Tips on negotiating with the UAE
Once a raw and untouched economy. Now, the UAE is bursting with business and investment opportunities. Despite the global economic slowdown, its economic has doubled over the past decade. That growth has attracted foreign investors – doubling its foreign direct investment.
Entering this world of business opportunities requires an understanding of their logistics and supply chain management. That includes transportation forms such as ocean freight. But first, you need to understand their business style.
Doing business in Arab countries can be complicated, and the UAE is no exception. Negotiating with them can prove tricky if you don’t understand their culture.
Negotiating with the UAE
In this post, we present you tips on negotiating with the UAE from José Diego Manzanera. He’s a renowned expert in international trade in the Middle East and CEO of Gulf Business Consulting & Strategies. He has also been the Commercial Director of the Spanish World Trade as well as the Qatari Managing Partner of European Consultants in Qatar, where he advised international private companies on strategy and business development.
1. What cultural aspects influence the outcome of negotiations with the UAE?
Gaining your partner’s trust is highly recommended and this should be done right from the get go. A good strategy includes showing concern and asking about his health, family, favorite sports or hobbies. All this before entering into any business-related topics!
Keep their religious beliefs in mind and respect them. Islam is deeply rooted in the UAE and forms a huge part of their daily private and business lives.
Dress modestly. This is important throughout the entire Middle East region in general. It applies more for women but for men as well, especially if you want to present a good impression. Safest option: formal and professional.
The Emirates has a rather relaxed approach to business meetings. It’s not uncommon for them to arrive late. But given that, it’s important that you do not carry the same relaxed attitude. As westerners, we have a reputation of being punctual and they do expect us to show up on time. Expect refreshments such as coffee, tea, and sweets at meetings. Accept whatever they offer you. It is generally a good rule to go by or you may offend them. Remember to be gracious and thank them for their food and hospitality.
2. What differences are there in interpersonal communication between the Western and Arab culture?
Both cultures have a rather carefree style of communication. The difference, however, comes in the social model. For example, Spaniards are more flexible and open in terms of social norms. On the other hand, Arabs are generally more socially conservative and follow a certain linguistic ‘ritual’.
When it comes to physical distance, Westerners tend to be closer to each other when interacting. The Arabs prefer to keep their distance.
3. What’s key to success when negotiating with the UAE?
Just like any international market. there are determining factors that can make or break a business deal in the UAE. Some things to keep in mind include:
- Be flexible. Have the ability to adapt and be flexible. It’s essential when negotiating. You should have a clear strategy. But one with enough flexibility to allow for changes without losing your business objective.
- Be consistent. Stay close. The constant and continual monitoring of business operations in Arab countries is fundamental to achieve results. For us, this may appear intrusive and annoying. But it’s normal for the Arabs.
- Be friends. Not business partners. In a traditional society such as the Arab, family values and friendships are vital. These personal relationships often take precedence over commercial ties. Whenever possible, try to establish a personal bond with your Arab partners/clients. Don’t forget to nurture and maintain them.
- Be patient. The UAE’s and the Arab’s sense of time differs largely from that of the western world. In the UAE, everything proceeds at a much slower pace. Expect decision-making to take longer than what you’re used to. It’s not uncommon for companies to get frustrated and discouraged and give up. Those who comprehend and are prepared for this will succeed in negotiating with the UAE.
4. Are there any Arabic business tactics that may put off Western negotiators?
Haggling forms a big part of the Middle Eastern culture. There’s a strong sense of pride and dignity in being able to settle on the best possible prices. However, many Western companies misunderstand this. They have the impression that Arabs will fight tooth and nail to get the lowest price. But that’s not the case. What they really value is the sensation of having successfully negotiated the best deal.
Sometimes, small gestures go a long way when negotiating with the UAE. Offering a small discount or added incentives can help trigger that sense of success in Arabs. That said, companies can consider slight price increases after taking this into account.
5. What some of the most common mistakes committed by Western companies?
In my opinion, when it comes to dealing with the Emirates market, their main mistake is being too anxious. That is, anxious for the quick closure of the deal. The Arabs measure time differently in the Emirates. Two ingredients to guarantee success on their turf: have the right attitude and patience.
Not understanding this cultural difference, having a rigid strategy and short-term objectives will send your deal tumbling. They significantly undermine your chances of reaching a successful agreement.
6. Are there any cultural stereotypes that may affect negotiations?
The false belief that everything is handled and sold quickly and efficiently in a rich country such as the UAE. This theory could not be more wrong. It exhibits a lack of experience in the Emirates market on your side. It also shows that you probably got these ignorant views from the media’s portrayal of Arabs and their petrodollars. The luxurious images of the Emirates you see on TV or a short trip there without fully immersing yourself in the culture can often cloud your judgment of Arabs.
7. What basic rules and norms should be respected with negotiating with the UAE?
Prepare to make concessions from the get go. Make sure you appear flexible with the operating margins. When signing the contract, ensure that obligations are clear on both sides. This prevents any misunderstandings that may arise in the future. Verbal agreements should always be reflected in writing.
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