Doing Business in Saudi Arabia


In America, taking Fridays off, pushing back appointments and hesitating to promote your credentials could severely limit a company’s or an individual’s success.

But all three are common in the Arab world, where practices that seem odd to Americans are often business as usual, said Soumaya Khalifa, an Egypt-born diversity consultant specializing in Arabic-speaking countries.

To help people learn to navigate cultural differences in this vitally important region, Ms. Khalifa is teaching an all-day class called “Arab World Insider: Secrets to Successful Business in the Arab World.”

The class will be held at Emory University’s Center for Lifelong Learning on Wednesday, March 25, from 9 a.m.-4 p.m.

To hear Ms. Khalifa tell it, the class couldn’t be more timely.

She cited plentiful natural resources, high per capita incomes and geographic location as some economic advantages that many Arab countries enjoy.

Population doesn’t hurt, either.  With some 280 million people, the Arab world at once represents one of the most misunderstood and promising markets for American goods and services, she said.

“A lot of times when American businesses … send employees and people particularly to the Arab world, they pick the person that is the most successful, the most technically savvy,” Ms. Khalifa said. “And they overlook the culturally literate person, and I think it needs to be a combination of all.”

The Arab world is not monolithic, and the specific experience of doing business will vary from country to country.  But there are commonalities.

Although varying in dialect, the Arabic language is the same, and about 85 percent of the population in the Arab world is Muslim.  The structured religious life often impacts business in ways that Americans might not foresee, Ms. Khalifa said.

For instance, in most cases, don’t expect to set up Friday meetings, she said. Most Muslims go to the mosque for congregational prayer on Fridays, making it a holiday similar to American Sundays.

And don’t be surprised if an Arab client gets up from a meeting and takes a quick break without explanation.  He or she is likely answering the call to prayer, which comes five times a day.

It’s not only religion that could throw a wrench into a deal, Ms. Khalifa said.

She cites the story of an American businessman who lost a million-dollar deal because he told his Arab business partner, “Now I feel better, I’ve heard it straight from the horse’s mouth.”

The Arab partner didn’t get the idiom.

While Americans are known as sticklers for appointments, Arabs and some other cultures consider times as general benchmarks, not hard and fast rules.

This can be “aggravating” to Americans, who are “very much fixed on time,” Ms. Khalifa added.  The key is to remain “patient and resilient and not to take that personally.”

And Arabs generally focus more on the family or the group, in contrast to the American ideals of individual achievement.

“As an American going overseas to the Arab world, talking about me and my accomplishment – that would not necessarily be looked favorably upon,” said Ms. Khalifa, who lives in Peachtree City, an Atlanta suburb.

Perceptions can be vital, she said, in cultures where business is often predicated on personal relationships.

An Arab generally expects to have a friend at the end of a business deal, and a two-hour initial meeting might only include 10 minutes of conversation about business.

“It’s all about building the relationship, knowing the person,” she said.

Doing Business in Saudi Arabia | Saudi Arabian Social and Business Culture

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Doing business in Saudi Arabia

A Saudi Arabian Culture Overview

Official name – Kingdom of Saudi Arabia
Population – 27, 019, 731
note: includes 5,576,076 non-nationals*
Official Language – Arabic
Currency – Saudi riyal (SAR)
Capital city – Riyadh
GDP – purchasing power parity $374 billion*
GDP Per Capita – purchasing power parity $13,800*

Overview

A kingdom founded upon and unified by Islam, Saudi Arabia has fascinated travellers for centuries. From its vast deserts and barren plains emerged the monotheistic religion of Islam, the Arab race, and the country’s distinctive Arab culture. Occupying approximately 80% of the Arabian Peninsula, today this south-west Asian monarchy, rich in Arab and Muslim heritage and characterised by a high degree of cultural homogeneity is home to a plethora of successful, oil-rich cities. A sound knowledge of the Kingdom of Saudi Arabia, and in particular, of the cultural background, is essential to an understanding of the principals which have guided the Kingdom’s business development.
Saudi Arabian culture – Key concepts and values

Face – In a culture where confrontation and conflict are to be avoided, the concept of face is a fundamental issue of daily life. Dignity and respect are key elements in Saudi Arabian culture and saving face, through the use of compromise, patience and self-control is a means by which to maintain these qualities. Arabian culture utilises the concept of face to solve conflicts and avoid embarrassing or discomforting others. In a business context, preventing loss of face is equally important. For instance, your Saudi Arabian counterparts will not take well to pressure that places them in an uncomfortable position which make them lose face.

Islam – In order to comprehend fully the culture of Saudi Arabia one needs to understand the extensive influence of religion on society. The overwhelming majority of the population of Saudi Arabia are Arabs who adhere to the Wahhabi sect of Islam. Islam, which governs every aspect of a Muslim’s life, also permeates every aspect of the Saudi state. As a result, Arabian culture is often described as detail orientated, whereby emphasis is placed on ethics and expected social behaviour such as generosity, respect and solidarity. These are customs and social duties that also infiltrate the Saudi Arabian business world and affect the way Arabs handle business dealings.

High Context Communication – Saudi Arabia is considered a very high context culture. This means that the message people are trying to convey often relies heavily on other communicative cues such as body language and eye-contact rather than direct words. In this respect, people make assumptions about what is not said. In Saudi Arabian culture particular emphasis is placed on tone of voice, the use of silence, facial cues, and body language. It is vital to be aware of these non-verbal aspects of communication in any business setting in order to avoid misunderstandings. For instance, silence is often used for contemplation and you should not feel obliged to speak during these periods.

