Business Culture in Saudi Arabia Essay Sample

Business Culture in Saudi Arabia Pages
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Introduction

At the beginning of the twenty-first century, the vision of a global village is no longer considered an abstract idea but a virtual certainty. Technological and sociopolitical changes have made the world a smaller planet. Accordingly understanding between different cultures begins to play a more and more important role in the present-day world. Being a natural phenomenon, cultural conflicts are to be solved and people of different cultures are to co-exist peacefully. Saudi Arabia and Singapore may differ wildly in culture, nationalities, and ethnicities, but globalization brings them together. Only through understanding of culture differences can business purpose be achieved. This papers provides insights into Saudi Arabian culture by using Hofstede’s cultural dimensions with comparison to Singapore. 1. The advantage of geographical position and trade range of Saudi Arabia This paper chooses Saudi Arabia as a entry point for study because of its unique geographical position and its special culture which may cause problems in business.

Saudi Arabia serves as a joint for Asia, Europe and Africa. It is located at the Arabia Peninsula in southwest Asia, facing a Bay at east, and Red Sea west, bordering Jordan, Iraq, Kuwait, UAE, Oman, Yemen and other countries. Saudi Arabia is be worthy of the name of the “oil kingdom”, oil reserves and output ranked first in the world, making it one of the richest countries in the world. Saudi Arabia is the world’s largest producer of desalinated water, the desalination water accounts for about 21% of the world’s total. Saudi Arabia implements liberal economy policy. Its oil and petrochemical industry is the economic lifeline. At present, the Saudi government is encouraging the development of private economy, and reduces dependence on exports of oil. It hopes to provide more employment opportunities for the rapid growth of the population. Saudi Arabia also uses a large number of migrant workers. The tourist industry is relatively developed.

2. Characteristics of the commercial culture of Saudi Arabia from the perspectives of Hofstede’s cultural dimensions As we all know, different countries have different cultures. ‘Culture is the collective programming of the mind which distinguishes the members of one category of people from another.’ (Hofstede, 1991) There are four cultural dimensions that were defined in Hofstede’s research: Power distance, Uncertainty avoidance, Individualism, Masculinity, and recently Hofstede add one more: long-term-short-term orientation. In this part of paper, comparison between Singapore and Saudi Arabia will be discussed, by focusing Hofstede’s cultural dimensions as a point of reference 2.1 The dimension of individualism-collectivism

We know that there is a diverse population in Singapore, consisting mainly of Chinese, Malay and Indians, all of which does not possess one single dominant national identity. Drawing on a variety of traditions, different ethnic groups all consider themselves important parts of the diverse society of Singapore. However, In the Saudi Arabia society, most people believe in Islam, and religious control of Islam and its influence on the country are political, economical and can be seen in people’s daily life. Neglecting of religion may cause troubles in business activities. In Islam canon, the most important are: religious service, almsgiving, fasting and pilgrimage and other activities. Religious service is a ceremony that shows gratitude, respect and obedience to Allah.

People generally do religious service five times a day: every time before and after sunrise, noon time, each time before and after sunset. If you happen to talk business with the Saudi Arabian in religious service time, he would suspend negotiations, leaving you and to do that. Almsgiving is also called donations, claiming that the wealthy should donate some property to poor people. Fasting means no food. According to the Islamic canon, Saudi Arabian should fast at the beginning of the lunar calendar in September to the end of September–a full month of Ramadan. Fasting means from sunrise to sunset you are not supposed to eat anything. If you visit someone or try to sell something to them, there will be a lot of inconvenience. The pilgrimage means going to Mecca in Saudi Arabia to worship. It stands for the Islamists’ remembrance of ancestors, enhancing solidarity and friendship. All people who went to Mecca for pilgrimage will be universally respected. The Hajj is a year for business; many families will buy the necessities of life in this time. In conclusion, Saudi Arabia is much more of collectivism while Singapore is of individualism. 2.2 The dimension of uncertain avoidance

We also know that in Singapore, normal business attire consists of dark trousers, long-sleeved shirts and ties for men, and blouses, skirts or trousers for women. Due to the hot and humid weather, jackets are not usually required. Although Singapore is a liberal country, women should make sure they do not wear clothes that are too revealing. But in Saudi Arabia, dressing is much more complicated. For example: women have to wear veils in public places, and she need to be accompanied by her husband or brother when out of town. No Saudi Arabian eats pork or drink alcohol. And there are special “Culture” police, to restrain people’s behavior according to Islamic law. If you violated, you could face imprisonment even you are a foreigner. Therefore, we can easily come to the conclusion that in this Singapore culture, being fuzzy can be tolerated. Uncertainty as a characteristic of life is accepted. But Saudi Arabia has a relatively strong uncertainty aversion culture. Organization in Saudi Arabia will attempt to take control all the uncertainty and risk, like the Islamic rule and the” Culture” police. They want to make the situation more predictable. They also try to guarantee safety of religion and tradition by developing more formal rules, rejecting deviant views and behavior. Saudi Arabian believes in absolute loyalty and Islamic knowledge to avoid any unpredictable situation. 2.3 The dimension of masculinity-femininity

