Doing Business with Arab Family Offices: Best Practices
While many business owners venture into Europe and North America, there are companies that want to explore other markets and try to do business in the Arab world, a region with a very diverse market.
You will need all the help that you can get if you want to explore doing business in the Arab world where practices and norms are very different from the U.S. or European perspective. The Arab region is culturally, religiously, ethnically and geographically diverse. Therefore, it is critical to understand the cultural and economic details of each country in order the find the available business opportunities where you company will fit in.
1. “We” before “I”
Such cultures are ‘collectivist’. This means that people tend to give precedence to the ‘group’ rather than the individual.
2. Family comes first
The family is usually the central pillar upon which society is built. This can also extend to other groups such as the tribe or village.
3. Know your place
Hierarchy is important in such cultures. People tend to look to authority for guidance and accept their ‘place’ within the system, seeing it as natural.
4. Honour is everything
In a relationship-driven culture you will usually find a massive emphasis on honour, saving face and avoiding shame. How things appear on the surface are crucial to maintaining a sense of normality.
5. Networks work
As relationships are a central theme, it is no surprise therefore than people rely on networks of people and social bonds in order to get things done.
6. Consensus rules
Decisions are mostly made on a group basis, using consensus. In the Arab world “shura” is used prior to decision making which involves canvassing the opinions of those within a certain network or family or group with some authority.
Potential culture clash
Now as this article is mainly going to be seen by British readers, let’s look at some potential areas for culture clash based on differences between UK and Arab approaches to relationships and business. Many of these differences are also evident when comparing relationship driven cultures with more individualistic cultures.
1. Chit Chat
It is normal in the UK at the start of a meeting to engage in a little chit-chat then move swiftly into the business at hand. The Arab world thrives on chit chat — it is part of the process of doing business. To jump straight into business talk in the Arab world would be interpreted as demonstrating your lack of interest in the other party.
2. Touchy feely
Cultures with an emphasis on relationships also tend to be more touchy-feely than those that don’t. In the Arab world don’t be surprised if people touch you, hug you, kiss you and even want to hold your hand. To show obvious discomfort in such situations might be taken as demonstrating any lack of ‘connection’.
3. Meetings are marathons
Doing business in the Arab world can be annoying; the meeting is for many foreigners a source of frustration. Meetings can become marathons due to people taking phone calls, inviting other people to the meeting, changing the topic of conversation, lengthy tea/coffee breaks and delays due to prayer times. Negotiations specifically can go on for hours, days or even weeks depending on the basis of a relationship.
4. Don’t disagree directly
Saving face is everything with Arabs, so pick your fights carefully. Exposing weaknesses, disagreeing, pointing out failings are all serious no-nos. Whereas we may view them as “constructive” feedback, they will view them as character assassination.
As relationships are the basis of trust, Arabs tend to be quite informal with things like contracts, agreements, SLAs and MOUs. This is a region where “your word is your honour” still counts. Being too contractual will be perceived as placing more emphasis on a piece of paper rather than the relationship. Be careful how you deal with contracts and legal obligations.
Tips on how to build relationships in the Arab world
If you are planning on taking your entrepreneurial skills over to the region, here are some pointers around building strong and profitable relationships:
1. It takes time
If you are serious about mid to long-term success in the region, you must invest time. You will never win contracts and build your business in one trip. Commit to regular trips, always meeting your targets and slowly build that trust and friendships.
2. Be yourself
Always engage in chit chat — it’s important. Arabs want to know who they are working with. Don’t be afraid to open up about your family, your work or anything else that makes you, you. When meeting with people, wait for the other party to change the topic of conversation to business.
3. Understand how “face” works
In the UK we do have an understanding of how to save and give face; however, in the Arab world this works in different ways and can be very subtle. It takes time, but you need to open your eyes to how it works locally. For example, you can give face by publicly praising people. You can damage face by suggesting weaknesses in others.
5. It’s all about your “wasta”
In The Gulf, everyone has “wasta”. Your wasta essentially refers to your network of influential people that can get things done for you. Need your broadband connected before the company’s official date? Call your wasta in that company who will soon press some buttons, call in some favours and hey presto your installation date is tomorrow! You need to build your own wasta.
6. Continuity is crucial
Continuity is everything in a business relationship for Arabs. They like the security it offers them. If you have built up your business in the region and plan to hand over the reins to someone else to manage, you will essentially be going back to square one. The relationship would start from scratch.
9. Evolution not revolution
Despite the Arab Spring, it is important to bear in mind that the Arab world is steeped in history, religion and culture which culturally manifests in a people that prefer evolution rather than revolution. Be patient and do not expect people to necessarily grasp new or offbeat concepts.
Understand that the way things are done in the Arab world is very different from Western countries. Learning the culture of the Middle Eastern state you want to explore will help greatly in navigating the intricate and sometimes labyrinthine process of meeting your Arab counterparts, winning their trust and navigating their bureaucratic methods of processing paperwork and setting up a business.