Language and Culture for Business

This essay analyzes the impact of the Arabic speaking world on international trade, focusing on Saudi Arabia. It discusses the economic and cultural diversity of the country, opportunities and challenges for foreign investors, and ethical challenges faced by them. The essay also highlights the importance of understanding the language and culture for successful business operations in Saudi Arabia.

Running head: LANGUAGE AND CULTURE FOR BUSINESS
Language and Culture for Business
Name of the Student
Name of the University
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Introduction
The essay throws light on analyzing the impact of the Arabic speaking world along
with awareness of the economic and cultural diversity. The discussion will be related to the
different opportunities and challenges which are erected by the different foreign entrants and
the investors while they perform business in an Arab country with different instances. The
Arab countries which have been selected in the essay are Saudi Arabia and the application of
the different sectors of business are required to be based on performing business in Saudi
Arabia. Lastly, the ethical challenges are required to be analyzed which is applied to foreign
investors while working in Saudi Arabia.
Impact of the Arabic speaking world (Saudi Arabia) on international trade
Saudi Arabia has tried to maintain a surplus in trade since the year 1967 and as the
Kingdom of Saudi Arabia generates the majority of the revenue from the export of petroleum,
the surplus can rise or fall with price along with the production of oil. After the embargo of
oil of 1973, when the prices of oil increased, the trade surplus rose in a steady manner till
1978. Saudi Arabia along with the different fellow members of Gulf Cooperation Council
(GCC)- Kuwait, Qatar along with United Arab Emirates have been trying to promote the high
level of trade between themselves by removing the different barriers to free exchange of the
different goods and services between the member states (Al-Amer et al. 2016).
In accordance to the same, Saudi Arabia applies more than 12% tax on the imported
goods and this has helped in making the local competitor manufacturers competitive in the
local market. International trade is the exchange of the goods and services between the
various countries and this kind of trade helps in rising to world appropriately. There has been
a scarcity of oil in various countries and regions which is being sorted by Saudi Arabia in an
appropriate manner. The majority of the trade of Saudi Arabia is connected to the United

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States and this had helped them towards the international expansion in an appropriate
manner. As the oil is being supplied from Saudi Arabia to other countries and states has
imposed more than 12% tax and this is the highest tax which is being imposed in the Middle
East which has helped in bringing overall stability in the overall economy positively.
On the other hand, due to the different kinds of trade taxes which are being imposed
on the different export of the goods and services to USA, UK, and other countries, this has
created economic ramifications. There has been a huge influence on politics on international
trade conducted at Saudi Arabia. There is a specific example which has been considered in
order to analyze the rate of ramification in a proper manner.
For instance- There have been major implications of trade of the Canadian-Saudi
Arabia spat which created serious economic ramifications. Indeed, the influence of politics in
international trade has gained acceptance in economics. There was a diplomatic rift between
Saudi Arabia and Canada which led to a rising in diplomatic tensions between two countries
as well. There were specific products import and export which was affected.
Moreover, Canada has a trade deficit with Saudi Arabia and the Kingdom’s imports
were dominated mostly by crude oil. From the above instance, this can be concluded that
crude oil is the hot commodity wherein Saudi Arabia can find new buyers in the market and
if Canada decides to boycott oil imported from Saudi, this will not cause any kind of issues
for Saudi Arabia.
Economic diversity
In the present scenario, this has been noticed that the economic diversity of Saudi
Arabia is not at the peak level as the activities are not being able to attract the different
foreign investors. In the past, it can be noticed that economy of Saudi Arabia is one of the top
twenty economies in the world, however, the entire country is dependent on oil and the

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country has the second largest proven services related to petroleum. However, from the year
2017, this can be analyzed that the growth of GDP has been $800.8 billion which created a
huge growth of 4.1% in the overall growth of the GDP. Furthermore, as per the sector, this
can be analyzed that there has been an increase in GDP in the agricultural sector by 2.6% and
in the service industry, there has been the increase of 53.2% till 2017.
After the surge in prosperity by raising the prices of oil, the economy of Saudi Arabia
is currently at an inflection point which is creating new opportunities for the country to inject
the new type of dynamism into the economy through productivity. Moreover, the investment-
led transformation has helped in ensuring future growth along with employment-related
prosperity in the market effectively. The productivity and investment transformation have
created significant opportunities to transform the economy which has helped them in
becoming more diverse and sustainable in nature. There are several reasons which will help
in proving that economic diversity is being maintained in Saudi Arabia are as follows:
The boom in the price of oil from 2003 to 2013 has fuelled the rising type of prosperity in
Saudi Arabia which has increased the economic diversity of the country. Due to the same,
Saudi Arabia has become the world's 19th largest economy as there has been increasing as the
household income was doubled by more than 75% and this has included job offerings for a
growing number of Saudi women as well.
The fiscal perspectives along with the labor market have created challenging
conditions as there have been different changes in the policies. However, this did not affect
the economy of Saudi Arabia in a negative manner as the fiscal position of the national
government of Saudi Arabia has been successful in different operations as well.
For instance- ALDREES Petroleum and Transport Services Company is one of the
most famous oil companies which have shown economic diversity by becoming a catalyst for

