Saudi Arabian Business Structures

Business is usually developed around a family unit with all key employees coming from the extended family.

Nepotism is a way of life and the idea that positions would not be given to family members is incomprehensible. Who can you trust if not your own family? Within this family-based structure, the company would be developed along strongly hierarchical lines with the majority of power being held at the top by the senior, usually older family members.

Islam teaches the importance of family relationships, loyalty and the need to show respect to older people and forms the backdrop to social organisation. Trying to introduce flatter systems where promotion is based upon demonstrable talent rather than connections could be seen to fly in the face of culture, history and religion.

As all business is family and relationship-based, it is absolutely vital to be prepared to devote as much time and effort as necessary to relationship-building. Every contact within an organisation is important, as you may not be aware of everybody’s connections. A seemingly lowly employee may prove to be a favoured relative of a senior figure and therefore of greater potential help than some other apparently more important contact.

A brief overview of some key concepts to consider when doing business in Saudi Arabia

Written and Produced by Keith Warburton

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Overview

Saudi Arabia is a globally important country from a number of perspectives. As one of the world’s largest producers of oil, it has a strategic impact on the world’s economy (and only a handful of countries can say that). In addition, as the de facto leader of the Sunni branch of Islam, Saudi has a crucial influence on the rest of the Gulf and beyond into the wider Muslim world.

Saudi Arabia cannot be ignored – it really is that simple. Agree or disagree with the ways things are done in Saudi (any many vehemently disagree without really knowing much about the country) the Kingdom is just too globally significant to be ignored.

Is doing business in Saudi Arabia a good idea for you and your business? If you strip away all of the ‘noise’ which surrounds the country and analyse the fundamentals around demographics, size of the economy, personal wealth and attitude to consumerism, then Saudi starts to look like a great place to do business in. Saudi has a large, increasingly prosperous population which is predominantly youthful and aspirational. They want to buy what you have to sell.

On the other hand, Saudi Arabia is a notoriously complicated place to do business in and if you are planning on doing business in Saudi Arabia it is absolutely essential that you study the Saudi cultural approach to business before you arrive in-country. You need to understand the role played by religion and kinship in all business dealings within the Kingdom and you need to be able to show respect for these twin pillars of commerce. Do your homework in advance – not when you have already made the mistakes.

This country profile provides an overview of some of the key aspects of Saudi Arabian business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips