Arab countries constitute a diverse region as regards geography, ethnicity, religion, as well as cultural practices and business etiquette. The diversity of the Arab world entails that further examination of certain ways of doing business in each country is necessary, in order to take advantage of the available opportunities offered to foreign negotiators. One of the aspects which one must understand is the specificities that Arabs have insofar as the negotiation and signature of contracts with foreign companies are concerned.
The Arab world is very vast. It is made up of approximately twenty countries, quite a few of these countries former British and French colonies. Based on this colonial past and geographical location, Arab countries may be divided into two major groups:
- Middle Eastern countries: these are located in the Arabian Peninsula and neighbouring areas. Several of these countries are part of the Gulf Cooperation Council. Due to British influence and tradition, the types of contracts are based on Anglo-Saxon law (Common Law) which is flexible in its interpretation of conflict resolution. Some of these countries are: Saudi Arabia, Egypt, the United Arab Emirates, Jordan or, Kuwait.
- North African countries: are those countries which are located in the region called the Maghreb (also known as Northwest Africa). Former French colonies, its legal system for the purposes of contractual practices, is based on the so-called Continental European law (Civil law) which leaves less leeway in the interpretation of contractual clauses than Anglo-Saxon law.
However, when negotiating in these countries it is important to take into account the great cultural differences that exist in relation to the western world.
In this article we offer 10 cross-cultural guidelines for Arab Countries that should be taken into account when doing business with executives and managers in these countries.
WASTA: INTRODUCTION THROUGH PERSONAL CONTACTS OR INTERMEDIARIES
Business culture in Arab countries is based in a system commonly known as wasta, Wasta follows that well-known Western maxim of, “It’s not what you know but who you know.” In the Arab world this is a widely exploited system and it is viewed as neither shameful nor underhand, but simply as part of the normal course of business and daily life. If you have high-powered contacts or friends in the right places you are likely to find that bureaucracy and business run in a much smoother fashion. A system of borrowed and returned favours is also prevalent. If you are asked a favour by a business partner, endeavour to fulfil it or at least give the semblance that you have tried your best. Never refuse outright to do something when it is clearly a case of wasta. Even if you are not able to get your contact what he/she needs or wants, your effort and enthusiasm will be remembered, appreciated, and surely repaid in time.
TRUST IS THE KEY IN THE ARAB BUSINESS WORLD
Although this is changing as Arab countries gain more exposure to Western business practices, for many Arabs there is no separation between personal and professional lives, and as such, a potential business partner must also be considered a potential friend.
It is imperative to organise a face-to-face meeting as the ability to build trust is greatly increased in this environment. An Arab businessman/woman will want to engage in small talk on a personal level before the purpose of the visit or meeting is even brought up. This is all part of a desire to understand you on a personal, friendly level, before discussing business.
Small talk is incredibly important in establishing friendly business relations. You must be ready to answer questions about your travel, your home, your experience of the country you have travelled to, your health, and the health of your family. It is a good idea to have a few anecdotes or stories ready to entertain with, and to ask all the questions back to your acquaintance. Be aware that it is usual and expected to ask after the health of an Arab’s family, and perhaps some general questions about his/her children but avoid asking specifically after female members of the family, as this can cause offence in more conservative societies.
BUSINESS MEETINGS IN THE ARAB WORLD
Although this will vary from country to country and indeed business to business, organisation in the Arab countries can tend to be more last-minute than in other parts of the world where at least initial meetings must be booked weeks if not a month in advance. Try not to organise a meeting too far in advance and be sure to confirm the meeting by telephone a few days beforehand.
The first thing to note when getting into the nitty-gritty of meetings in the Arab world is that the concept of punctuality can be very different. Do not be surprised if your counterpart is up to half an hour late, sometimes longer. Time moves in a different, more relaxed fashion and it is easier to go with the flow than to get frustrated. Having said that, it is advisable that you as the visitor show up on time as a sign of respect to your host.
Meetings tend to be structured very differently in the Arab world. You may expect a much more circular structure as opposed to the rigidly linear tendencies of most Western business practices. Agendas are likely to be lacking. After the customary five minutes of small talk, the point of business will be brought up and discussed, most likely with the most senior businessman in the room leading and directing the discussion.
