Business culture in Saudi Arabia

Saudi Arabia's business culture is unique, and understanding how things work in the Kingdom's boardrooms, offices and venues is critical to running a successful business in the Arab world's largest economy.

Saudi Arabia's business culture is adapting to a spirit of openness. However, it remains a conservative country with traditional values, and business etiquette in the Kingdom reflects this.

Features of business etiquette in Saudi Arabia

Despite the fact that about half of the Kingdom's 13 million workforce — expats, the business culture in the country is based on local rules. Most of the decision makers are Saudi, and people doing business can equally count on unrivaled Arab hospitality, canceled meetings, cordial conversation and tough negotiations. All this is washed down with plenty of qahwa (traditional Arabic coffee recipe). Flexibility, open-mindedness and a calm demeanor are essential when dealing with Saudi Arabian business representatives.

Local business culture revolves around personal relationships, consensus and company cohesion, be it family, extended family or business. Who are you and who do you know — important in local business circles. Time spent getting to know business partners and gaining their trust — this is time well spent. Understanding the unique interactions and influences between families (tribes) in Saudi society is also helpful. It may take many meetings, both formal and informal, to make any tangible progress in a business.

Changing landscape

Saudi Arabia's business culture is adapting to the changes and new realities associated with the Saudi Vision 2030 program, one of the goals of which is to create a dynamic society. This is evident in the expanding role of women in business and the workforce. For example, the country already has a thriving community of women entrepreneurs running startups.

«Saudi Vision 2030» also helps improve business operations in the Kingdom. Accountability, transparency, ethics and governance are now under greater scrutiny. In 2011, the National Anti-Corruption Commission under the government began work to combat corruption in public organizations. As a result, Saudi Arabia's ranking in Transparency International's Corruption Perceptions Index continues to improve steadily.

Saudi Arabia may lack the business-friendly image of its neighboring UAE. However, the Kingdom offers unique opportunities for those who are willing to work to understand local business etiquette.

Working hours and conditions in Saudi Arabia

Most offices are open from Sunday to Thursday, perhaps from 8:00 to 18:00 or (less commonly) from 7:00 to 19:00 (with a long lunch break). By law, the maximum working week is 48 hours, and during the holy month of Ramadan, Muslim employees only work 30 hours a week.

Work-life balance is not a familiar concept in Saudi Arabia — at least for expats. For most of them, life in the Kingdom — it's about working hard and saving money. Because Saudi Arabia has long been dependent on foreign expertise (where employers effectively own employees while they are in the country), businessmen often see expats manning company offices at all hours. This is especially true if it is a Saudi company. The idea of flexible or remote working does not apply to most sectors.

Islam is the cornerstone of life in Saudi Arabia, including the corporate world. Meetings and events are usually scheduled outside of prayer times. In addition, during Ramadan it is prohibited to eat and drink in public places (including offices) during daylight hours.

Business etiquette in Saudi Arabia

Business etiquette in Saudi Arabia reflects the interests of society as a whole. That is, he is conservative, but certainly hospitable. For expats who have done business in other countries in the Arab world, the themes are familiar.

Greeting

A handshake is the standard greeting for men upon first contact in Saudi Arabia. If you greet a woman, wait until she extends her hand first before offering yours. If she doesn't, keep your hand close to you. Greet everyone in the room with a handshake, starting with the oldest person in the room, and then by seniority (if you know the hierarchy in advance).

Saudis and other Arab men may hug or kiss on the cheek, nose or forehead as a sign of deference and respect. However, the same is not expected from male expats.

Timekeeping

Meetings and office environments in Saudi Arabia, although business-like, tend to be conducted in a flexible and cordial manner. Meetings likely don't have an agenda (or don't have someone to take minutes), and don't take it personally if the meeting starts late or gets canceled at the last minute. In fact, Saudis in general do not place much importance on punctuality. Meetings often start late and prayer times dictate the schedule. Some firms (especially multinational corporations or large Saudi organizations operating internationally) now have employee time tracking devices.

Be prepared for interference. The older your contact, the more stable the flow of well-wishers, phone calls and other interruptions! No matter how unpleasant it may be to have your speech interrupted, breathe deeply and smile politely!