Doing Business in Saudi Arabia

The historical journey which led to the foundation of the Kingdom of Saudi Arabia was notably one of triumph and misfortune. Prior to the emergence of Islam, the peninsula was divided between various nomadic Arab tribes and subject to invasion from a number of outside cultures. The creation of modern Saudi Arabia dates from 1932 when the late King Abdul Aziz AL-Saud unified the surrounding regions as the Kingdom of Saudi Arabia. To this day the monarchy remains the central institution of the Saudi Arabian Government, governed on the basis of Islamic law (Shari’a). The discovery of oil on March 3rd, 1953 transformed the Kingdom of Saudi Arabia from a purely trade-based economy to the largest exporter of petroleum in the world. This economical revolution paved the way for a greater industrial base and opened up the country to the business world. For those wishing to do business with Saudi Arabia an understanding of Saudi etiquette and the personal manner in which business is conducted is essential to success.

Saudi Arabia Business Part 1 – Working in Saudi Arabia (Pre-departure)

  • Working practices in Saudi Arabia
    • Generally speaking, business appointments in Saudi Arabia are necessary. However, some Saudi business executives and officials may be reluctant to schedule an appointment until after their visitors have arrived. Appointments should be scheduled in accordance with the five daily prayer times and the religious holidays of Ramadan and Hajj. It is customary to make appointments for times of day rather than precise hours as the relaxed and hospitable nature of Saudi business culture may cause delays in schedule.
    • The Saudi working week begins on Saturday and ends on Wednesday. Thursday and Friday are the official days of rest. Office hours tend to be 0900-1300 and 1630-2000 (Ramadan 2000-0100), with some regional variation.
    • The concept of time in Saudi Arabia is considerably different to that of many Western cultures. Time is not an issue; therefore Saudi Arabians are generally unpunctual compared to Western standards. Despite this, it is unusual for meetings to encroach on daily prayers and you will be expected to arrive at appointments on time.
  • Structure and hierarchy in Saudi Arabian companies.
    • There exists a distinct dichotomy between subordinates and managers within Saudi Arabian companies. Those with most authority are expected and accepted to issue complete and specific directives to others.
    • Age plays a significant part in the culture of Saudi Arabia. For this reason, greater respect must be shown to elders at all times. When first entering a room for example, or greeting your Saudi counterparts for the first time, you should shake hands with the most senior person first.
  • Working relationships in Saudi Arabia
    • Saudi Arabian business people prefer face-to-face meetings, as doing business in the Kingdom is still mostly done against an intensely personal background.
    • Establishing trust is an essential part of Saudi business culture; therefore cultivating solid business relationships before entering into business dealings is key to your success.
    • Respect and friendship are values that are held very highly by the Arab people. In a business setting, favours based on mutual benefit and trust are ways of enhancing these cultural values.

Due to the personal nature of business in Saudi Arabia, family influence and personal connections often take precedence over other governing factors.

Saudi Arabia business Part 2 – Doing Business in Saudi Arabia

  • Business practices in Saudi Arabia
    • The customary greeting is “As-salam alaikum,” (peace be upon you) to which the reply is “Wa alaikum as-salam,” (and upon you be peace). When entering a meeting, general introductions will begin with a handshake. You should greet each of your Saudi counterparts individually, making your way around the room in an anti-clockwise direction. However, 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.
    • Business cards are common but not essential to Saudi Arabian business culture. If you do intend to use business cards whilst in Saudi Arabia ensure that you have the information printed in both English and Arabic.
    • Initial business meetings are often a way to become acquainted with your prospective counterparts. They are generally long in duration and discussions are conducted at a leisurely pace over tea and coffee. Time should be allocated for such business meetings, as they are an essential part of Saudi Arabian business culture.
    • Gift giving in Saudi Arabia is appreciated but not necessary. Gifts are generally only exchanged between close friends and are seen as rather personal in nature. It is also advised to refrain from overly admiring an item belonging to another, as they may feel obliged to give it to you. In the event that you are offered a gift, it is considered impolite and offensive if you do not accept it.

Saudi Arabian business etiquette (Do’s and Don’ts)

  • DO address your Saudi Arabian counterparts with the appropriate titles Doctor, Shaikh (chief), Mohandas (engineer), and Ustadh (professor), followed by his or her first name. If unsure, it is best to get the names and correct form of address of those you will be doing business with before hand. The word “bin” or “ibn” (son of) and “bint” (daughter of) may be present a number of times in a person’s name, as Saudi names are indicators of genealogy.
  • DO abide by local standards of modesty and dress appropriately. As a sign of respect, it is essential to wear the proper attire during business meetings in Saudi Arabia. For men, conservative business suits are recommended. Women are required to wear high necklines, sleeves at least to the elbow, and preferably long skirts below the knee.
  • DO maintain strong eye-contact with your Saudi counterparts and expect a closer distance during conversation in both business and social settings. Both forms of communication are ways in which to strengthen trust and show respect in Saudi Arabia.
  • DON’T appear loud or overly animated in public. This type of behaviour is considered rude and vulgar. It is important to maintain and element of humility and display conservative behaviour at all times.
  • DON’T rush your Arabian counterparts during business negotiations. Communications occur at a slower pace in Saudi Arabia and patience is often necessary.
  • DON’T assume during business meetings that the person who asks the most questions holds the most responsibility. In Saudi Arabia this person is considered to be the least respected or least important. The decision maker is more often than not a silent observer. For this reason, if you are in a business meeting, it is advised not to ask all the questions.