360° Coverage : How To Close A Deal In The Middle East

2 Updates
How To Close A Deal In The Middle East
Photo Credit: Forbes Business

How To Close A Deal In The Middle East

Apr 3 2014, 10:41pm CDT | by

Investing in long-term liaisons is key to forging successful business relationships in the Arab Gulf. By Andrew Shipilov, INSEAD Associate Professor of Strategy Taking the time to get to know...

Filed under: news

 
 
 

21 weeks ago

How To Close A Deal In The Middle East

Apr 3 2014, 10:41pm CDT | by

Investing in long-term liaisons is key to forging successful business relationships in the Arab Gulf.

By Andrew Shipilov, INSEAD Associate Professor of Strategy

Taking the time to get to know potential business partners in the Middle East, is more than just courtesy. It is an intrinsic part of the region’s deal-making and can help novices to the region navigate the complex web of customs, regulations and customer/supplier relationships.

How can I develop business relationships in the Middle East? Is networking in Dubai different from networking in Abu Dhabi? These questions were raised during a panel discussion I recently moderated in Dubai as a part of an INSEAD networking conference (which included the Middle Eastern launch of my book “Network Advantage: How to Unlock Value from Your Alliances and Partnerships”).  The discussion involved INSEAD MBA students and senior business leaders from the U.A.E., including Mishal Kanoo (Deputy Chairman of the Kanoo Group), Gary Chapman (President of Group Services & dnata, The Emirates Group), Nicholas Clayton (CEO, Jumeirah Group), Mansour Hajjar (Managing Director, Chalhoub Group), Robin Mills (Head of Consulting, Manaar Energy) and Constantin Salameh (CEO, Al Ghurair Investment).

While business networking among customers, suppliers and competitors is important around the world, it is particularly so in the Middle East where local business partners want to learn about you as a person before they contemplate any deal-making.

One panelist reflected on a situation where a Western colleague posed the question “How many cups of coffee does it take to close a deal in the Middle East?” The answer was “As many as it takes!”

Companies in the Middle East, and especially in the U.A.E., are eager to do business with the West, but Western businessmen need to be sensitive to the Emiratis’ need to deeply understand their partner’s motivations. Some Western companies try to enter the region for short-term gains and are ready to exit quickly. These are precisely the partners whom the local business people want to avoid.

To the Emirati community, investing in long-term relationships is key to successful business. One panelist reflected on several instances where his company, the leading purveyor of luxury brands in the region, turned down offers of collaboration from partners who did not show deep commitment to staying in the relationship over the long-term. In doing so his firm showed it was prepared to forego very attractive contracts and the likelihood of short-term profits without the promise of lengthy collaboration.

The panelists noted that business people from Northern Europe (Scandinavia and perhaps Germany) were more likely to fall into the trap of cutting the networking part short and going straight to business and were less willing to invest in a long-term relationship.  Southern Europeans on the other hand (presumably Italians and Greeks) often found it easier to understand the region’s long-term focus on networking. Having said this, one should not assume Emirati businesses are slow in decision-making. Once trust is built, local partners make decisions very quickly and will open doors to many opportunities in the region.

It is also not correct to assume that people network the same way across the Middle East. One panelist noted the significant differences between networking in Dubai and Abu Dhabi, two UAE cities separated by a 150km stretch of highway. In Abu Dhabi, the business community places a much stronger emphasis on the establishment of long-term relationships. Here one should expect to make an even greater investment (in terms of time, effort and, yes, drinking coffee) in getting to know a prospective business partner before any deals are struck.

My own reflection suggests a very short-term orientation for doing business in the region is perilous in another respect. The local business community has a lot of wisdom when it comes to navigating complex relationships among buyers, suppliers and competitors, and they can offer advice on the relative merits of different local business partners. This can give the newcomer a good perspective of the region’s social landscape. It’s a shame to fall into the temptation to short-change such potentially valuable insights obtained through long-term relationship building and go straight to business.  And, yes, the Arabic coffee, coupled with marvellous local sweets, is a great complement to a thoughtful discussion among (prospective) partners.

