Doing Business in the Muslim World? Understanding the Culture is Crucial

5 November 2014

Often, when planning for an international expansion, a business focuses on the variables that can easily be put on paper: cash reserves, tax structures, market size. But the best-laid plans often go awry when you fail to account for factors like cultural differences that can’t be so easily captured. This is especially true in the Muslim world, where U.S. business travelers frequently find themselves bewildered by cultural misunderstandings.

There are 1.6 billion Muslims, about a quarter of the world’s population, and Muslim countries stretch from Eastern Europe into Africa, across the Middle East and Central Asia, all the way to Southeast Asia. So, the reliability of any generalization about doing business in the Muslim world is going to vary considerably from country to country, and even from situation to situation. Nonetheless, there are some general guidelines that can help you better navigate business situations in Muslim societies.

Cultural differences can present straightforward logistical issues: Most Muslim countries have Thursday-Friday or Friday-Saturday weekends. But the more complex aspects of culture present the real challenge. Here are a few tips on broad cultural differences you may have to navigate:

Power:  In the Muslim world, power is largely ascribed, meaning that people can often reach high places by virtue of their birth and social position. As a result, a person’s title or level of influence may seem incongruous with their accomplishments or experiences.

Community: There is an obligation to the community. Muslim societies are usually "we" societies, so people's role in the society is respected and the group takes precedence.  This affects performance management in particular because it is seen as unfair to reward one person.

Rules: They don’t apply to everyone! Try not to assume that the written rules governing any scenario are the final authority. Instead, refer to existing business practices and trusted guides in navigating business transactions. 

Communication: Verbal communication is not direct. People get their points across in long, winding stories, and being direct is seen as rude. In negotiations, don’t take the “let’s cut to the chase route.” Careful listening and patience will yield valuable information — especially if you’re able to interpret the message.

A Note on Islamic Finance: Finance that complies with Sharia law can vary dramatically from Western notions of finance. While some Muslim businesspeople have adopted interpretations of Sharia law that are more compatible with Western practices, don’t be surprised if you encounter resistance to certain types of financial arrangements. Most importantly, Muslim finance takes the concept of fairness very seriously, and charging interest is considered unfair, although in practice that rule is not absolute. Speculative finance is also considered unethical, so you’re likely to encounter resistance to instruments like options and futures.

Being culturally attuned to a host society is an important, and often overlooked, aspect of any international expansion. In the Muslim world, it can be make-or-break, so build it into your plans.