TC. Dokuz Eylül University

Faculty of Business Economics

Lesson: International Political Economy Subject: International Comparasion of

Business Cultures(Saudi Arabia & South Korea)

Submitted to: Ass. Prof. Burçak Müge Vural

Submitted BySaadet Ayman

Ali Uğur YenmişEsra Canbulat

TABLE OF CONTENTS

INTRODUCTION..................................................................................................................- 2 -SOUTH KOREA................................................................................................................- 2 -

Values and Norms in South Korea.................................................................................- 2 -SAUDI ARABIA...............................................................................................................- 4 -

Values and Norms in Saudi Arabia............................................................................- 4 -Doing Business with Koreans..........................................................................................- 5 -Doing Business with Saudi Arabians..............................................................................- 7 -

Statistics About Some Indicators in Both Counties: South Korea..........................- 8 -Saudi Arabia................................................................................................................- 10 -

Business Etiqette.............................................................................................................- 12 -Korean Business Etiqette (Do’s and Don’ts)............................................................- 12 -Saudi Arabian Business Etiquette (Do’s and Don’ts).............................................- 13 -

Women In Busıness........................................................................................................- 13 -Women in Business in South Korea..........................................................................- 13 -Women in Business in SaudiArabia.........................................................................- 14 -

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INTRODUCTION

Doing business across countries raises day by day and businessmen realized that they should figure out the culture of the host country in globalized world.Considering to culture ,which is a system of values and norms that are shared among a group of people and a set of acceptable and unacceptable behaviors,forms the basis of “Way of doing Business”.

In our paper we have analyzed working and business customs,structure and hierarchy of companies and working relationships underlying culture of countries.

SOUTH KOREA

Over the past 50 years, South Korea has been able to transform itself from an agriculture-driven economy to a manufacturing and service-oriented economy. During these years, its industrial structure has changed dramatically to include automobiles, petrochemicals, electronics, shipbuilding, textiles and steel products and become attractive option for doing business in South Korea.

Values and Norms in South Korea

Harmony in personal relationships is a dominant force in a Korean’s life. Facts, logic and conclusions are often not nearly as important as how one is looked upon by others. Friendships are tight-knit and valuable. It is an insult to refuse a friend’s request. It is even less forgivable to fail a superior. These friendships are possible because everyone does his or her best to preserve and foster harmony and good feelings. The bearer of bad news may smile to soften the blow. He (she) may avoid giving the news, even if he (she) is merely the messenger and in no way responsible for it.

 It is very hard for Koreans to admit failure and it is devastating to lose face in Korean culture. The directness of Westerners is thoroughly unpalatable to Koreans, whose self-esteem is always on the line. In Korea, it is of unparalleled importance to maintain kibun or the mood or feeling of being in a comfortable state of mind.

Kibun

The word kibun can be described in terms of pride, face, mood, or state of mind. In order to maintain a Korean’s sense of Kibun, particularly in a business context, one must show the proper respect and avoid causing loss of face. The somewhat annoying thing (for westerners) is that it is very easy to hurt someones kibun by everyday actions such as being argumentative,ignoring Korean social rankings even giving bad news. In a culture where social harmony is essential, the ability to identify another’s state of mind, often referred to as nunchi, is crucial to successful business ventures. For this reason, you must be aware of subtleties in communication, observing non-verbal and indirect cues that often suggest the true sense of what is being communicated.  

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Nunchi

Nunchi refers to a concept in Korean culture that involves listening and gauging the other person’s mood – often without the help of clear (to Westerners) signals.  It is of central importance to the dynamics of interpersonal relationships. The literal translation of nunch is "eye-measure". With nunchi, Koreans are usuing non-verbal cues to convey emotion and meaning through various means, including voice pitch and volume as well as intonation. Nunchi  also relies heavily on an understanding of one's status relative to the person with whom one is interacting. Because Korea, as with other high-context cultures caters toward in-groups that have similar experiences and expectations and from which inferences are drawn, many things are left unsaid here. The culture does the explaining, in effect.   

Both Kibun and Nunchi are very difficult concepts for Non-Koreans to get the hand of and we will generally be forgiven for our ignorance of these concepts and consequent rude behaviour, especailly if we are high on the status ladder. However, one gain more than one loses by trying to understandans, as much as possible, behave according to these rules of behaviour.  

Inhwa

Drawing from Confucian beliefs, the term inhwa signifies the Korean approach to harmony. As a collectivist society, consensus is an important element in promoting and maintaining harmony in Korea. To avoid disturbing inhwa, Koreans will often reply with a positive answer and show reluctance to give direct refusals. In Korean business culture this manifests itself in an innate sense of loyalty, employee obedience and courteous and formal behaviour.