NEGOTIATIONS WITH ONE’S ARAB BUSINESS PARTNER: PRICE IS THE KEY ELEMENT
It is crucial to remember that Arab companies were and in many respects still remain traditional trading companies and that it is therefore customary to expect an Arab entrepreneur to attempt to obtain the best price in any negotiation. The Arab negotiator, following an arduous and lengthy negotiation process, if he is not convinced that he has obtained the best price, will not conclude an agreement.
For this reason, in the initial offers, foreign companies have to submit terms and conditions and prices which can, to all intents and purposes, be considerably bettered over the course of the negotiation process. For Arabs, business cordiality – a very important aspect of doing business – consists in the seller slowly bettering the price until he convinces the purchaser that he has reached his limit. A process similar to that of a purchase of any product by a tourist in an Arab souk.
SLOW PACE IN NEGOTIATION PROCESSES
In the Arab world, the pace of negotiations is often much slower than in the Western world: one must be patient and not attempt to rush the other party in order to conclude an agreement. The same patience is crucial when it comes to bureaucracy and paperwork which is prevalent in the vast majority of Arab countries. The time and effort required in obtaining visas, import licences, permits and other necessary documents can be demoralising, but one must be aware of this fact and not “throw in the towel”.
AVOID CONFRONTATION
One of themost important things to remember when doing business in these countries is that many Arabs find it extremely shameful to be seen to lose face in public at any point. Try not to directly disagree with or contradict anyone during the meeting. Telling someone you think he/she is wrong is a sure way of causing them to lose face, meaning no business deal for you. Instead, try subtle indicators of disagreement, using phrases such as, “In order to move forward I think it may be better to…,” or, “In my experience such and such has been more effective, so perhaps that would be worth considering”.
NON-VERBAL COMMUNICATION
Body language takes on even more importance in the Arab context, then, since public disagreement is so risky. Be on the lookout for all the usual signs of positive and negative reactions through body language and know that this may well be a better indicator of a person’s opinion than what his speech suggests.
Also remember in the realm of body language that pointing and the thumbs up sign are considered rude in many Arab cultures, as is crossing your legs when sitting and displaying the sole of your shoe to someone.
A note here on personal space in the Arab world is necessary. Arabs often give you much less personal space than is usual in the West, and as such will stand or sit much closer to you, touch you more, and perhaps even take your hand when leading you somewhere. This, although very unusual from a Western viewpoint, is simply a cultural difference.
RELIGIOUS CONSIDERATIONS WHEN TRANSACTING BUSINESS IN ARAB COUNTRIES
An aspect which must be made clear when transacting business in Arab countries is that culture and religion are inextricably linked. Religion is a constant influence which has incredibly significant implications on the way of doing business; hence the importance for the foreign negotiator of understanding the Islamic religion and upholding its principles, which has a considerable influence on Arab business etiquette and culture.
Muslims are obliged to pray 5 times a day, and prayer times are announced by the call to prayer which sounds from local mosques as well as being printed in daily newspapers. The rough timings of the 5 prayers are as follows:
- Al-Fajr – Dawn, before sunrise
- Al-Zuhr – Midday, after the sun has reached its highest point in the sky
- Al-‘Asr – Late afternoon
- Al-Maghrib – Just after sunset
- Al-‘Isha – Between sunset and midnight
Not all Muslims will go to the mosque to pray, many preferring to pray at home or in the office. Be aware that there will be separate prayer rooms for men and women in offices. It is a good idea to take prayer times into consideration when scheduling meetings. Muslims are forbidden from consuming both pork and alcohol, and as such these products are difficult to find in many Middle Eastern countries, and illegal in others.
RELATIONSHIPS BETWEEN MEN AND WOMEN
These relationships are generally more reserved than in the west, especially in public. Your appearance and behaviour should be adjusted to the customs of the country you visit. A western man may greet an Arab woman by shaking hands, but only if the initiative comes from her. He should refrain from too much friendliness and openness and rather be formal. The presence of other people is advisable. Western women can be friendly and polite but should face their interlocutor by keeping clear physical distance. Wearing proper and unobtrusive clothes is recommended in any case and will be rewarded by respect.
INSH’ALLAH
Insh’allah may mean “no” or “maybe.” “Yes, insh’allah” underlines a “yes.” If Arabian partners want to criticize or say no, they may indicate this by changing from the factual to the personal level, by digressing from the problem or topic, deferring the decision, or presenting alternatives or amendments. Serious problems are preferably discussed in closed rooms and no longer in a chatty atmosphere.
Extensive information on doing business in Arab Countries can be found in the following Business Negotiation Guides: