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5 Tips for Negotiating with Saudis

  1. Spend plenty of time building relationships and socializing. Business is personal in Saudi Arabia, and relationship building is essential. Nothing can be done without "˜wasta," defined roughly as a network of relationships. First meetings are usually intended to get to know each other personally, as human beings, rather than as representatives of corporations, to see if there is "chemistry" between you. Flying in to make a deal overnight simply does not work. For important projects it is essential to have someone on the ground who has, or is establishing, wasta.


  2. Respect the hierarchy absolutely. Equals deal with equals. Principals usually talk about the "vision" and general framework of the project - not about details of the deal. Once that is done, subordinates carry out the technical discussions. Also consider the importance of sending someone with decision-making power. Saudis greatly dislike negotiating with someone who has to get approvals from higher ups, as this can be interpreted as disrespect toward them.


  3. Do not underestimate the power of the "advisors" surrounding the principals. Many Saudi companies are privately owned by the family and are involved in a wide range of activities. Therefore, advisors frequently have specific knowledge of the industry sector or may simply have the trust of the principal and, consequently, can make or break a deal. They are usually on the right hand side of the principal.


  4. Saving face is essential in Saudi society and is a question of honor. Never ever do anything to cause or allow a Saudi to lose face, especially in a public setting. The boss is usually considered right no matter what, and who says something is usually more important than what is said.


  5. Do not underestimate non-commercial factors that are very important in negotiations. Just as, or perhaps more important than price, can be factors such as relationships, prestige that they may get by being associated with you, training and knowledge transfer that you will provide to Saudi nationals, and commitment to the development of Saudi Arabian economy. If you have prestigious clients, do mention their names, but show discretion by avoiding details of your involvement with them. Saudization (Saudi nationals taking over the positions held by expatriates) is an essential center-piece of Saudi policies. Hence any and all programs that may help to nurture local talent provide a competitive edge and can be a big plus.

by Sharjeel Moutier

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