Confucianism

Confucianism continues to pervade the consciousness of many Koreans, shaping the Korean moral system, its national laws, and general way of life in Korea, including its business culture. The Korean values of obligation towards others, respect for family, elders and authority, loyalty, honour, and filial piety are all part of its Confucian. Although it is not seen as a religion in this increasingly Christian society and although it is no longer part of the ‘public’ school curriculum, Confucianism still plays an important role in Korean society. Confucian ideas and ideals such as chung or loyalty; hyo or filial piety; in or benevolence; and sin or trust are still part of the cultural fabric and strong elements of Confucianist thought still exist in day-to-day administrative and organisational hierarchies.

Personal Relationships

In Korea, personal relations take precedence over business. In order to be successful, it is vital to establish good, personal relationships based on mutual trust and benefit. Korean business culture is firmly grounded in respectful rapport and in order to establish this, it is essential that you have the right introduction and approach the company through a mutual friend or acquaintance at the appropriate level. Koreans spend a significant amount of time developing and fostering personal contacts. Therefore, time should be allocated for this process, particularly during the first meeting, which is frequently used to simply establish rapport and build trust. Once good, solid relations have been recognised in Korea, continuous reinforcement and maintenance is vital.

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SAUDI ARABIA

A kingdom founded upon and unified by Islam.From its vast deserts and barren plains emerged the monotheistic religion of Islam, the Arab race, and the country’s distinctive Arab culture. Occupying approximately 80% of the Arabian Peninsula, today this south-west Asian monarchy, rich in Arab and Muslim heritage and characterised by a high degree of cultural homogeneity is home to a plethora of successful, oil-rich cities. A sound knowledge of the Kingdom of Saudi Arabia, and in particular, of the cultural background, is essential to an understanding of the principals which have guided the Kingdom’s business development.

Until the discovery of oil, the Kingdom of Saudi Arabia produced very little, and the primary business activity was trading. This merchant culture helped them become shrewd and highly skilled bargainers. However, that does not necessarily mean that they are open-minded.When negotiating business here, realize that people may expect things to be done ‘their way.’

Values and Norms in Saudi Arabia

In a culture where confrontation and conflict are to be avoided, the concept of face is a fundamental issue of daily life. Dignity and respect are key elements in Saudi Arabian culture and saving face, through the use of compromise, patience and self-control is a means by which to maintain these qualities. Arabian culture utilises the concept of face to solve conflicts and avoid embarrassing or discomforting others. In a business context, preventing loss of face is equally important. For instance, your Saudi Arabian counterparts will not take well to pressure that places them in an uncomfortable position which make them lose face.

Islam

In order to comprehend fully the culture of Saudi Arabia one needs to understand the extensive influence of religion on society. Islam remained the primary cohesive ideology in the kingdom, the source of legitimacy for the monarchy, and the pervasive system for moral guidance and spirituality The overwhelming majority of the population of Saudi Arabia are Arabs who adhere to the Wahhabi sect of Islam. Islam, which governs every aspect of a Muslim’s life, also permeates every aspect of the Saudi state. As a result, Arabian culture is often described as detail orientated, whereby emphasis is placed on ethics and expected social behaviour such as generosity, respect and solidarity. These are customs and social duties that also infiltrate the Saudi Arabian business world and affect the way Arabs handle business dealings.The ultraconservative moral agenda appealed on an emotional level to many Saudi citizens. But the desire to expand the jurisdiction of sharia law and to interfere with the banking system was also a source of concern for many people. Because nearly all Saudis have reaped material benefits from state-funded development, people were hesitant to jeopardize those benefits and the political stability that allowed development.

High Context Communication

Saudi Arabia is considered a very high context culture. This means that the message people are trying to convey often relies heavily on other communicative cues such as body language and eye-contact rather than direct words. In this respect, people make assumptions about what is not said. In Saudi Arabian culture particular emphasis is placed on tone of voice, the use of

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silence, facial cues, and body language. It is vital to be aware of these non-verbal aspects of communication in any business setting in order to avoid misunderstandings. For instance, silence is often used for contemplation and you should not feel obliged to speak during these periods.

Doing Business with Koreans

Working Customs in South Korea

■ Before doing business in Korea prior appointments are required and should generally be made a few weeks in advance. The most suitable times to arrange a business meeting are normally between 10am and 12pm or 2pm and 4pm.

■ For both social occasions and business meetings, punctuality is essential. Your Korean counterparts will expect you to arrive on time as a sign of respect; therefore it is advised to call beforehand if you will be delayed. You may find however, that top Korean business executives may arrive a few minutes late to appointments. This is a reflection of their extremely busy and pressured schedule and should not be taken with offence.

■ It is recommended that you send any proposals, company brochures, and marketing material, written in both Korean and English, as a preview for your Korean contacts before you visit the country.

