In Saudi Arabia, it is no surprise being the birth place of Islam that Islam is practiced by all (Kwintessential, 2010) and it is this religion that is the grounding to their daily lives. Islam is derived from the prophet Muhammad (Kwintessential, 2010) and with his teachings the Koran was created. The rules set out by the Koran is what governs Saudi Arabia and their legal and ethical system. This is called Sharia Law. One of the requirements of being a Muslim is that you need to pray five times a day at set times. For businesses this means allowing employees this time to pray. Companies also need to know that Friday is a holy day and no business can be conducted. It is also very common for businesses to be closed on a Thursday.
The holy month of Ramadan which is the ninth month of every year (Kotabe et al, 2005, p138), also influences companies. Muslims can only work six hour days and cannot eat from sunrise to sunset. This also includes all drinking, smoking, chewing gum etc. After sunset, families gather for a feast and this is called Ifta (Kwintessential, 2010). Companies need to give concession to their employees during these unusual working days as it is part of Islamic law.
To ensure that all Islamic law is being followed precisely, the Saudi Arabian government has put in place the religious police called the Mutawwa (Rice, 2004). The police ensure that all stores and businesses are closed during prayer time and that women and men are acting modestly and according to law.
3.1 Saudi Arabian Culture
Culture can be defined by the set of value, beliefs, rules, and institutions held by a specific group of people (Wild et al, 2009, p50). It also can be simply understood by a large group of people who have a shared knowledge system. It can also be said that culture is learned, interrelated, shared by all and defines boundaries (Hall, 1977, p 16). In this case, the Saudi Arabian culture mainly revolves around the religion of Islam and its laws set out by the Koran. Islam has very strict guidelines that need to be understood and followed by all in Saudi Arabia and these guidelines is what makes Saudi Arabian culture and tradition. For businesses this means being able to know what is acceptable and legal. For example companies would need to know that all pork products are banned, as well as all alcohol and all religious books and artifacts not relating to Islam (Iexplore, 2010). Saudi Arabian culture and tradition is one that is based highly on conservatism and living their lives exactly to how the Koran sets it out. This is one country that does not bow down to Westernisation and the western way of thinking and international companies would need to take this into consideration when advertising new products or opening new offices.
3.2 Dress Code
Saudi Arabia has a very strict dress code for women especially. Women must wear a Hijab and a full covering dress which is ankle-length because of Islamic law. Wearing clothes that are seen to be exposing a lot of skin is offensive to their religion and culture. Not only is the dress code made because of their religion, it also plays a practical role. Since Saudi Arabia has a desert climate, wearing revealing clothing all the time would leave you open to the harsh sun and sand. By wearing long flowing outfits, it protects the skin and keeps you cool. When businesses decide to move into Saudi Arabia, this dress code is something that would need to be considered highly because foreign clothes are not tolerated especially for any female employees.
3.3 Women in the workplace
Women in Saudi Arabia make up about 10% of the workforce. Women in Saudi Arabia are preferred to be homemakers by society and their husbands and it is rare that they are educated or encouraged to work. If a company was to send a female employee into Saudi Arabia, other companies would be hesitant to do business with her. It would be much more desirable for the female employee to be accompanied by a man. As this is part of their business culture, sending female employees into Saudi Arabia isn’t always seen as the best option,
3.4 Business Etiquette
Having an understanding of Saudi Arabian business etiquette and personal manner is essential to success. The concept of time in Saudi Arabia is different than Western cultures. The Saudi working week begins on Saturday and ends on Wednesday. Thursday and Friday are the official weekend and days of rest. Office hours tend to be 9:00am-1:00pm and 4:00pm-8:00pm (Butler, 2007). When arranging meetings it is often acceptable to be a little late as arriving in a timely manner is not an issue. It is also useful to know that Saudis enjoy mixing business with pleasure. It is not uncommon for a business meeting to have a lot of small chit chat and friendly conversation rather than all business. But be careful to avoid topics such as religion, politics and women. When opening a business in Saudi Arabia it is also necessary to take into account their religious culture because this affects their day to day life. Companies must allow for prayer times which occur five times a day. They must also offer a place where Saudi’s can practice this.
4.1 Geert Hofstede’s Cultural Dimensions
Geert Hofstede has developed a cultural theory in which each country is scored against each other based on their social behaviour and is categorised in five sections.
- Power Distance
- Refers to the degree of inequality among people (Kotabe et al, 2005, p144). This is how hierarchical is the country.
- Individualism vs Collectivism
- How much people prefer to act as individuals or as a group. It is the me versus the us (Kotabe et al, 2005, p145).
- Masculinity vs Femininity
- Considers how important either male or female values are to the culture (Kotabe et al, 2005, p145). This means are they more feminine where they are a team focused and relationships are valued or are they more male where assertiveness and a high drive for success is acceptable.
- Uncertainty Avoidance
- How much society accepts or feels threatened by change (Kotabe et al, 2005, p144).
- Long Term Orientation vs Short Term Orientation
- Refers to whether the culture has a long term view or a short term view (Kotabe et al, 2005, p145). For example is they are long term they centre around the future where as short term means does the society highly value the past and present (eg. Tradition).
Below is a table of how Saudi Arabia scores against Australia.
(Hofstede, 2009)
Using Hofstede’s cultural dimension theory, it can give companies going into Saudi Arabia a very broad overview of the culture of Saudi Arabia. It can help them understand the differences and allow them to make changes in the way they conduct business to gain a better outcome and become successful.
