Conducting business in the Middle East can be difficult to navigate from the perspective of an American organization without ties to the region. As Moran, Abramson & Moran pointed out, business in the region is influenced by religious beliefs and they can be in direct conflict with Western business practices (2014). The state of Virginia recognized the issues, so economic development officials began to put together valuable information for organizations attempting to export goods to the Middle East. The information included norms and even industry contacts in the region who could help Virginia-based companies expand into the area. Since our organization manufactures components for heating and cooling systems, this area was targeted as one with a potential for high sales because of the desert climate (CIA World Factbok, 2018). We attended the meetings and gained a basic understanding of how to best break into the region, but there were still many questions left unanswered.
Once the sales department began to deeply research Islam and how it affected business, they began to search for a potential distributor within Saudi Arabia. A potential distributor was found and one person from the department was chosen to begin relationship development with him. This was a strategic decision, though. Since women have a low workforce participation rate (Rogmans, 2012) and men are left to be the decision-makers (Moran et al, 2014), we chose a male within the department to reach out to the potential distributor. Our representative had to spend a lot of time building a personal relationship with the potential distributor before the distributor felt confident that he could stand behind our product. Had the distributor not felt a personal connection and realized that we would not be dishonest, then it would have been nearly impossible to move forward. We realized that in order to push our product in Saudi Arabia, the distributor was going to act as our ambassador and whatever we told him better be accurate because it had the potential to ruin his relationships.
Conducting business in America is very different from the Middle East because we are used to people changing jobs (selling one thing today and something different a few weeks later) and according to Moran et al, that is not the case in the Middle East (2014). People changing jobs is not viewed positively there and it may discredit the good or service they are selling (Moran et al, 2014). I have purchased goods from salespeople and realized that the quality was not as good as I thought, but I did not hold the salesperson directly responsible; to me, it was the organization’s shortfall. It seems that when you are conducting relationship-based business, everything falls back on the salesperson or the person who made the introduction. To move forward from this, we provided the distributor our engineering and quality testing data to back-up our claims. It was a difficult venture, to say the least.
Upon reflection, the process was difficult and time-consuming, but will hopefully pay-off with future sales. We have a much better chance of breaking into the Saudi Arabian market with a local on the ground who has already developed a network of relationships and can work within the confines of the Islamic norms. By being reliant upon locals to sell our products, it helps mitigate the threat of us making cultural gaffes to the customers (PSU WC, L.7, p.3). The relationship built with the distributor has allowed him to be patient with us while we try to learn the norms of his culture, so it seems to be a win-win for both of us.
References:
Central Intelligence Agency. (2018). Middle East: Saudi Arabia. The World Factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/sa.html
Moran, R. T., Abramson, N. R. & Moran, S. V. (2014). Managing cultural differences, (9th ed.). New York, NY: Routledge.
Pennsylvania State University World Campus. (n.d.). OLEAD 410: Lesson 7: The Middle East: Focus on Saudi Arabia. PSU WC.
Rogmans, T. (2012). The emerging markets of the Middle East. New York, NY: Business Expert Press. Retrieved from http://a.cloud.igpublish.com.ezaccess.libraries.psu.edu/iglibrary/search/BEPB0000139.html?0
hcj5018 says
I think that this experience you shared is an interesting illustration of how the consideration of a religion and the intensive study of its practices and how they equate to good business dealings is critical to maintaining a competitive global business presence. I also found it honorable that you would choose to represent American transactions as one that would actually take on the concerns of another who would be left vulnerable if the dealings did not have positive results.
The fact that you would actually take time to do research and position yourself in a positive light, and perhaps the necessity to understand your Saudi counterpart left you with no other approach that to utilize the Islamic standpoints of “brotherhood” and “benevolence” instead of “self-interest” which is common in the Western marketplaces.
-Hugh