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the economic restructure which has created huge scope for the increase in the international oil
prices which created long-term financial security in the economy positively. Saudi Arabian
economy is projected to expand the overall aspects in 2018 with more than 1.8% increase in
GDP and this led to improved economic conditions positively.
Cultural/religious diversity
Whilst conducting the business in Saudi Arabia, there have been different cultural or
religious challenges and there is no such inclusion of cultural diversity in the country. The
three major challenges which have been considered are described as follows:
Communication Style is one of the cultural barriers as there are different language
barriers which are being faced when both the parties speak in different languages. Moreover,
in Saudi Arabia, the communication with Saudi Arabians tends to be high and indirect as the
entire conversation mainly depends such as tome of voice and use of silence as well (Tsui and
Tollefson 2017).
Furthermore, the religious culture is the other barrier as Islam is the great ordeal in
Saudi Arab and other Arabian countries. There has been shaping of rules and regulations
which is concerned the different methods as to behave with the family or conducting the
businesses (Al-Nasser 2015). The Saudi Arabian businessmen pray five times a day, however
in Western society, there is no such inclusion of engaging in prayer five or six times a day
(Almutairi, McCarthy and Gardner 2015).
From the above, this can be identified that there is cultural diversity in Arabian
culture, and the aspects of cultural diversity are not in danger as mostly all the companies and
the businessmen working in Saudi Arabia are Muslim and they follow the different cultural
guidelines in an appropriate manner.
The opportunity of doing business in Saudi Arabia

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There are various opportunities of starting and doing business in Saudi Arabia as from
various reports, this has been identified that there are different entrepreneurs find it
welcoming place in order to set up their business (Alshammari 2016). There are many people
who have kept Saudi Arabia on top of the list as the country have the capability to diversify
from the oil and gas and they have put a lot of money in the development which will be
effective (Lamb and Wedell 2015).
Firstly, Saudi Arabia is one of the largest trading partners in the entire Middle East
which will be easier for individuals to set their business without facing any issues (Cook
2016). There is growing diversification in the economy of Saudi Arabia wherein the main
aim is to reduce the dependence on oil and diversify the economy and focus will be shifting
on infrastructure, education, and tourism (Peltokorpi and Vaara 2017).
Secondly, the common use of English in the business is the other major advantage
which will be mainly focusing on diversification practice which will be beneficial for
conducting business in Saudi Arabia (Almutairi 2015). There is no inclusion of taxation on
personal income which will be benefitting the overall stability in doing business in the
respective economy (Sandekian et al. 2015).
Lastly, Saudi Arabia is one of the most fast-growing economies wherein the growth
of GDP in 2012 and 2013 have reached more than 6% which is creating great opportunities
for export and the investors as well due to the diversification (Lefdahl-Davis and Perrone-
McGovern 2015).
Challenges of doing business in Saudi Arabia
On the other hand, there are different types of challenges while performing business
in Saudi Arabia which are as follows:

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Communication style is one of the major challenges as this is the cultural change and
therefore the different international businesses which are performing business in the economy
and they feel frustrated and confused while communicating. In Saudi Arabia, communication
style is indirect and there are pauses of speech which is not acquired by the businessmen
(Elyas and Badawood 2016).
The other difficulty which is being faced by investors in Saudi Arabia is finding
appropriate Saudi partner for joint ventures which is affecting the overall efficiency of
doing business in the respective economy (Mitchell and Alfuraih 2017). The physical
presence plays a major role in establishing a business in Saudi Arabia and this can be a huge
issue for the different investors in managing the operations.
For instance- There were different businesses which were not successful in the Saudi
Arabian economy as the communication style and the Islamic culture are not acceptable by
the different construction business (Pmi.org. 2019).
Ethical challenges that apply to foreign investors in Saudi Arabia
There are various ethical issues which can be considered for foreign investors while
doing business in Saudi Arabia. The different ethical challenges include the following:
Firstly, the ethical challenge of working in the Islam culture is not suitable for the
foreign investors as in Saudi Arabia, the main emphasis is being provided on the performance
of the team and the thrust to the culture which can be difficult to adopt (Kabooha 2016).
Furthermore, the role of Wasta is the other ethical issue as there are various Islamic
laws and cultural traditions of the religion which affected the overall efficiency in a negative
manner for the foreign investors (Alrashidi and Phan 2015).
Conclusion

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From the above, this can be concluded that while doing business in the Arab country,
there are different kinds of challenges and opportunities for foreign investors. In order to
succeed in performing business in Saudi Arabia, there are few different norms and the other
cultural traditions which have to be adopted by the company officials appropriately.

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Appendix
Figure 1: International Trade at Saudi Arabia
(Source: Tsui and Tollefson 2017)
Figure 2: Bilateral Trade Flow between Saudi Arabi and Canada
(Source: Tsui and Tollefson 2017)