5.1 Recommendations
Due to the vast differences in culture and lifestyle between Australia and Saudi Arabia, there are many considerations that need to be made before engaging in business. The governing law in Saudi Arabia is the Islamic Law, making religion a large part of everyday life (Rice, 2004). Prayer occurs 5 times per day, 3 of which occur during the workday. It is custom for Saudis to leave work to attend the nearest mosque for mid-morning and mid-afternoon prayers. Taking about 40 minutes, this practice leaves the workday very disjointed and can be frustrating for guest employees and employers (North, Tripp, 2008, p215). This also lends to the fact that Saudis are usually late for business meetings. In addition to the fragmented workdays, the workweeks are very short. Government run businesses work Saturday through Wednesday, while private companies sometimes may be open a half or full day on Thursday (Rice, 2004).
In order to initiate business within Saudi Arabia, you are required to have a Saudi sponsor to enter the country. They serve as a liaison, scheduling meetings with the appropriate people (Kwintessential, 2010). It is important for Saudis to have business relations with people they trust, so a great deal of time is spent “getting to know” you and the company. This results in business decisions to move at a very slow pace, but it is important to remain patient, pressuring will not get you very far (Kwintessential, 2010)
The celebration of certain holidays in Saudi Arabia differs from those in Australia. “Ramadan is the ninth month of the Islamic calendar during which devout Muslims are required to refrain from drinking or eating during daylight hours” (Australian Trade Commission, 1989, p49). For visitors during this time it is not acceptable for them to eat or drink in public. Negotiations can be very difficult during Ramadan, and it is suggested that companies avoid transactions during this month (Rice, 2004). Business travel and negotiations are also discouraged during the weeks before Hajj, or the pilgrimage to Mecca. Although it is only required that a Muslim attend once in his/her lifetime, many Muslims make the journey every year. Foreigners find it difficult to obtain visas because priority is given to those making the pilgrimage. Even if foreigners arrive in Saudi Arabia, they are likely to encounter difficulties (Australian Trade Commission 1989, p50).
Working conditions of Saudi Arabia differ and need to be taken into account. In many large companies, the guest work force and the Saudis are physically separated. Although this does not occur all the time, it is a common way for companies to prevent resentments (North, Tripp, 2008, p85). Women are not a dominant force in the workplace, representing only 10% of the workforce. It is suggested that foreign companies send at least one male executive with a female to act as a liaison (Rice, 2004). Although women are not expected to wear veils, they are to wear modest and conservative clothing (Rice, 2004). Some men may want to fully embrace the Islamic culture and wear traditional garb, but this can be offensive to the Saudis so it is best to wear the traditional clothing from your home country with caution (North, Tripp, 2008, p86).
The Saudi government also favors companies that have participated directly in the Saudi market or investment, a policy known as “saudization.” A foreign company can improve its chances by focusing on Saudi interests, especially when dealing with a government contract. Major points of the contract that will help enhance favorability with the Saudis include training for Saudi nationals, the use of Saudi-manufactured goods or services, and priority to those attending universities within Saudi Arabia (Rice, 2004).
6.1 Conclusion
In conclusion, doing business in Saudi Arabia is not easy especially for any western country. Their tradition and culture are so deeply entrenched in society that having a sound knowledge of what is acceptable and what is not is an absolute must. More importantly understanding Islam is vital as this is the what the law has been made around. It affects companies greatly in deciding what can and cant be sold there and it rules how it should be advertised. Also comprehending the inequality between men and women is fundamental when choosing expatriates and living there day to day. Breaking any of these rules between men and women is very offensive and could jeopardise a companies chance of success. In the end, if a company chooses to expand there familiarising all employees with their culture and religious beliefs is critical to the companies success.
7.1 Reference List:
Australian Trade Commission, 1989, Austrade’s Business Guide to Arabian Peninsula. Publishing and Media Unit of Austrade, Canberra.
Butler, P, 2007, Saudi Arabia, viewed 28th August, 2010, http://www.cyborlink.com/besite/saudi-arabia.htm
Cinderella, 2010, Royalty in Saudi Arabia, viewed 28th August 2010, http://www.royalty.nu/MiddleEast/SaudiArabia.html
Delahaye, B, 2005, Human Resource Development – Adult Learning and Knowledge Management, 2nd edition, John Wiley and Sons, Milton
Dowling, P, Festing, M, Engle, A, 2008, International Human Resource Management, 5th edition, Cengage Learning, South Melbourne
E.T. Hall, 1977, Beyond Culture, Garden City, NY, Doubleday
Hofstede, G, 2009, Arab World, viewed 28th August 2010, http://www.geert-hofstede.com/hofstede_arab_world.shtml
Iexplore, 2010, Saudi Arabia Travel Guide, viewed 28th August 2010, http://www.iexplore.com/world_travel/Saudi+Arabia/Culture
Information Office of the Royal Embassy of Saudi Arabia in Washington DC, 2010, Saudi Arabia – Facts and Figures, viewed 28th August 2010, http://www.saudiembassy.net/about/country-information/facts_and_figures/
Kotabe, M, Peloso, A, Gergory, G, Noble, G, Macarthur, W, Neal, C, Riege, A, Helsen, K, 2005, International Marketing – An Asia Pacific Focus, John Wiley and Sons Australia, Milton
Kwintessential, 2010, Saudi Arabia – Culture, viewed 20th August 2010, http://www.kwintessential.co.uk/resources/global-etiquette/saudi-arabia-country-profile.html
Nationmaster.com, 2003, Middle East – Saudi Arabia, viewed 28th August 2010, http://www.nationmaster.com/country/sa-saudi-arabia
North, P, Tripp, H, 2008, CultureShock! Saudi Arabia. Marshall Cavendish Editions, Singapore
Rice, G, 2004, Doing Business in Saudi Arabia, Thunderbird Internatioanl Business Review, Vol 46(1), Ebscohost, viewed 28th August 2010
Wild, J, Wild, K, and Han, J, 2009, International business: The challenges of globalization, 5th Edition, Pearson Education, Australia
