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Culture and business in
Sachin Sebastian – 122
Sahanna MS – 123
Sai Kalyan – 124
Sanjana UN – 127
Kingdom of Saudi Arabia
• Capital and largest city Riyadh
• Official languages Arabic
• Religion Islam (official)
• Government Absolute monarchy until 1992
- King Salman bin Abdulaziz
- Crown Prince Muqrin bin Abdulaziz
- Total 870,000 sq m
- Water (%) 0.7
- 2014 estimate 30,770,375 (41st)
- Density 12.3/km
• Currency Saudi riyal (SR) (SAR)
Politics of Saudi Arabia
• The Quran and the Sunnah are declared to be the country's constitution.
• No written modern constitution.
• Only Arab nation with no elections.
• No political parties nor elections are permitted.
• On 25 September 2011, Saudi Arabia's King Abdullah has announced that women
will have the right to stand and vote in future local elections.
1. What forces shaped modern Saudi culture? How similar or different are
these forces from those that shaped the culture of Western nations?
Determinants of Culture
Forces which shaped modern Saudi culture
• Conservative country
• Culture shaped by Wahhab sect of Islam and Bedouin traditions
Saudi as we know it
• Al Saud clan made a pact with Ibn Abd al wahhab.
• Store & restaurants - close at the 5 daily prayer times
• Many restaurants – Separate dining room for men & women
• Women – Not allowed to drive a car, Sail a boat or fly a plane, need travel slips
Wahhab sect of Islam
• Trust & loyalty
• Long meetings – open office
• Importance to status
• Loyalty to family & friends
Forces which shaped culture of Western
• More broad minded
• Merit based culture
• Gender equality
Western countries as we know it
Church - Bible
• Emergence of capitalism
• Protestant ethics – Hard work, Wealth creation & frugality
• Rather than in indulging in worldly pleasures, invest in expansion of enterprises
2. What kind of Misunderstanding are likely to arise between an
American company and a Saudi enterprise, if neither of which has
experience dealing with the other
Power Distance Individualism Masculanity Uncertainity
Long term Orientation
Hofstede Cultural Dimension
Saudi Arabia America
Islamic values and
Implication for Managers
Cross cultural Literacy1
• Ill informed companies
• Incentive pay system, Name of a product etc.
• Perception towards time
Culture & Competitive advantage2
• Cost of doing business
• Haberler’s Theory of International Trade
Commitment to community3
• Triple bottom line and sustainability
Implication for Managers
• Culture evolves over time
• Chronic labor problems in Saudi
• Changes happening - Nitaqat law, Saudization
• Anti-American sentiment
• Saudi differ from other middle east countries
3. If we were in a position to advise a Western company that was
considering doing business in Saudi Arabia for the first time, what
would our advice be?
Cross-Cultural Literacy is very important
Take time and learn about the Saudi culture and the Saudi way of doing
Must be constantly on guard against the dangers of ethnocentric
Do not touch their core values, especially their belief system (religion).
Businesses should behave in a manner consistent with Islamic
Gulf Arabs are exceptionally proud of their language,
which is a strong, uniting bond right across the Arab world
Business and personal friendships are one and the same, and
Arabs generally prefer to do business with people they know
Important decisions should be made in person, not by correspondence or
Saudi Arabia a high-context country will often speak in vague terms,
generalities, and metaphors during negotiations.
In Saudi the written and verbal acceptances are of the same value,
therefore one should not make any promise that cannot be kept.
Everything has to go through administrative channels in the country. It
often is difficult to sidestep a lot of this red tape, and efforts to do so can
be regarded as disrespect for legal and governmental institutions.
Patience is critical to the success of business transactions.
Decisions can take a long time, probably longer than you’re
The price should be the last thing to negotiate, and one should be
prepared to give discount.
• The company tries
to integrate a global
to decision making.
• The firm tries to blend its
own interests with those
of its subsidiaries on a
• Strategic decisions
are tailored to suit
the cultures of the
the MNC operates
• The values and
interests of the