Abstract
In the ‘global village’ that the world has now become, it is important for any open minded person to clearly understand that different people have different cultural characteristics which majorly affect the way they conduct themselves on a day to day basis and this includes how they conduct business. By being able to clearly bring out the way people in Saudi Arabia do their business, this paper helps the reader understand how concepts of time, communication methods and ways to conduct meetings and social gatherings all have a major role to play in interactions with the Saudi Arabian culture.
Introduction
Saudi Arabia is not only the thirteenth largest country in the world but also one of the largest countries on the Arabian Peninsula, occupying approximately 75 per cent of the peninsula in the South West of Asia. It’s economy is powered mainly by oil since it is the largest world producer and exporter of high quality crude oil. With this kind of money in its economy, Saudi Arabia imports most of its commodities including consumer goods, transportation equipment and even labour (Lewis, 2003). As shown above, Saudi Arabia is one of the wealthiest countries in the world hence it attracts the attention of businessmen with a population of 20.3 million, a GDP: $145 billion, and a per capita income of $7,286, (Lewis, 2003)
Explain how the people negotiate in Saudi Arabia.
Saudi’s culture is fairly homogenous, however, business people in Saudi Arabia, especially those in the much younger generations usually have experience in interacting and doing business with foreigners from other cultures. Saudi’s are generally people oriented focussing more on the personal relationship as opposed to the task at hand, they look for honesty in your business dealings. Saudi’s are known to be very hard bargainers and think of this as a normal process in both their business and social life. This may be due to the fact that before the discovery of oil in Saudi Arabia, the kingdom produced extremely little commodities in both consumer goods and manufacturing goods and hence the major business activity was trading. This ‘merchant culture’ moulded them into shrewd bargainers and highly skilled at that. This, however, does not necessarily mean that every businessman in Saudi Arabia is open minded. When doing business in the beautiful kingdom, most merchants will actually expect business to be carried out their way (Katz, 2006).
Business people in Saudi Arabia are usually shrewd negotiators and should never be underestimated. Most of them actually enjoy the process of haggling and negotiating. Before the closing of any deal, they expect a lot of haggling and negotiating during the period and they may be highly offended if the other party fails to play along. Saudi’s expect flexibility in terms of price and other factors so it may be impractical to do business here while having narrow expectations of how a deal might be closed (Katz, 2006)..
The bargaining stage of a negotiation could take quite long. Prices between final offers and the first agreements usually move drastically, sometimes more than 50%, a lot of room should therefore be lest to allow for concessions at the different bargaining stages. After conceding, ask the other party to do the same but do not make them feel like they are losing (Katz, 2006).
Deceptive techniques such as telling lies, showing fake non-verbal signals, misrepresenting the true value of an item, making false demands and fake concessions and also pretending to lack interest in the whole deal are just a few of them. The Saudi’s are masters at this game and hence any negotiator should go there prepared. Such tactics should however not be taken personally and even more importantly, trying to beat them at their own game could backfire leading to the loss in the deal and a damaged relationship. Detecting the lies will be no easy task and one should always verify the information provided via a third party preferably local channel, even when you actually see right through a lie, pointing it out bluntly will be regarded as highly offensive, Saudis are mostly too proud even to admit that they have limited authority in a situation regardless of the truth (Katz, 2006).
Negotiators in Saudi Arabia often use pressure techniques during the bargaining process. This involves nibbling and/or making final offers. Final offers are often made severally during this process but they are rarely the final agreements. It is therefore wise to avoid tactics such as starting with your best offer, making offers that expire or applying time pressure since this might be taken as lack of interest in a long term relationship, silence, on the other hand, can be a very effective way of showing rejection to a particular offer.
Aggressive and adversarial techniques are very rare or non-existent among Saudi negotiators. Most of them prefer more subtle techniques even when expressing anger and indirect threats. Outside negotiators should also be keen not to indulge in aggressive behaviour such as walking out or threatening since such behaviour maybe taken personally.
