Doing Business in the Middle East: Cultural Challenges example

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Doing Business in the Middle East: Cultural Challenges

People in the Middle East possess a unique culture that differs from people from Western countries. Arabs have a culture that values honor, power, and Wasta. International organizations doing business in the Middle East faced challenges regarding trust, authority, and nepotism due to the prevalent culture of the region.

Honor Culture and Trust

Arabs are described as having an honor culture and this affects the level of trust they have with their business partners. In a country with an honor culture, a person’s reputation is determined by what they do and their actions are also judged by others (Banham 5). They have a reputation for often protecting themselves and their families from being taken advantage of, but also generous to others at other times (“Doing Business”). Therefore, it requires more effort to build trust with Arabs. Signing non-disclosure agreements do not prevent them from being generally more cautious with sharing business details (Bajwa 5). This is the main reason why conducting negotiations in the Middle East may result in a long-drawn-out process. Arabs are also likely to approach negotiations as a competition and use it as a chance to defend their honor (“Doing Business”). To be successful, foreign businessmen have to first attempt to foster strong relationships based on mutual trust before moving to the negotiation stage.

Power Culture and Authority

Traditionally, power in Arab societies is based on family, friends, and the capability to use force. The head of the family possesses absolute power. Every family member must obey and respect his wishes and children are brought up to be submissive and obedient (Sabri and Rayyan 6). People from power cultures tend to accept that decisions should be made by individuals from higher positions. Transferring this mindset to the business world would meant subordinates significantly depend on their superiors and there is a preference for autocratic management. Decision-making processes are restricted to a number of selected powerful individuals who reinforce their power by producing rigorous rules (Al-shabbani 44). Submissive and obedient subordinates are rewarded and they are discouraged from thinking creatively and coming up with innovative ideas (Sabri and Rayyan 6). However, things may change in the near future. Recent trends in the region suggest that younger generations are more likely to appreciate participative and consultative leadership styles when compared to the older generations (Alteneiji 42).

Wasta Culture and Nepotism

Wasta originates from the Arabic idea of the “middle.” It refers to intermediaries and loosely defines as “connections” or “influence” (Feghali 1). Historically, Wasta was utilized as a way for managing conflicting parties between families and tribes in the Arab world through the use of an intermediary (Ali et al. 5). Today, Wasta is prevalent across the Arab world and is regarded as a way of conducting business. Wasta could become a source of nepotism and its most dangerous manifestations could result in the parties involved to be liable under anti-corruption legislations (Feghali 2). In terms of …

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