Saudi Arabia Business Ethics - Essay Example

WHAT TOP SALES AND MARKETING EXECUTIVES NEED TO KNOW ABOUT SAUDIS’ CULTURE Introduction This paper aims to investigate the business customs of Saudi Arabia and to create an informative essay in order to train the top sales and marketing executives about these customs and business ethics. This task pertains to inevitable requirement of conducting business globally in which organisations and personnel must learn how to communicate properly with other businesses in a different culture in order to pursue productivity and quality. Considering the reforms in the investment laws in Saudi Arabia in which foreign nationals are allowed to invest, it is interesting to know how culture becomes a fundamental factor in doing business in the Kingdom. It is noteworthy to mention that organisational culture plays a very important role in organisations in the aspect that it can become a strategic resource that leads to sustainable competitive advantage through the promotion of learning, risk taking, and innovation (Blunt, 1991). It is also suggested that organisational culture is linked to performance at the individual level (Scott et al., 2003), thus pointing out on the importance of culture in business transactions. The Importance of Understanding Culture Culture has been described as “the way of life for an entire society” and includes codes of manners, dress, language, religion, rituals, and norms of behaviour such as law and morality as well as systems of belief. Hofstede and Hofstede (2005, p. 4) defines culture as “the collective programming of the mind that distinguishes the members of one group or category of people from others.” Human behaviour is often characterised as complex and unpredictable, adding to the influence of culture on it, which affects how managers work through and with people. Thus, the tasks of the managers influence individual behaviour. A manager who transacts business in a global manner needs to understand the culture of people with whom business is carried out. This indicates the importance of understanding culture as a key factor in competition that relies on knowledge-based assets and processes and depends heavily on learning and innovation (Levitt, 1983). From this standpoint, it is clear that the main target of the organisation today for sustaining organisational success and competitive advantage includes gaining knowledge, skills, and abilities. Additionally, distinctive elements between successful and unsuccessful firms include crucial factors such as the culture, values, attitudes, and commitments of employees and the organisation itself (Piper, 1990). In today’s era of globalisation, the importance of understanding culture becomes crucial in order to establish good ties with other nations in trade and business relations. Thus, we can say that conducting business internationally is almost inevitable in a global work environment of today. We then infer that participating in international business is an unavoidable task for most companies. For this reason, creating and maintaining a strong business environment in a foreign market is no longer an option but is rather a necessity. In the contrary, companies can cost millions by making bad impressions on other cultures. Saudi Arabia is dominated by the social stratification system of ‘caste /tribe’ and legally its citizens are strongly governed by rule-oriented state laws and regulations. Consequently, there is a high PD between the managers and their staff. Most Saudi managers assume domination through execution of power as soon as they are appointed to managerial positions. Hofstede and Hofstede (2004) assert that high PD cultures normally have centralized top-down control while low PD generally ensures greater equality and empowerment. In Saudi Arabia, the use of sabbaticals become a more and more effective means to retain their star performers and counter the effects of job burnout among employees (Carr and Tang, 2005). This implies that the adoption of sabbaticals, which is relative to nurturing culture, can give positive effects on both the organisation and the employees and is currently seen as in consonance with cultural diversity (Tayeb, 1997). It is already a known fact that companies in Saudi Arabia observe Islamic culture for the management of the workforce. How these values are observed is influenced by the national culture of the Kingdom, exhibiting a diverse employee-management relationship (Tayeb, 1997). However, there are said to be highlights and difficulties that tend to isolate the influences of Islam on organisations, such as business imperatives, the economy, and issues of politics, which make it unwise for others to pursue an Islamic HRM model of organisations (Tayeb, 1997). It must be noted that in Saudi Arabia, the Islamic religion is the constitution or law of the land and thus plays a relevant role in organisational functions of firms. Additionally, Ministries with a minister over each, who reports directly to the top, overview the various dimensions of life. Saudi Arabia is all set to providing Saudis with all the luxuries that the wealth from oil revenues can provide without violating the customs and traditions of the Holy Qur’an. Currently, profit loss sharing (PLS), in which two or more transacting parties are engaged in a contractual arrangement that allows them to use their resources in investing in a project to share in profit and loss, dominates the literature in Islamic finance (Dar and Presley, 2000). It is said that PLS is a desirable transaction in Islamic transacting parties, but not in Islamic banking. The Kingdom of Saudi Arabia saw fit to regulate the ownership and management of its banks, which has been initiated by Bahrain in the 1970s as the financial center for the region (Tschoegl, 2002). This in turn, has affected the manner by which internal policies are managed according to the country’s national culture and the foreign banks that invest in the country through its deregulation policies. It is said that individuals in traditional societies like Saudi Arabia tend to follow leaders because of their personal characteristics (charisma) or because of tradition. Since majority of business is conducted through networking, workers in Saudi Arabia view that furthering personal connections is essential to success. “Wasta” is another key concept in Saudi culture embodied in a form of interpersonal reciprocal benefits, which is seen as a force in every significant decision in Arab life. In Saudi Arabia, “Wasta” may be utilised as a form of intercession or mediation and is literally defined in Arabic as ‘connections’ or ‘pull.’ This can be understood as a network of personally defined bonds or set of relationships that people develop in order to secure advantages and is considered a network of elaborate relationships promoting trust and co-operation. In situations where management in particular has to be effectively carried out with and through employees, it is essential that managers possess a basic knowledge on the concepts of behaviour through an understanding of culture. This knowledge can assist management and organisations in taking a lead in global competition. It is noteworthy or mentioning that individuals from different cultures often enter work organisations with different work-related scripts (Stone-Romero et al., 2003). Clearly, demonstrating the similarities and differences between Saudi culture and other cultures is important when pursuing trade and business relations among them since not only is national culture one of the most important factors that influence employee behaviour in the organisation (Romero and Pérez, 2003) but is also a factor in a good relationship in a global scale. The personal, political, and economic lives of Saudis are governed by the Islam religion and it must be acknowledged that Islam stated in Saudi Arabia. The strong influence of Islam on the lives of the people is seen in their obligation to pray 5 times a day which is set at dawn, noon, afternoon, sunset, and evening. The local newspaper normally records the exact time each day. Friday is set as the Muslim holiday wherein all establishments are closed. Several companies do not hold business during Thursday in preparation for Friday (Kwintessential Cross Cultural Solutions, Date Unknown). All Muslims are expected to fast from dawn to duck during Ramadan and only 6 hours per day are they permitted to work. During this period, people are not expected to eat, drink, smoke, or chew gums. The breaking of the fast called “iftar” is celebrated each night at sunset, and continues until dawn. Generally, Ramadan affects the conduct of business of firms and things tend to take place slowly. Businesses normally operate in reduced schedules and shops may open and close at unusual schedule. The importance of family values is seen in nepotism, which is Saudi Arabia is considered a good thing since it is of primary importance to employ people one knows and trusts (Kwintessential Cross Cultural Solutions, Date Unknown). Saudis’ customs in terms of transacting business involves shaking hands, it is normal to see good friends shaking hands and kissing each other on the cheek. Men and women are expected not to greet each other in public. Taking tike and conversing about general things consist of the activities when Saudis greet each other. When entering the country for business purposes, a Saudi sponsor called "Wakeel” is needed to enter the country. The sponsor arranges appointments with proper individuals and acts as an intermediary. There are times that one might feel that his personal space is being violated since Saudis do not require personal space and may thus stand close to another person while conversing. Part of the culture is dressing and presenting oneself well since Saudis tend to judge based on appearances (Kwintessential Cross Cultural Solutions, Date Unknown). In case top sales and marketing executives are to be trained on Saudis’ business culture, it is important that they learn that appointments are necessary and must be made several weeks to one month. However, meeting a government official is different as a firm date would not be made official until the other person has already set foot to the country. Top sales and marketing executives must also know that meetings must be scheduled in the morning as much as possible. It is an accepted custom to keep foreigners waiting, and top sales and marketing executives must understand this, although they should arrive at meetings on time. It is also not an uncommon thing to have a meeting cancelled upon the arrival of the visiting party and must be understood as part of the business culture of Saudi Arabia. Until a relationship of trust id developed, meetings are generally not considered private, which means frequent interruptions during the conversation. Inquiries about health and family are how business meetings start, but inquiring about a Saudi’s wife must not be done (Kwintessential Cross Cultural Solutions, Date Unknown). Conclusion Culture plays a very significant role in the conduct of business of many firms, and likewise governs that of Saudi Arabia. It is said that when pursuing trade and business relations, understanding culture is an essential task and is considered a major factor in global competition. The significance of competitive advantage, organisational productivity, and quality contributes to understanding Saudis’ culture when top sales and marketing executives are to visit the country for business transactions. It is important to know the gestures of people when greeting a business associate, the activities expected from the meeting such as inquiries on heath and family, which does not involve the wife. The likelihood for Saudis to have different business culture must be understood by the visiting top sales and marketing executives in order to do business with them in a workable manner. The political, economic, and cultural lives of Saudis are also shaped by the Islam religion, of which top sales and marketing executives must also have knowledge of in order to grasp the people’s custom more. References Blunt, P. (1991), Organisational culture and development, International Journal of Human Resource Management, 2 (1): 55-71. Carr, A. E. & Tang, L. (2005) Sabbaticals and Employee Motivation: Benefits, Concerns, and Implications. Journal of Education for Business. Vol. 80, No. 3. Dar, H. A. & Presley, J. R. (2000) Islamic Banking: Management and Control Imbalances. Loughborough University. Hofstede, G.H. and Hofstede, G.J. (2005), Cultures and Organisations: Software of the Mind, New York, NY: McGraw-Hill. Kwintessential Cross Cultural Solutions (Date Unknown) Saudi Arabia: Language, Culture, Customs, and etiquette, http://www.kwintessential.co.uk/resources/global-etiquette/saudi-arabia-country-profile.html Date Accessed 3/2/09. Levitt, T. (1983), The globalisation of markets, Harvard Business Review, 61 (3): 92-102. Pieper, R. (1990), Introduction, in R. Pieper (ed.), Human Resource Management: An International Comparison (p. 1-26), Berlin: Walter de Gruyter. Romero, A.J. and Pérez, M. 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