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How Do Businesses Negotiate in Saudi Arabia?

saudi-men-talking

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 which 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 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 offense or to damage your reputation.

Below, we’ve included some core elements of Saudi negotiation culture that you should be aware of.

 

[Did you know that Saudi Arabia is ranked as one of the more complex business cultures among the top 50 economies of the world? The Business Culture Complexity Index™ ranks the country 27th, just behind Vietnam.]

 

saudi boss man

Hierarchy is very important to understand within negotiations in the Arab world. Always be aware of who is present and what this does to the flow of information. People do not speak freely.

 

1. Build Trust

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 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 westerners 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 conclude in positive outcomes.

 

2. Negotiations are Circular

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 that 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 is a Must

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 your self 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.

Gift giving is also a cental part of Arab culture and is another means in which respect is shown.

 saudi women meeting

Women are only slowly making an appearance in negotiations. Be aware of the gender differences in Arab culture as well as the expectations Islamic doctrine has on how men and women should interact. Note how the women at this negotiating table are seated seperately.

 

4. Intermediaries are Common

In cases where conflict develops between the two parties, it is the local custom to bring in an intermediary who 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.

 

5. Don’t take Offence

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 also help you make a good impression.

 

6. Avoid High Pressure Tactics

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.

If you are new to negotiating with a diferent culture it's also a good idea to get to grips with some of the basics around cross-cultural negotiation.

 

Negotiating with Saudis

So to conclude, if you haven’t invested building trusting relationships with your counterparts then your negotiations are at risk of stalling.

Protect the honour of your Saudi counterparts and show respect, even if you’re feeling frustrated and avoid high pressure negotiation tactics – they can and will backfire!

If you want to learn more about Saudi business culture, why not take our great new online course? It's a 30 minute video packed with information on how to best present yourself in Saudi, or when working with Saudis.

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