Case Study on Culture affecting International Business

The Java Lounge

Adjusting to Saudi Arabian Culture

Culture refers to the specific learned norms that reflect the attitudes, values, beliefs, and customs of a society.  Often, people simultaneously belong to different groups representing different cultures and/or subcultures.  Further, every business function is subject to cultural influences.  Thus, major problems of cultural collision are likely to occur if a firm implements practices that do not reflect local customs and values and/or employees are unable to accept or adjust to foreign customs.  Thus, it is vital that firms determine which business practices vary in a foreign country and what adjustments, if any, are necessary. 

Objectives of the Study

•      To be able to discuss the problems and methods of learning about cultural

       environments      

•      To understand the major causes of cultural differences and change

•      To grasp behavioral factors influencing countries’ business practices

•      To become familiar with cultural guidelines for companies that operate

       internationally

SAUDI ARABIA

Saudi Arabia has supermordern cities like that of other developed countries, but its strict Islamic religious convictions and ancient social customes , on which its laws and customs depend, often clash with modern economic and technical realities. Saudi Arabian authorities sometimes employ latitude in legal formation and enforcement to ease these clashes.

THE JAVA LOUNGE

This case provides a striking example of the challenges presented to foreign firms by a pervasive, theocratic, national culture.  It shows why companies have had mixed success in Saudi Arabia, a modern yet ancient society grounded in Islamic law, religious convictions, and behavioral traditions.

This is the study of four young Saudis who concluded to open a resturant/lounge in saudi arabia because they thought there were enough Saudis like themselves to support a foreign type resturent/ lounge. But  their market research groups in Saudi Arabia have not been able to rely on Family- foccoused  interviews because of customs limiting male-female interactions except among the family members and because Saudis view the home as private and even consider questions and about their families as rude and an invasion of privacy.

Nevetheless the researchers successfully interviewed. They reasoned that the people who wer affluent and who had travelled abroad would talk to them. They noted people’s demeanor , such as their manners and confidence in the way they comforted themselves. The expensive wrist watches showing at the lower edge of sleeves and the neatness of men’s beards showed that there were sufficent market potential.

The very upscale Resturent/Lounge was opened carefully in Jeddah because it had more contact with foreigners and less conservative. In jeddah woman did not wear traditional garhas and cover their faces. But in most of the places in Saudi Arabia men and woman were seperated in every professions. If women were employed where men worked , they would have separate entrances and be seperated from males by partitions. This was the very difficult part to cope up with in Saudi Arabia. The Saudi Arabian Culture is very strict in case of woman. It is a male dominated society in which women have lots of boundaries and strict rules and regulations. Woman were not allowed to walk freely, they were not allowed to let their hair and faces seen in the public. There are very strict laws and the punishments could be extreme public death by government.

 The Java lounge carefully treated these assumptions and they were able to make the separate entrances and sepetate cabins and halls for men and female.

A single male without female accompainiment was not allowed to enter to the sight of families or on the ground floor where there were groups of females. The religious beliefs and the culture were also taken care of.

Some of the other companies affected by pervasiveness of religion in Saudi Arabia.

Examples:

1.       Sales of Children game Pokeman was haulted  because they thought that the game might encourage the un-Islamic practice of gambling

2.       A franchisor was forced to remove the face under the in Starbuk’s logo because saudi authorities felt the public display of woman’s face was religiously immoral.

3.       Coty beauty omits model’s face on the point of purchase displays that it depicits in other countries.

4.       Companies also adjusted voluntarily by converting revenue-generating space to prayer areas to gain goodwill of the customers.

5.       Saudi Arabian Airlines has space on the rear of the plane for prayer and so does Harvey Nichols department in Saudi  from the UK.

6.       McDonald’s Dims its lights, closes the doors, and stops attending to customers during the five times per day that men are calles to pray.

Foreigners who work in Saudi and Government punishments.

Foreigners working in Saudi Arabia are sometimes traumatized by the countrys’ harsh legal sansactions. There are religious patrols, and there are also government beheadings and hand severances in public. The government expects the passers- by to observe the punishments, some of which are for crimes that would not be offences in other countries.

The government publicity beheaded 3 men in 2002 for being homesexuals.

Personal interactions.

Not all the operationg adjustments in Saudi Arabia are due to religion. Personal interactions between cultures are triky , and those between Saudis and non Saudis are no expectation.

CONCLUSIONS

When companies source, manufacture, and/or market products in foreign countries, they encounter fascinating and often challenging cultural environments.  This very case study examines the dynamics of culture and its effect upon international business operations and strategy.  While exploring the causes of cultural differences, rigidities, and changes, it focuses upon the impact of cultural traditions on business activities, as well as the mutually satisfactory reconciliation of cultural differences.  It concludes concludes with a discussion of the ways in which firms can potentially maximize their effectiveness while operating in a world of complex and dynamic cultural diversities

The case highlights the example of the Java Lounge, a new, up-scale Jeddah restaurant that serves an affluent niche of Saudi consumers.  Further, it describes ways in which a variety of foreign firms have adjusted their products, facilities, and operating strategies in order to meet government requirements and yet satisfy the Saudi consumer.  It points out numerous paradoxes one may encounter regarding Saudi legal sanctions, purchasing patterns, and attitudes toward work.  The case concludes by noting some of the opportunities that exist in Saudi Arabi, either because of or in spite of the contrasts and contradictions found there.