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Doing Business In Saudi Arabia. Outline. Country Overview Hofstede’s Cultural Dimensions Opportunities Solutions to Common Mistakes. Country Overview. Full name : Kingdom of Saudi Arabia Population : 28 million (UN, 2011) Capital : Riyadh Area : 2.24 million sq km (864,869 sq miles)
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Outline • Country Overview • Hofstede’s Cultural Dimensions • Opportunities • Solutions to Common Mistakes
Country Overview • Full name: Kingdom of Saudi Arabia • Population: 28 million (UN, 2011) • Capital: Riyadh • Area: 2.24 million sq km (864,869 sq miles) • Major language: Arabic • Major religion: Islam • Monetary unit: 1 Riyal = 0.26 US Dollar • Main exports: Oil, Natural gas, cereals • GNI per capita: US $17,820
Four Major Regions • The Western Region (Hejaz) which lies along the Red Sea coast • The Central Region (Najd) the heart of the Kingdom • The Eastern Region (Al Hasa) the richest of all the regions in petroleum • The Southwest Region (Asir) in the southern Red Sea-Yemen border area
Challenges Faced by Westerners Sociocultural Differences: • Language • Culture Heavily Influenced by Islam • Non-verbal Communication • Boundaries Between Genders
Hofstede’s Cultural Dimensions http://geert-hofstede.com/saudi-arabia.html
Individualism vs. Collectivism Individualistic: Look out for yourself and immediate family (USA) Collectivist: Strong family ties and identity in groups (Saudi Arabia) Common Mistakes: • Rushing into business relationships • Not showing respect for age • Respect traditions
Uncertainty Avoidance Uncertainty/Avoidance: Degree of anxiety society members feel when an uncertain or unknown situations Saudi Arabians: • High Uncertainty/Avoidance score • Keep rules and rigid codes of conduct in place Common Mistakes: • Suggesting new ideas
Power Distance Power Distance: Degree of unequal distribution of power Saudi Arabians: • Middle Eastern societies are extremely bureaucratic • Decisions are not made as quickly as in western cultures Common Mistakes: • Communication with higher authority • Nonverbal Communication
Masculinity/Femininity Masculinity/Femininity: The extent to which a society stress achievement, ambition, acquisitions of wealth, and differentiated gender roles versus nurturing behaviors and gender equality Middle Eastern vs. Western Cultures: • Western and Middle Eastern culture are both masculine Common Mistakes: • Lack of training on how to not overpower others in a disrespectful manner
Saudi Arabia Opportunities and Strengths • Stable political system • Well-established infrastructure • Strong banking system • No minimum capital requirement • No restriction on repatriation of capital
Preparing Employees For Foreign Environments In-house training: • Enables staff to have a prior knowledge of the Middle East and have a better success when entering the new environment Additional Resources: • Translator • Websites • Pamphlets • Books
Work Cited • “Country Guide: Saudi Arabia.” HSBC Global Connections. HSBC, n.d. Web. 21 Feb. 2013. <http://globalconnections.hsbc.com/ global/en/tools-data/country-guides/ sa>. • “Hofstede’s Cultural Dimensions, Understanding Workplace Values Around the World.”Mind Tools Ltd. Web, 29 January 2013. <http://www.mindtools.com/pages/article/ newLDR_66.htm>. • “Saudi Arabia.” The Hofstede Centre. N.p., n.d. Web. 24 Feb. 2013. <http://geert- hofstede.com/saudi-arabia.html>. • Spillius, Alex. “Barack Obama Criticised for ‘Bowing’ to King Abdullah of Saudi Arabia.” The Telegraph. Telegraph Media Group Limited, 08 Apr. 2009. Web. 23 Feb. 2013. <http://www.telegraph.co.uk/news/worldnews/barackobama/5128171/Barack- Obama-criticised-for-bowing-to-King-Abdullah-of-Saudi-Arabia.html> • “Training for Overseas Effectiveness.” Central Intelligence Agency. CIA Historical Review Program, 22 Sept. 1993. Web. 24 Feb. 2013. <http://www.cia.gov/library/center- for-the-study-of-intelligence/kent-csi/vol4no4/html/v04i4a07p_0001.htm>.