Structure and Hierarchy in Korean Companies

■ Korea is known for its vertical social structure based on age and social status. The organisational arrangement of Korean companies is highly centralised with authority concentrated in senior levels.

■ Influenced by Confucianism, Koreans respect for authority is paramount in their business culture and practices. High-ranking individuals tend to have more power over their subordinates than in the West. Consequently, decision making in Korea will follow a formal procedure in which senior approval is necessary.

Working Relationships in Korea■ Generally speaking, responsibility is delegated to trusted, dependable subordinates by

their superiors. Therefore, it is imperative not to offend or ignore the lower ranks and to show the various managers the same respect as other senior levels.

■ Age is the most essential component within a relationship in Korea. A person older than you automatically holds a certain level of superiority. This is particularly evident in Korean business settings.

■ Personal ties in Korea, such as kinship, schools, birthplaces etc, often take precedence over job seniority, rank or other factors, and have significant influence over the structure and management of Korean companies.

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Business Customs in Korea

■ The exchange of business cards in Korea is vital for initiating introductions. Korean’s prefer to know the person they are dealing with. Therefore, it is important to emphasise your title so that the correct authority, status, and rank is established. It is advised to have the reverse side of your card translated into Korean. Cards should be presented and accepted with both hands and must be read and studied with respect and consideration before placing them on the table.

■ Gift-giving is a common practice within Korean business settings. Generally given at the first business meeting, gifts are often used to acquire favours and build relationships. You should allow the host to present his gift first and be sure to accept the gift with both hands. To avoid loss of face, gifts of similar value should be exchanged and gifts of greater value should be given to the most senior person respectively.

■ Like most Asian countries, Koreans believe that contracts are a starting point, rather than the final stage of a business agreement and prefer them to be left flexible enough so that adjustments can be made. Although many Koreans now appreciate the legal implications regarding the signing of contracts, they may still be interpreted as less important than the interpersonal relationship established between the two companies. It is vital that you are aware of how your Korean counterparts view these documents in order to avoid any possible misunderstandings.

■ When meeting your Korean counterpart for the first time, always wait to be introduced as third party introductions are generally preferred. Today, it is quite common for Koreans to shake hands with foreign colleagues after a bow, encompassing both cultural styles. To show respect during handshaking, you should ensure that you support your right forearm with the left hand. When departing, a bow is usually sufficient.

Doing Business with Saudi Arabians

Working Customs in Saudi Arabia

■ Generally speaking, business appointments in Saudi Arabia are necessary. However, some Saudi business executives and officials may be reluctant to schedule an appointment until after their visitors have arrived. Appointments should be scheduled in accordance with the five daily prayer times and the religious holidays of Ramadan and Hajj. It is customary to make appointments for times of day rather than precise hours as the relaxed and hospitable nature of Saudi business culture may cause delays in schedule.

■ The Saudi working week begins on Saturday and ends on Wednesday. Thursday and Friday are the official days of rest. Office hours tend to be 0900-1300 and 1630-2000 (Ramadan 2000-0100), with some regional variation.

■ The concept of time in Saudi Arabia is considerably different to that of many Western cultures. Time is not an issue; therefore Saudi Arabians are generally unpunctual

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compared to Western standards. Despite this, it is unusual for meetings to encroach on daily prayers and you will be expected to arrive at appointments on time.

Structure and Hierarchy in Saudi Arabian Companies

■ There exists a distinct dichotomy between subordinates and managers within Saudi Arabian companies. Those with most authority are expected and accepted to issue complete and specific directives to others.

■ Age plays a significant part in the culture of Saudi Arabia. For this reason, greater respect must be shown to elders at all times. When first entering a room for example, or greeting your Saudi counterparts for the first time, you should shake hands with the most senior person first.

Working Relationships in Saudi Arabia

■ Saudi Arabian business people prefer face-to-face meetings, as doing business in the Kingdom is still mostly done against an intensely personal background.

■ Establishing trust is an essential part of Saudi business culture; therefore cultivating solid business relationships before entering into business dealings is key to your success.

■ Respect and friendship are values that are held very highly by the Arab people. In a business setting, favours based on mutual benefit and trust are ways of enhancing these cultural values.

Due to the personal nature of business in Saudi Arabia, family influence and personal connections often take precedence over other governing factors.

Business Customs in Saudi Arabia

■ The customary greeting is “As-salam alaikum,” (peace be upon you) to which the reply is “Wa alaikum as-salam,” (and upon you be peace). When entering a meeting, general introductions will begin with a handshake. You should greet each of your Saudi counterparts individually, making your way around the room in an anti-clockwise direction. However, it is generally uncommon for a Muslim man to shake hands with a woman therefore; it is advisable for business women to wait for a man to offer his hand first.