Daily schedule in Saudi Arabia is also very different from Singapore. Punctuality is important so effort should be made to arrive on time. Normal business hours are between 9 a.m. and 5 p.m. with one hour for lunch, Monday to Friday. Some offices will open for a half-day on Saturdays, typically in the morning. But here in Saudi Arabia, most people and companies are still working on Saturday and Sundays. They rest on Friday. Weekend begins from Thursday afternoon. If you should do business with the Saudi Arabian you should choose Monday to Thursday as much as possible, rather than reply to their letter on Thursday afternoon or Friday. You should especially pay attention to calls on Thursday. Because unless be timely treatment, it will cause 3~ 4 days’ delay, wasting good business opportunities. Another thing you should know is that Saudi Arabian have a very weak sense of time.

If you want to do business with the Saudi Arabian, you must have enough patience and try to lower your expectation of their being punctual. For example, if you arranged a commercial negotiation with them, the person you want to see may be late, even for more than half an hour. In addition, they’ll also arrange several events, and delay trade negotiations. From above statements, it can be concluded that Saudi Arabian is a more man-oriented society since most of them are too confident to be punctual and like entertainment activities. But Singapore’s culture may also show a lot of signs of man-oriented society. So in this case, they are of the same type but Saudi Arabia is much more obvious than Singapore. 3. Key pointers and recommendations for you when doing business with Saudi Arabian 3.1 Nepotism for our unified price

Nepotism is very common for people in the Saudi Arabian Industry. It often happens that brothers, father and son are engaged in the same trade activities. So when we signed the contract one company of them, the price will be known by other relatives. And these relative companies will require transactions at the same price with us. They even introduce to their relatives to make order. 3.2 They will raise questions about quality to force you to cut the price in first stage of negotiation. People in the Saudi Arabia are very good at taking advantage of first stage of negotiations to create atmosphere where you think you owe them. In order to achieve the purpose of negotiation of price, some people in the Saudi Arabia grasped deep understand the characteristics of your products, such as price, quality. And when negotiation starts, they will complain about some problems, for example, they will say that your last delivery is a little late or some of products are damaged. The purpose is not to claim the loss, but to cut price. If your negotiators are a novice, it is easy to for him to have mental tension, even feel ashamed in front of them. Inadvertently cut your prices. 3.3 Make full use of enterprise competition

Some people in the Saudi Arabia are very good at using the seller competition to achieve price objective. For example, in a trade fair where hundreds of similar suppliers gather, people from Saudi Arabia will inquiry each offer and make price comparison. Then they will firstly sign contract with suppliers who offer a lower price but only pay a small number of deposit. After that, they intentionally disclose the price in the contract to other suppliers. If other suppliers have little negotiation experience they will believe products of other companies are on sale and will cut price to make contract with Saudi Arabian. 3.4 Final bargaining before signing the contract for a lower price. The Saudi Arabia will seize every opportunity for bargaining. Sometimes, in the final stages of negotiations, the seller think he negotiations have entered the end, and parties have agreed, on main conditions of trading drafted in the contract. the buyer from Saudi Arabia may suddenly proposed the seller to make final 1%~2% discount or a few hundred dollars concessions. 3.5 Dislike abstract description

The Saudi Arabia businessman advocates the traditional trade mode. They don’t accept the abstract description. They identify simple and direct thinking process, so if you rely on the sample and the specifications of the products it is very difficult to deal with the Saudi Arabia businessmen. 4Conclusions

By applying Hofstede’s and Bond’s cultural dimensions, a cultural comparison between Saudi Arabia and Singapore is made. The two countries differ greatly in nearly all the aspects. Based on the cultural differences, we should have learned more about how to do business with Saudi Arabian and more importantly, we develop a sense of cross culture. By learning differences among countries we see things from a global view.

References

[1]Aguinis Herman: 2002. Search for Universals in Cross-Cultural Organizational Behavior. Chapter to appear in J Greenberg (ed), Organizational Behavior: The state of the science (2nd ed) Mahwah, NJ: Lawrence Erlbaum Associates. [2]Bond M and G Hofstede: 1989. The cash value of Confucian values, Human System Management, 8, pp 195-200. [3]Chang SJ: 1995. International expansion strategy of Japanese firms: Capability building through sequential entry. Academy of Management Journal, 38 (2), pp 383-407.

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