Business ethics are necessary for the corporations doing business in the country. Ethical business can be beneficial for companies in a way that they attract the customers towards the products offered by firm. They also attract the investors and keep the price of a share of company high, hence protect the business from the takeover. Lack of the social responsibility and unethical behavior of the firms can damage the reputation of a firm and make it less attractive to the stakeholders. The profits also decline due to unethical behavior of the firm. In this paper the business ethics, policies, customs and procedures of the businesses operating in the United States and businesses operating in Saudi Arabia are described in detail.
The business behavior in Saudi Arabia is governed by the laws and principles of Islam (Abbasi, Hollman, & Murrey, 1989). Islam is the primary source of the legal environment as well as written laws for the business transactions. Therefore, all the business dealings, decisions have to pass through the filter of moral and ethical principles. For example, In Saudi Arabia, it is compulsory for the seller to reveal the facts about the product, such as any defect in the article should be disclosed to the buyer before arriving at the final decision. To conceal the facts about the product and false advertisement of the product is forbidden in Saudi Arabia and other Islamic countries (Saeed, Ahmed & Mukhtar, 2001). But, there are also instances in which the gap is present between the real practice and the desired practice. This is because the political system is unjust that is leading to the divergent and conflicting behaviors of the business people, who want to survive in various conditions.
The business ethics, customs and the policies of Saudi Arabia are different from those of the United States. In Saudi Arabia, successful business conduction requires skills and attitudes that are significantly distinct from those required in the United Sates. For example the differences between the tolerable and intolerable tasks are more pronounced in Saudi Arabia as compared to the United States. The business organizations in Saudi Arabia provide training to the migrants, and the training is mandatory for all the migrants. However, the training includes stress management, training g of language, familiarization with culture, and information about the schemes of government.
In the American society, people are independent, and they believe on the development. Time is given much more importance and is considered as an asset. The business meetings are managed, scheduled and arranged, and punctuality is observed by all the members of companies. People do not take time schedule and business meeting lightly. Whereas, in Saudi Arabia, the timings are flexible, and there is a concept of time sharing. People perform several tasks at a time and plan several activities. In the United States the non-working days of the business are Saturdays and Sundays, whereas, in Saudi Arabia the non-working days are Thursdays and Fridays.
Collectivism is, however, more pronounced in Saudi Arabia. Saudi People prefer to work in the form of groups. Contrary to it, people in the American companies prefer to do work alone, they prefer to perform their own duties rather than working in the form of groups (Husted & Allen, 2008). The people working in the Saudi companies give much importance to their boss, and they expect that their head/boss make all the decisions regarding company. But, the American companies do not create a difference among the low and high statuses. Every employee working in the company that is located in United States has access to the boss, and the boss consults and takes opinions of all people working in the organization before arriving at a final decision. The businesses of Saudi Arabia are not flexible towards change. They do not readily accept the change; they even discourage change or amendments in the procedures of the company, which reduces the innovative element in the companies. But the companies in America are more adaptive to change, and they remain always ready to accept the novel changes, which promoted innovation in the company’s products and services. Furthermore, there are strict rules in Saudi Arabia and less freedom, but in America there is freedom for work and fewer rules.
Further, business appointments are mandatory in Saudi Arabia. The appointments are scheduled by keeping in mind five times prayer and the Ramadan and Hajj holidays. But, in America the business meetings can be scheduled at any time in order to ensure smooth functioning of the business. In Saudi Arabia, The initial meetings are necessary in order to become aware of the counterparts. Such meeting is of long duration and the discussions take place at the relaxing pace over the coffee and tea. Additionally, time is allocated for such meetings as they are a vital part of the business culture of Saudi Arabia. But, this is not the case with the businesses in the United States. In the U.S. meeting is pre-planned, and everyone is bound to attend the meeting on the respective day and time, and all the important affairs are discussed and views and opinions of employees are considered (Pagnattaro & Peirce, 2007).
Moreover, if the business environment for women is considered in both the countries, the business procedures and customs are more difficult in Saudi Arabia. Women are not awarded the desired freedom in order to start their business. Moreover, there are also visa problems and formalities that pose several challenges and difficulties for the Saudi Arabian women. It is difficult for women in Saudi Arabia to develop the business links. But, this is not the case in the United States, where women are given full right and freedom to start their business. There are several programs in the United States that are promoting women entrepreneurship, and various NGOs are also working for the rights of women in the country. In America, it is not a big deal for women to establish the business relationships and business links.
Furthermore, there are certain business etiquettes in both the countries. There are several do’s as well as don’ts that are associated with each business culture. It is necessary for the businesses to follow the etiquettes in order to ensure efficient working. The business etiquettes in Saudi Arabia are to abide by the modesty standards and dress in an appropriate way. Conservation dress for men and long skirts, full sleeves and high necklines are suggested for women that are working and want to work in the Saudi organizations. However, it is also recommended to maintain eye contact as well as close distance in the business as well as in the social settings at the time of conversation, because they are considered as the methods fir strengthening the trusts and showing respect. The meetings and conversations of Saudi businesses are quite formal. The business dress for women working in American companies is trouser and button down shirt, for men shirt and jacket. The American meetings are generally informal, it do not mean that they are showing lack of the respect element, rather they are indicative of the fact that all people are equal, and they work equal respect (Paul, Roy, & Mukhopadhyay, 2006).
Furthermore, in order to start a business in Saudi Arabia, a sponsor or a wakeel is necessary, which performs the function of an intermediary, and arranges the appointments and meetings with the related individual. But, this is not the case in the United States, once an individual enters into the country after fulfilling all the requirements, he/she is free to work for a company or to start his/her own business, no need for a sponsor.
In a nutshell, both the countries have their own set rules and regulations, business ethics, customs, values and procedures for the conduction of business. The rules and traditions are strict in Saudi Arabia, but they are flexible in the United States. Further, the working conditions are also stringent in Saudi Arabia, but not in the United States. In the Saudi Arabia, higher authorities are given much more importance, and they are responsible for decision making, but in the United States, the higher authorities consult with the lower management, and everyone is given equal importance in the process of decision making. However, both the countries are following the business ethics according to the common culture prevailing in the country in order to ensure effectual performance of the business entities.
References
Abbasi, Sami M., Hollman, Kenneth., & Murrey, Joe H. (1989). Islamic Economics: Foundations and Practices. International Journal of Social Economics, 16(5), 5-17
Saeed, Mohammad., Ahmed, Zafar U., & Mukhtar, Syeda-Masooda. (2001). International Marketing Ethics from an Islamic Perspective: A Value-Maximization Approach. Journal of Business Ethics, 32(2), 127-42.
Pagnattaro, Marisa Anne., & Peirce, Ellen R. (2007). Between a Rock and a Hard Place: The Conflict between U.S. Corporate Codes of Conduct and European Privacy and Work Laws. Berkeley Journal of Employment & Labor Law, 28(2), 377-427.
Paul, P., Roy, A. & Mukhopadhyay, K. (2006). The Impact of Cultural Values on Marketing Ethical Norms: A Study in India and the United States. Journal of International Marketing, 14(4), 28-56.
Husted, B., & Allen, D. (2008). Toward a Model of Cross-Cultural Business Ethics: The impact of Individualism and Collectivism on the Ethical Decision-Making Process. Journal of Business Ethics, 82, 293–305