■ Business cards are common but not essential to Saudi Arabian business culture. If you do intend to use business cards whilst in Saudi Arabia ensure that you have the information printed in both English and Arabic.

■ Initial business meetings are often a way to become acquainted with your prospective counterparts. They are generally long in duration and discussions are conducted at a leisurely pace over tea and coffee. Time should be allocated for such business meetings, as they are an essential part of Saudi Arabian business culture.

■ Gift giving in Saudi Arabia is appreciated but not necessary. Gifts are generally only exchanged between close friends and are seen as rather personal in nature. It is also advised to refrain from overly admiring an item belonging to another, as they may feel

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obliged to give it to you. In the event that you are offered a gift, it is considered impolite and offensive if you do not accept it.

Statistics About Some Indicators in Both Counties:

South Korea

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Saudi Arabia

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Business Etiqette

Korean Business Etiqette (Do’s and Don’ts)

DO maintain an element of modesty and humility as these aspects are extremely important in Korean culture. With this in mind, you must try to avoid over-selling previous business achievements.

DO make direct eye-contact when addressing Korean businessprofessionals, as it is important to indicate your honesty and interest. However, some Koreans do not make eye-contact for any length of time when in the presence of an authority figure as a sign of respect.

DO refrain from being overly impatient. The decision making process in Korea is often done collectively and will therefore require more time.

DON’T address a Korea by his or her given name as it is considered extremely impolite Korean names begin with the family name and are followed by a two-part given name. The correct way to address a Korean is with Mr, Mrs, or Miss together with their family name. You should address your Korean counterparts using appropriate titles until specifically invited to do otherwise.

DON’T display criticism in public. It should be conducted in private where loss of face will be diminished. In a similar vein, opposing someone directly can also cause a Korean to lose face and should be avoided.

DON’T use large hand gestures or facial expressions. Talking or laughing loudly is also considered impolite in Korean culture.

Saudi Arabian Business Etiquette (Do’s and Don’ts)

DO address your Saudi Arabian counterparts with the appropriate titles Doctor, Shaikh (chief), Mohandas (engineer), and Ustadh (professor), followed by his or her first name. If

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unsure, it is best to get the names and correct form of address of those you will be doing business with before hand. The word "bin" or "ibn" (son of) and “bint” (daughter of) may be present a number of times in a person’s name, as Saudi names are indicators of genealogy.

DO abide by local standards of modesty and dress appropriately. As a sign of respect, it is essential to wear the proper attire during business meetings in Saudi Arabia. For men, conservative business suits are recommended. Women are required to wear high necklines, sleeves at least to the elbow, and preferably long skirts below the knee. DO maintain strong eye-contact with your Saudi counterparts and expect a closer distance during conversation in both business and social settings. Both forms of communication are ways in which to strengthen trust and show respect in Saudi Arabia.

DON’T appear loud or overly animated in public. This type of behaviour is considered rude and vulgar. It is important to maintain and element of humility and display conservative behaviour at all times.

DON’T rush your Arabian counterparts during business negotiations.Communications occur at a slower pace in Saudi Arabia and patience is often necessary.

DON’T assume during business meetings that the person who asks the most questions holds the most responsibility. In Saudi Arabia this person is considered to be the least respected or least important. The decision maker is more often than not a silent observer. For this reason, if you are in a business meeting, it is advised not to ask all the questions

Women In Busıness

Women in Business in South Korea

By Western standards, the role of women in society is distinctly inferior to that of men. It is rare for women to succeed in business in Korea and most women work as secretaries or in poorly paid assembly line positions. It is generally expected that women will leave work on getting married or having children.

Although foreign women will be accepted and possibly expected as part of a visiting delegation, it could be frustrating when senior female team members' views are ignored and younger, less senior male colleagues are paid both deference and respect. Be prepared for this situation and plan your strategy accordingly.

Foreign women may have difficulty doing business in Korea. Although women are becoming more accepted in the Korean businessplace, Korean men generally prefer to negotiate with men. Korean women seldom shake hands. A Western woman can offer her hand to a Korean man, but should not to a Korean woman.

Foreign businesswomen should always act elegant, refined and very "feminine.” Laughing and loud talking are frowned upon. Generally, women wait for Korean men to make the first move

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Women in Business in Saudi Arabia

Women play little role in public life in Saudi and have virtually no role to play in the business world. It is, therefore, very difficult for women business travellers to achieve a great deal in the country - even if they are granted a visa. The constitution of any delegation sent to Saudi on business needs very careful consideration and the normal western concerns on selection through achievement, track record and technical ability may not be appropriate.

Any women visiting on business needs to be very conservative in both their dress code and behaviour.

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REFERANCES

http://www.communicaid.com/

http://www.doingbusiness.org/ExploreEconomies/

www.executiveplanet.com

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