Explain how the person get a skills in the negotiation ( Saudi Arabia)
Relationships and Respect
The culture in Saudi Arabia encourages a strong loyalty of any person to their group while simultaneously giving a chance for individual preferences. Working to build a lasting and trusting personal relationships is very important to most Saudi’s and hence they usually expect the existence of such a relationship by the time they are closing a deal with any business partner. A negotiator should therefore learn to acquire the skill to build meaningful relationships fast. Establishing these relationships can lead to creation of powerful networks.
When negotiating in Saudi Arabia, the business culture is such that respect comes with rank, seniority (age) and rank. It is hence crucial to treat seniors with the utmost respect. Showing status will also help people to take you more seriously during the bargaining process. To improve status, simple actions such as choosing a great hotel to stay in, travel in a limo and so on may go a long way to avoid being taken for a low ranking intermediary.
Communication
The official Saudi Arabian language is Arabic. However, most business people, especially those of the younger generation are quite fluent in English thus you will rarely need an interpreter. However, when speaking in English during a negotiation, it is important to speak in simple, short sentences and also avoid slang and jargon so as to ensure people with a limited command of English are also on board. Pausing and allowing for interpretation is also a skill that needs to be mastered.
Saudis generally use low, gentle tones when speaking. Raising your voice usually signifies anger, which may be detrimental to the negotiations. At business meals (breakfast, lunch or dinner), the conversation should be kept short and quiet and at close proximity to show that you are comfortable around them.
It is important to note that in Saudi business meetings, conversation is generally indirect. They use ambiguous language making it hard to point out the exact message. Open disagreements and confrontations should thus be avoided and instead, adopt the use of flowery phrases and other rhetorics and a direct ‘no’ or ‘yes’ answer should not be expected often during the negotiation period. As mentioned above, silence is another effective way to communicate a negative response and this may be utilized (Katz, 2006).
Explain the steps for the negotiation ( Saudi Arabia).
First of all, choosing a local intermediary is very important. This should be someone who is able to leverage existing relationships in order to make initial contact is very important. This will make it easier to build relationships and introduce you to the right contacts. It’s also a legal requirement to have a sponsor before visiting the country.
Negotiations are usually conducted by an individual or a team. When a team of negotiators is involved, it’s important to assign specific roles to each member of the team. Saudis can take advantage of disagreements between members of the other team (Katz, 2006).
Meetings should be scheduled at least 4 to 5 weeks in advance, the duration of a meeting in is mostly undetermined so one should plan for the meeting to take as long as possible. The details and positions of attendees should also be provided in advance, Saudis like to know who they are meeting.
After introductions, you should offer your business card to all in attendance, the cards should be in English on one side and Arabic on the other. The card should contain all the relevant information regarding rank and be issued with the right hand.
the first negotiation meeting mostly consists of just small talk which may include inquiries of topics such as health and family and other personal questions. Patience must thus be practiced since it may take several meetings before you can start talking business.
Presentations during the meetings should be short, simple yet concise. You should also pause to allow interpretation and questions. Use clear and attractive visuals including diagrams and un-offensive pictures, having a translation of your presentation to Arabic is not a must but much preferred (Katz, 2006).
Explain how the culture is important in the negotiation style. ( Saudi Arabia).
The Saudi Arabian culture is basically the driver of the negotiation style that one is going to choose while meeting with the Saudi Arabians for a business deal. The way one carries and portrays themselves may carry as much weight as the lucrativeness of the deal. Because of this, any negotiator must understand fully the Saudi Arabian culture.
For instance, Saudi Arabia is a male-dominated society. Although some of the women in this community are working, they rarely attain positions of higher authority and their income remains less as compared to those of men. This shows that it is quite probable that Saudi businessmen would be uncomfortable in forming a business relationship with a woman from another culture. For this reason, women negotiators should expect to be met with less respect and more restrictions in the country. As a visiting business woman, more emphasis should thus be put on the importance of your company and the important role you play in it, a personal introduction and/or a letter of support may also come in handy to raise your status and acquire respect and authority during the negotiation period (Katz, 2006).
References
Lewis, R, D. (2003). National Cultural Profiles 2003 Saudi Arabia [Online] Available:
www.hilton-university.com/downloads/SaudiArabia.pdf
Lother Katz (2006) Negotiating International Business Saudi Arabia: The Negotiators Reference Guide to 50 countries around the world.