Small talk and taboos

As a rule, in the initial stages of dating, business meetings begin with small talk. Acceptable topics for discussion — family, business, art, culture and sports. Your excellent views on Saudi culture, history and achievements will be very well received. However, stay away from discussions of local politics, religion, or the royal family, unless (in the unlikely event) they ask for your opinion on the matter. Knowing a few Arabic greetings will also be very helpful, although most Saudi businessmen speak good English.

During a meeting or negotiation, Saudis sometimes become loud and passionate. This may sound aggressive to our ears, but while it may indicate dissatisfaction, it can also indicate enthusiasm for the issue at hand. There will be a period of quiet next, so do not interpret the silence during the meeting as anything other than a time for reflection and contemplation. Meetings are usually held in English if there are representatives of different nationalities present, but participants may discuss sensitive or technical issues in Arabic.

Body language

When it comes to the business end of negotiations, the Saudis' views can sometimes become difficult to understand. Communication becomes more based on body language and other nonverbal cues. It is rare that a business deal or proposal will be outright rejected verbally.

Many Saudi businessmen are used to dealing with foreigners and will forgive small cultural missteps. There are some red lines that can cause offense and should be avoided. For example, never show the soles of your feet or argue openly with your owner, especially in front of others. Also, keep your voice low and use only your right hand when eating.

Dress code

It's always best to dress to impress in the Kingdom. Offices and meetings require formal attire. This means a suit and tie for expats and traditional dress (white thobe, red and white checkered gutra) for locals. All women must wear an abaya (national women's clothing), although foreign women do not need to cover their heads.

Gifts

Gifting is not part of business etiquette in Saudi Arabia. However, if you decide to give a present (perhaps to a person you know well), give it with your right hand.

Business cards

Exchange business cards (right hand) at the beginning of the meeting. Also try to write down any specific designations in your contact card — for example, a sheikh, a doctor or an engineer — and refer to this person from time to time during the conversation.

Organizational structure and hierarchy in Saudi Arabia

Saudi society is hierarchical, and so are companies. Most organizations have rigid top-down structures, with decision-making authority typically vested in only a few senior managers. If it is a family business, it may simply be the head of the family.

Decision making process

Although the pace of change in Saudi Arabia is rapid, family businesses are notoriously slow to innovate, and corporate governance and succession planning are seen as key challenges in the sector.

Decision-making power in Saudi Arabia rests with just a few senior executives. Although line managers may be involved in planning, execution and setting budgets, strategic decisions are usually made by a select few.

Meetings and negotiations

One of the biggest challenges facing anyone doing business in Saudi Arabia — it's getting in the door and meeting the right people. There are two ways to approach this: go to the office and hope that Arab hospitality towards visitors will provide you with an unexpected meeting with the decision maker. Alternatively, get to know each other personally through a contact; sponsors in Saudi Arabia can be very helpful in this regard.

In addition to offices, business meetings can take place in the hotel lobby, as well as over lunch or dinner. Be prepared for delays and cost overruns. Initial meetings may not cover any substantive issues as the Saudis see them as an opportunity to get to know each other and build trust.

Presentations and sales proposals

When you give a presentation, keep it concise and not too technical, unless the topic requires it. However, Saudis value aesthetics and style. You may also want to make a copy of the presentation in Arabic.

If you are selling a product or service, bargain on the price — This is fine. After all, the Saudis — tough but fair negotiators. However, do not be pushy, hasty or use high pressure tactics. Be polite but firm, never lose your temper or raise your voice.

How to avoid disputes

During negotiations, remember that reputation and honor are important in the business culture of Saudi Arabia. For this reason, avoid discussing or disagreeing with the Saudi business owner in front of others. Discuss any sensitive issues in a way that does not place blame.

Contract approvals and signing usually go through multiple hands and levels of bureaucracy. Only when you have a signed legal document in hand can you open the (non-alcoholic) champagne!

Business networking in Saudi Arabia

As Saudi Arabia becomes more business-oriented, opportunities for networking are opening up. This is an accepted part of modern business culture in the Kingdom, from invitation-only embassy visits to conferences and exhibitions, and meetings with trade delegations.

Professional business associations are also a great place to network.

Internet networking is also widespread in Saudi Arabia, with LinkedIn being the most widely used network.