How Do Businesses Negotiate in Saudi Arabia?

The Saudi Negotiation Style: A Guide for Professionals Doing Business in Saudi Arabia

Imagine that you’re presented with an unfamiliar board game and told to play it. Unfortunately, you don’t understand the rules and irritate the other players by making mistakes and getting things wrong.

The game becomes a stressful and confusing experience. In many ways, the rules of different cultural settings are much like this.

For people travelling to Saudi Arabia to negotiate a contract, they can find themselves in a situation in which there are unsaid rules at play that they can’t quite grasp.

If you want to get the best out of your negotiation experience, then it’s important that you take the time to learn about the business culture and specifically, the Saudi negotiation style. This preparation, such as with Saudi cultural awareness training, will help you navigate unspoken rules and conduct yourself in a way that the other ‘players’ perceive positively.

By doing so, you’re far less likely to cause offence or to damage your reputation. Below, we’ve included some core elements of Saudi negotiation culture that you should be aware of.

If you are new to negotiating with a different culture, it’s also a good idea to get to grips with some of the basics with a course on cross cultural negotiation.

Negotiations should always end with some sort of formal ceremony. This is very important as it gives face. A photo of shaking hands or signing a contract is normal and should not be taken lightly. Photo by ITU Pictures on Flickr (CC BY 2.0)

6 Key Tips for Negotiating in Saudi Arabian Business Culture

1. Building Trust and Relationships in Saudi Negotiations

Negotiation outcomes in Saudi Arabia are based on trust.

This is rooted in the value placed on relationships and personal connections in Saudi culture. As such, if your Saudi counterparts don’t trust you, then your negotiations are unlikely to be fruitful. Invest time, prior to the negotiations, getting to know your counterparts. You may, for example, invite them to dinner or to drink coffee with you. Also, be prepared to accept any invitations extended to you.

Keep these sessions informal and don’t discuss business. Instead, show an interest in getting to know your Saudi counterparts. This may mean you have to extend your visit to Saudi Arabia on either side of the formal negotiation process to allow this process to take place. Although it may seem excessive, it could essentially make the difference between negotiation success and failure.

Many foreigners make the mistake of turning up in Saudi Arabia immediately before negotiations and disappearing straight after. The lack of value given to relationship building risks giving the impression that they are only interested in the business, an impression which is unlikely to result in positive outcomes.

2. Understanding the Circular Nature of Saudi Negotiations

Some foreigners find the circular nature of negotiations confusing.

Saudi Arabian negotiators can jump from topic to topic and discuss the same topic many times over. Far from being chaotic, this is in fact their way of fitting all the pieces of the jigsaw together. Moving back and forth from topic to topic also allows people time to digest new information, make mental connections and to move past uncomfortable subjects quickly.

It’s important, therefore, that you go with the flow of negotiations. If you’re someone who typically sticks to agendas, then be prepared to put these to one side as they have very little place in Saudi Arabia negotiations.

3. Respect, Honour, and Reputation in Saudi Business Culture

Reputation and honour are important aspects of Saudi culture.

Appearing to insult the honour of your Saudi counterparts by talking over them, disagreeing publicly with them, publicly embarrassing them over facts / figures or telling them they are ‘wrong’ runs the risk of causing considerable upset.

As such, it’s important that you conduct yourself in a way that protects the honour of your counterparts. Respect people by giving them ample time to finish what they are saying and certainly don’t roll your eyes or openly disagree with them. If you have an issue with what someone has said, then discuss it in a way that doesn’t put the blame on anyone. Even if you become frustrated, avoid showing this. Instead, remain calm and smile where possible.

4. The Role of Intermediaries in Saudi Business Negotiations

In cases where conflict develops between the two parties, it is the local custom to bring in an intermediary whom both sides know and trust.

This individual acts almost like a broker in finding a reconciliation that benefits both sides. On the whole, remaining calm, being friendly, showing a willingness to communicate and, where possible, using humour, will help you get out of most tricky situations.

Women are only slowly making an appearance in negotiations. Be aware of the gender differences in Arab culture. Foreign women doing business in Saudi Arabia should inform themselves of potential challenges. Note how the women at this negotiating table are seated separately. Photo by Richter Frank-Jurgen on Flickr (CC BY-SA 2.0)

5. Managing Emotion and Communication in Saudi Negotiations

In Saudi negotiation culture, Saudis can raise the volume of their speech considerably, to the point of near shouting.

However, this is their way of showing passion and commitment to the proceedings. They are not intending to be disrespectful, and you certainly shouldn’t take offence. Keep calm and maintain a pleasant, friendly demeanour.

It’s really important to be aware of some possible cultural differences in communication and manners, to help you make a good impression.

6. Why High-Pressure Tactics Fail in Saudi Negotiation Culture

Although haggling is a key part of Saudi negotiation culture, high-pressure tactics are not.

If you behave in such a way, then your approach is likely to backfire on you.

Win-wins are also a key part of Saudi negotiation culture. As such, try to give concessions as often as possible as this will be perceived well by your Saudi counterparts and they are likely to try and return the favour to you too.

How to Succeed When Negotiating in Saudi Arabia

So, to conclude, if you want to negotiate successfully with Saudis, you need to:

1. Build trust & invest time in relationships
2. Appreciate that negotiations can be circular
3. Show respect and deference
4. Use intermediaries
5. Not take offence easily
6. Avoid high-pressure tactics

Main photo by IAEA Imagebank on Flickr (CC BY 2.0)