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International business practices in saudi arabia


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International business practices in saudi arabia

  1. 1. International Business Practices in Saudi Arabia: Cultural effect Salem M. Al-Ghamdi Associate Professor of Management and Assistant Dean of CIM Graduate Programs January 2008
  2. 2. High and low context cultures <ul><li>High context </li></ul><ul><li>Information resides in context </li></ul><ul><li>Emphasis on background, basic values </li></ul><ul><li>Less emphasis on legal paperwork </li></ul><ul><li>Focus on personal negotiation </li></ul><ul><li>Low context </li></ul><ul><li>Messages are explicit and specific </li></ul><ul><li>Words carry all information </li></ul><ul><li>Reliance on legal paperwork </li></ul><ul><li>Focus on non-personal documentation of credibility </li></ul>Saudi Arabia, Japan USA, Germany, Switzerland
  3. 3. Cultural Features of Saudi Society <ul><li>Confrontation and conflict are to be avoided “The concept of face is a fundamental issue of Daily Life”; </li></ul><ul><li>Compromise, patience and self-control is a means by which to safe face; </li></ul><ul><li>Dignity and respect are key elements in S.A. culture. </li></ul><ul><li>Conclusion: Saudi Arabian counterpart will not take well to pressure tactics that place them in an uncomfortable positions, thus forcing them to lose face. </li></ul>
  4. 4. Cultural Features of Saudi Society <ul><li>Islam as a religion has an extensive influence on Saudi society; </li></ul><ul><li>Arabian culture is often described as detail orientated; </li></ul><ul><li>Ethics and expected social behavior such as generosity, respect, and solidarity are emphasized. </li></ul><ul><li>Conclusion: Understanding Islam, which governs every respect of a Muslim’s life, shall enhances how and why Saudi business people act or behave in certain manner. </li></ul>
  5. 5. Cultural Features of Saudi Society <ul><li>Saudi Arabia is considered a high context communication; </li></ul><ul><li>Saudi Arabia culture relies heavily on non-direct communication cues such as body language and eye-contact, tone of voice, facial cues, and the use of silence. </li></ul><ul><li>Conclusion: It is vital to be aware of these non-verbal aspects of communication in any business meetings in order to avoid misunderstandings. </li></ul>
  6. 6. Cultural Features of Saudi Society <ul><li>Understanding of Saudi etiquette and the personal manner in which business is conducted is essential to success; </li></ul><ul><li>Business appointments, for example, is unique in S.A. appointments should be scheduled in accordance with the five daily prayer times and the religious holidays of Ramadan and Hajj; </li></ul><ul><li>It is customary to make advance appointments for times of day rather than precise hours as the relaxed and hospitable nature of Saudi business culture may cause delays in schedule. </li></ul><ul><li>Conclusion: Working practices in Saudi Arabia are heavily influenced by culture. </li></ul>
  7. 7. Cultural Features of Saudi Society <ul><li>The Saudi working week begins on Saturday and ends on Wednesday. Thursday and Friday are the official weekend; </li></ul><ul><li>Office hours tend to be 0900-1300 and 1600-2000 (Ramadan 2000-0100) with some regional variation; </li></ul><ul><li>There exists a distinct dichotomy between subordinates and managers within S.A. companies; </li></ul><ul><li>Age plays a significant part in the culture of S.A. greater respect must be shown to elders and all times. </li></ul><ul><li>Conclusion: When first entering the room or greeting your Saudi counterparts for the first time, you should shake hands with the most senior person first. </li></ul>
  8. 8. Cultural Features of Saudi Society <ul><li>Establishing trust is an essential part of Saudi business culture; </li></ul><ul><li>Cultivating solid business relationships before entering into business dealings is key to your success; </li></ul><ul><li>In a business setting, favors based on mutual benefit trust are ways of enhancing these cultural values; </li></ul><ul><li>Due to the personal nature of business in Saudi Arabia, family influence and personal connections often take precedence over other governing factors. </li></ul><ul><li>Conclusion: When entering a meeting, general introduction will begin with a handshake. We should greet each of our Saudi counterparts individually (saying A-salaam alaikum), making on way around the room in anti-clockwise direction </li></ul>
  9. 9. Cultural Features of Saudi Society <ul><li>It is generally uncommon for a Muslim man to shake hands with a woman. Therefore, it is advisable for business women to wait for a man to offer his hand first; </li></ul><ul><li>Business cards are common but not essential to Saudi Arabia business culture. However, if used locally, ensure that you have the information printed in both English and Arabic; </li></ul><ul><li>Gift giving in Saudi Arabia is appreciated but not necessary; </li></ul><ul><li>It is also advised to refrain from overly admiring an item belonging to another, as they may feel obliged to give it to you; </li></ul><ul><li>Initial business meeting are often a way to become acquainted with your prospective counterparts. They are generally long in duration and business are conducted at a leisurely pace over tea and coffee; </li></ul><ul><li>In the event that you are offered a gift, it is considered impolite and offensive if you do not accept it. </li></ul>
  10. 10. Sociological and Religious points of view of cultural features of Saudi Society <ul><li>Islam plays a large role in the people’s lives; </li></ul><ul><li>Large power distance and uncertainty avoidance are the predominant characteristics for this region; </li></ul><ul><li>The society is highly role-oriented with laws, rules and regulations; </li></ul><ul><li>Inequalities of power and wealth have been allowed to grow within the society; </li></ul><ul><li>As a result of this high uncertainty avoidance characteristics, the society does not readily accept change and is very risk adverse; </li></ul><ul><li>Saudi society is a collective society and is manifested in a close long-term commitment to the member “group”. </li></ul>
  11. 11. Media Decisions – Saudi Arabia <ul><li>Use of comparative advertising claims is prohibited; </li></ul><ul><li>Non-censored films cannot be advertised; </li></ul><ul><li>Women may only appear in those commercials that related to family affairs, and their appearance must be in a decent manner that ensures feminine dignity; </li></ul><ul><li>Women must wear a long suitable dress which fully covers her body except face and palms. </li></ul>
  12. 12. Thank you.