Java Lounge

Issue Identification

Saudi Arabia is a country that is living in a cultural dichotomy. The country is dominated by strict adherence to its Muslim faith. The national government is based on the principles in the Qur'an (translated as Koran in English) and their adherence to Shari'ah (sacred law of Islam). (Royal Embassy of Saudi Arabia, 2010) They are bound by 1,400 years of deep religious and cultural beliefs. In contrast the nation is developing a modern and more western identity. Saudi Arabia has a population of 20 million native residents and over 6.5 million expatriates. This means that 1 of every 4 people are bringing a new cultural view to this Islamic nation. Technology is likewise bringing the outside world into this conservative society. Additionally, the great wealth of the country allows many people the ability to travel, further influencing their beliefs. Such growth inevitably creates a desire for more western luxuries. The Saudis are demonstrating the same desires that are created by new wealth similar to any western nation. Clothes, jewelry and other luxury items are finding their way into the lives of many citizens. However, this expression of wealth is closely guarded and often forbidden by the traditional Islamic laws.

It would appear the country is eager to accept new, upscale restaurants similar to the Java Lounge. This western style establishment would fit equally well in Europe or the United States. They cater to Saudis who desire more affluent surroundings. However, unlike other European or United States restaurants they must straddle the boundary of traditional societal values and modern business. The Java Lounge must deal with this contradictory social environment. They must fulfill the same requirements of any successful business. The restaurant provides both a service and a product that is desired by the customer base while respecting the community traditions.

The Java Lounge carefully balances between fulfilling a customer need and societal restrictions. The restaurant adheres to the rules that dictate when and how both men and women can patronize the establishment. Men unaccompanied by women or families are restricted to the upstairs portion to the restaurant and are not permitted in the restaurant in the evenings. Segregating customers in most western countries is illegal; however, it is required in this and other Islamic nations. Turning away customers is rarely a viable business strategy in other countries, but is a necessity in Saudi Arabia.

Like any business the Java Lounge has expectations of obtaining reasonable success. Doing this requires not just a quality product, but also a satisfied customer base. Keeping ahead of the competition is a challenge for restaurants in almost any region of the world. It becomes particularly difficult in a nation that has strict social codes of contact that limit who may enter your business, the times they can attend and the customs that must be followed. The Java Lounge wisely located the business in the port city of Jeddah. This city is frequented by many foreign visitors and has a somewhat more relaxed interpretation of Islamic Law. The citizens of the city tend to be well traveled, affluent and have a desire for upscale destinations. While the restaurant currently enjoys success they must be ever vigilant watching the social trends of the country.

Frame Work

The Java lounge is attempting to straddle the line between traditional Saudi culture and new affluent customers. In a culture that requires strict observance to Muslim law the owners of the new Java lounge must find a way to attract customers who are looking for a more up scale and modern social environment. In a country that has very traditional views, acceptance of a new lounge could face significant social reluctance. However, the company has chosen the city of Jeddah for their business location. Here they will have expose to more foreign business travelers and the city has generally more progressive social view.

The influx of foreign business in the city could be one element of success for the restaurant. Saudi business follows a significantly different approach as compared to western style meetings. In Saudi business, 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. (Communicaid, 2009) Such customs and business practices could be a significant source of income for the start up Java Lounge, as there is a need for such business venues.

Saudi culture and business exist in a kind modern paradox. The country is a major part of the world business environment mostly due to the vast oil reserves of the nation. They are also one of the most receptive countries into the Middle Eastern market place for western business. The country has thousands of years of culture and social standards and at the same time they have entered into the modern era of politics and commerce. In this new environment there seems to be an opportunity for start up companies as long as they can blend old customs with modern needs.

Implications

According to the Doing Business 2011 Report, the United States and Saudi Arabia rank 5th and 11th respectively for ease of doing business out of the 183 economies analyzed (The International Bank for Reconstruction and Development & The World Bank, 2011a). However, enforcement of contracts is still problematic with Saudi Arabia ranking 140 out of the 183 economies analyzed for ease of enforcing contracts (The International Bank for Reconstruction and Development & The World Bank, 2011c).

Studies have indicated that Saudi Arabia has a "fairly homogeneous" culture (Idris, 2007). Saudi Arabia's culture has business and legal implications because the Muslim faith infiltrates all decisions and significantly impacts businesses (Idris, 2007). An understanding and appreciation of the culture in Saudi Arabia is imperative to penetrating and thriving in the business and legal environment.

One approach to understanding culture is to review managing cross-cultural literature prior to engaging in any international business venture. Dr. Geert Hofstede's model serves as a cultural guide to understanding intercultural differences and synergies by considering the five cultural dimensions of power distance, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, and short-term orientation vs. long-term orientation.