This article was originally published at INSEAD Knowledge.

 
Update
2

4 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) an ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

5 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 a ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Watch your diet to reduce diabetes risk
London, Sep 3 (IANS) What you eat and drink, and not just the number of calories, is a significant factor in diabetes risk, a study showed.
 
 
2016 NASA asteroid mission awaits your messages
Washington, Sep 3 (IANS) NASA has invited the public to submit short messages and images on social media that could be placed in a time capsule aboard a spacecraft to be launched in 2016 for an asteroid study.
 
 
Exercise can stem frequent night urination in men
New York, Sep 3 (IANS) Men who are physically active are at lower risk of nocturia - waking up at night to urinate, says a study.
 
 
Nippon Life keen to hike stake in Reliance Life
Tokyo, Sep 3 (IANS) Nippon Life Insurance of Japan wants to hike its stake in its Indian joint venture Reliance Life Insurance to 49 percent from 26 percent, when India notifies the decision of higher foreign equity cap in the sector, a news report here said.
 
 
 

Latest from the Network

Watch your diet to reduce diabetes risk
London, Sep 3 (IANS) What you eat and drink, and not just the number of calories, is a significant factor in diabetes risk, a study showed. Losing weight may be good but not enough to prevent Type 2 diabetes as...
Read more on Celebrity Balla
 
35 militants killed in Afghanistan
Kabul, Sep 3 (IANS) At least 35 Taliban militants have been killed in fresh military operations across Afghanistan, the interior ministry said Wednesday. The Afghan National Security Forces (ANSF) carried out...
Read more on Politics Balla
 
Vince Vaughn for The Politician?
Vince Vaughn is set to star in 'The Politician'. The 'Wedding Crashers' star is attached to take on the lead role in the upcoming Columbia comedy about a scandal-hit politician, according to The Hollywood Reporter. The...
Read more on Movie Balla
 
910 militants, 82 soldiers killed in North Waziristan
Islamabad, Sep 3 (IANS) At least 910 militants and 82 Pakistani soldiers have been killed in operation Zarb-i-Azb in North Waziristan, the military said Wednesday. The statement issued by the Inter-Services Public...
Read more on Politics Balla
 
'Headscarf instils positive body image in British Muslim women'
London, Sep 3 (IANS) British Muslim women who wear a hijab (headscarf) generally have a more positive body image, are less reliant on media messages about beauty ideals and place less importance on appearance than...
Read more on Celebrity Balla
 
Console games new threat to global climate: Study
New York, Sep 3 (IANS) Console games downloaded over broadband internet are causing more greenhouse gas emissions than Blu-ray discs delivered via retail stores, new research reveals. It is not always true that...
Read more on Celebrity Balla
 
Human greed driving species towards extinction: Study
Washington, Sep 3 (IANS) In a disturbing trend, scientists have reported that species are becoming extinct as much as 1,000 times more frequently - 10 times worse than the previous estimates - owing to human population...
Read more on Politics Balla
 
Kelly Brook's traumatic childhood
Kelly Brook has opened up about ''violent and horrific'' memories from her childhood. The 35-year-old actress has revealed that although she enjoyed some aspects of growing up on a council estate in Kent, South East...
Read more on Celebrity Balla
 
Emmy Rossum not 'easy'
Emmy Rossum insists she's not ''easy'' like her 'Shameless' character. The 27-year-old actress stars as Fiona Gallagher in the US remake of the hit series and she's revealed that although she's had sex on a first date,...
Read more on Celebrity Balla
 
2016 NASA asteroid mission awaits your messages
Washington, Sep 3 (IANS) NASA has invited the public to submit short messages and images on social media that could be placed in a time capsule aboard a spacecraft to be launched in 2016 for an asteroid study. Called...
Read more on Apple Balla