Introduction
The culture, beliefs, and practices of people in a given demographic or geographic description significantly impact various fundamental aspects of their organizational and business culture. People of different cultures exhibit specific protocols and perspectives dictated by their beliefs. Religion and tradition constitute most of the determinants of the laws, government policies, and business culture formulated in a country. The Arab and Middle East countries are no exception as they are driven by the dominant Islam religion and have their own cultural beliefs.
Differences, Characteristics, and Challenges of Arab and Western Cultures
Western culture is undoubtedly different from the Arab and Middle East cultures. The Arabs build their traditional, organizational, and business culture regarding their religious principles (Islam). However, these traditions have been evolving gradually over the past few decades and are slowly accommodating distinct aspects of western culture. This mixture of culture and religion has proven to hinder foreign business people. Unlike in the western world, the culture and religion of Arab countries cannot be separated. Family loyalty, organizational hierarchy, and communication are some of the unique and highly regarded traits of the Arab and Middle East business culture. Religion is also taken more seriously than Western countries, and businesses in the Middle East uphold the Islamic virtues in their operations.
To work well in the Middle East, one has to face challenges such as adapting to the religious-based laws, learning to incorporate the Arab culture in business, and adapting to the ways of life of Arabs. Language, communication style, and traditional practices are essential factors in working as an expert in Arab and the Middle East. Human resource managers working in this region also face challenges, including culture and leadership engagement, incorporation of religion, and addressing the inter-cultural relationships in business.
Religion Impact on Business
Religion is comprised of shared ideas, ideals, and rituals. Values are beliefs about what is correct, sound, or significant. Religion typically serves as a foundation for ethical systems, and religion expresses ethical concepts (Waxin and Bateman, 2016). Codes of conduct and ideals that shape the behavior of a group of people are examples of ethical systems, as stated by (Bastian et al., 2018). Muslims believe in Allah and follow the Quran and Sharia law (Waxin and Bateman, 2016). According to Islamic principles, profits should benefit the collective, to which individuals are obligated as members of society (Siddique, 28; Zgheib 214; Hammoudeh, 2007). Islam can influence organizational goals, strategies, critical success factors (KSFs), structure, and, ultimately, management control systems.
An example is during the holy month of Ramadan where businesses might expect a decline in output and contractual commitments. Business meetings are held around the five daily prayers, for which space must be made available. Women are barred from full engagement in business in conservative Islamic nations (Siddique, 2017). The prevalent religion and ethical system of a country impact international business since they determine society’s behavior. This must be regarded with caution, however, because a shared faith or ethics does not always result in the same professional behavior. For example, two countries with the same faith may have opposing views on business owing to other factors such as culture.
Political Impact on Business
According to (Siddique, 2017) the effect of the three political institutions, namely the legislative, the executive, and the judiciary, informing, guiding, developing, and managing economic activity is what is termed as a political environment. In contrast, a political environment, according to Jamali and Hossary (2019), is a “permanent pattern of human contact that incorporates, to a substantial level, control, influence, power, or authority.” Any business or company’s day-to-day operations that might be impacted can be affected by the political systems of the nations. Hence in business, the political environment is considered an essential aspect of the firm’s microenvironment.
Everyday Life and Customs
A culture is a way of life as a whole, whereas a custom is a single habit or method of accomplishing something. According to Hammoudeh (2016), culture is inherited from previous generations, transmitted, and handed to future generations. Culture is a body of information that individuals interpret their experiences and produce social behavior. This information shapes values, shapes attitudes, and shapes behavior. Culture affects business in various ways. Communication and time are aspects of daily life in the Arabic state that affect business. Saudis, for example, believe they have ‘plenty of time for everything’ (Bachkirov 2019). On communication, the Saudis language can be cartegorized as high context, meaning its indirect and nonverbal qualities need to be interpreted to comprehend the complete message (Zgheib, 2017).
This aspect has an immense effect on the way business is done. This belief of having plenty of time has become a custom hence they appointments are frequently late, open, and frequently interrupted (Hammoudeh, 2016). In the Arabic states, face-to-face encounters are required to network and socialize since the formation of long-term personal ties is vital in Saudi Arabia. Saudis appreciate the opinions of their friends and relatives. Because agreements are built on trust and commitment, a verbal agreement is as valuable as a document.
Heritage And History’s Impact on Business
According to Budhwar (2019), organizational actors selectively utilize history to validate or delegitimize potential strategic paths for the future. Strategic concepts are most readily legitimized when shown as the steadfast followers of a successful plan. The historical example might be a current strategy employed by the organization or a previous strategy that has since been abandoned.
Hofstede’s 6d Model For Arab Countries
Hofstede’s 6D framework is essential in understanding the culture and its influence on business and organizational parameters. This section will review the Arab culture using Hofstede’s 6D model to determine the relationship and effects of culture on business activity.
Power distance – This dimension stipulates the cultural attitude concerning the hierarchy of individuals in a society or organization. The Arab and Middle East countries score highly (90) (Abi-Raad, 2019). This means that the Arab culture embraces hierarchy in business and organizational perspectives.
Individualism – This dimension addresses the degree of dependence among members of the society. It gauges whether the people identify as individuals or collectively. Arab scores 25, which is regarded as a collectivist society (Abi-Raad, 2019). The business culture, therefore, involves the collectiveness of the workforce.
Masculinity – a high score translates to a competitive, successful, and achievement culture (masculine). In contrast, a feminine culture has a low score and is characterized by care and quality of life. Arab countries are neither since their score is 50 (Abi-Raad, 2019).
There is no detail on the uncertainty and long-term orientation entities of Hofstede’s 6D framework.
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