours, days and months. Accord them respect. Although the visitor may be gung ho on an issue, keep in mind that Saudis disregard thumbs up. Where gifts are necessary to create a bond, leave behind paintings and alcohol. The selected individual to conduct a business deal in Saudi Arabia must maintain frequent nods and eye contact with the decision makers. Saudis may have pitches as common gestures although they prefer slow speeches.  Work cited "Business and Social Customs in SaudiArabia." The Saudi Network. The Saudi Network, n.d. Web. . "Business Etiquette." Passport to Trade-A Bridge to Success. European Commission, n.d. Web. . Chauffour, Jean. From political to economic awakening in the Arab world the path of economic integration. Washington, DC: World Bank, 2013. Print. Carroll, Craig E.. Corporate reputation and the news media agenda-setting within business news coverage in developed, emerging, and frontier markets. New York, NY: Routledge, 2011. Print. "Doing Business in France." Kwintessential. Kwintessential, n.d. Web. . France, Bev. Bringing communities together connecting learners with scientists or technologists. Rotterdam: SensePublishers, 2012. Print. "Notes on Saudi Culture, Customs, and Business Etiquette." Export.gov. N.p., n.d. Web. . "SaudiArabia." Culture Crossing. N.p., n.d. Web. . "SaudiArabia - Language, Culture, Customs and Etiquette." Kwintessential. Kwintessential, n.d. Web. Silkenat, James R.. The ABA guide to international business negotiations: a comparison of cross-cultural issues and successful approaches. 3rd ed. Chicago: American Bar Association, Section of International Law, 2009. Print.   Read More