Closing case study: Doing business in Saudi Arabia
This case study provides a profound amount of information about the internal business, culture and business environment of Saudi Arabia. In my opinion, this case study can be used as a guide if an investor wants to invest in Saudi Arabia. Saudi business environment is really complex. It has to be understood before getting into it. Saudi Arabia has a unique culture which requires specific skills to get into. Each investor has to be patient while dealing with Saudis as getting things done is Saudi Arabia may not be so straight forward as it is in other countries, especially in the western countries. Special contact may be required to get access to some business privileges in the country. In the following, I have provided answers to the questions related to the case study.
Question1: Address in detail the business climate in Saudi Arabia, is it an easy place to conduct business, or not?
Saudi Arabia possess a large chunk of the Arab population. According to the case study, the business climate of Saudi Arabia is quiet complex and not that easily understood. Before a decision is made to do any business in the country, it is advised that many visits to the country are made and a thorough market analysis is conducted. An analysis of the host market before an investment is made is also supported by research (Reilly & Brown, 2002). And if the host market is a complex market such is Saudi Arabia is, the market analysis become pertinent.
Saudi Society has progressed over time. Due to their oil rich situation, the ordinary people are also well off. There are opportunities for many types of businesses like education, retail, and technology and so on in the country. Saudi market is ready for new and innovation ideas, but getting into it might be challenging and require carefulness.
Question 2: Address in detail some of the cultural influences that impact business relationships within Saudi Arabia.
There are many cultural factors in Saudi Arabia that influence business activities over there. For example, working days in Saudi Arabia and the West are completely different. In the West, the weekend is Saturday and Sunday while in Saudi Arabia, the weekend is Thursday and Friday.
According to Li (2012), “Saudi culture has a less rigid concept of time and schedule compared to the West”. This means that you should not expect for most of the Saudis to arrive on the scheduled time for a meeting or any other scheduled activity. Being on time may not be a bid issue in Saudi society, but trust is. Therefore, it is advised to build trust first and then do business in Saudi society.
There is a huge gap between the two genders in the Saudi society. Men and women do not engage in mixed social activities. Men and women also do not shake hands in Saudi culture. Therefore, it is advised to communicate with a member of the opposite sex from a distance.
Saudi business men like to stand close to the people they are communicating with. This ensures a proper understanding of the point of view of others according to Saudi culture. It may be considered as offensive in some cultures to cross a certain limit of proximity with another human being. Therefore, in Saudi context, it should not be felt as offensive if you are in such a situation in Saudi Arabia. This should be looked at just a different way of communication to improve business communication process.
Question 3: Discuss the political, leadership and economic systems of Saudi Arabia
Saudi Arabia is an absolute monarchy. It has a strong bureaucratic system which is primarily overwhelmed with the members of the Royal family. There are no political movements allowed in the country and there is no room to disagree with the decisions of the King and other members of the national decision making personnel.
The leadership that exists in most of the organizations in Saudi Arabia is based on the family members of the owners. So, businesses may be run as family enterprises and this is who they should be dealt with.
The national currency of Saudi Arabia is Riyal which is one of the stable currency of the world (Almounsor, 2015). Due to this fact, Saudi Arabia has a strong economic basis. All the economic decision are made by the chosen ministers and bureaucrats.
Question 4: What are some of the companies, and countries, that are doing business within the country?
According to Santander Trade Portal, USA, Kuwait, France, Japan, UAE, China, Germany, Bahrain, UK and the Netherlands are some of the countries investing in Contracts, Real Estate, Chemical and Oil Industry, Transport, Trade, IT and Refined Oil Products in Saudi Arabia (“Foreign investment in Saudi Arabia – Santandertrade.com”, 2015).
Some of the companies investing in Saudi Arabia are Shell, Ford Motors, Proctor and Gamble and many financial institutions.
Question 5: Does corruption play a part in the international business environment within the country? If so how?
Corruption does play a part in the international business environment within Saudi Arabia. The main reason is because the financial and economic systems in the country are controlled by a few and there is less transparency. Only a few people know how to play with the system and they may ask for huge amount of money to play with the system for an international firm.