The Changing Business Environment in the Kingdom of Saudi Arabia

The business environment is going to change dramatically. One of the changes will involve the adoption and integration of technology. Technology is increasingly becoming a key tool in business and organizations are actively seeking to fill technological gaps within them and are thus competing for available technological resources and manpower (Laudicina, Peterson, & McCaffrey, 2018). Another change is the shift in power and markets. China is fast becoming a major player in the business environment, and a lot of business is going to shift towards that side. Lastly, businesses are going to compete more actively in the global business market due to technological advancements. 

Some of the challenges firms in KSA are going to face include competition for technology and tech-savvy personnel. In this line also, businesses in Saudi Arabia are going to face problems adopting and integrating technology within them. There will also be increased business competition globally and locally aided by technology advancement which could push some of the firms out of business if they are unable to keep up.

Firms will need to adopt strategies that allow them to compete favorably in the local and international markets. As noted, some of the things they will have to do include adopting technology and integrating it into their daily business. This is going to require a strategy that will allow the change to be affected. This will be characterized by an emergent strategy where the leaders make decisions on emerging-needs-basis (Grant, 2016). The managers will need to think and act appropriately to ensure the change. Currently, there are companies with enabling structures in areas such as the right personnel and culture to allow a shift to a more technological organization.

Change is going to be needed in all areas of the organization. The organization structure will have to be reconfigured to include new personnel and technologies. The organizational culture and management systems will have to change to accommodate new developments. Leadership is going to play an important role in doing this and, therefore, the leadership style should change more to a transformative and collaborative style. 

References 

Grant, R. M. (2016). Contemporary Strategy Analysis 9E, Text and Cases Edition. Wiley.

Laudicina, P. A., Peterson, E. R., & McCaffrey, C. R. (2018). Competition, Disruption, and Deception. Retrieved from https://www.atkearney.com/web/global-business-policy-council/global-trends/2018-2023.

The Changing Business Environment in the Kingdom of Saudi Arabia

Government-controlled enterprises in Saudi Arabia are increasingly introducing local content requirements for foreign firms.  Aramco’s “In-Kingdom Total Value Added” program, for example, strongly encourages the purchase of goods and services from a local supplier base and aims to double Aramco’s percentage of locally-manufactured energy-related goods and services to 70 percent by 2021.  Saudi Arabia’s military is reforming its procurement processes and policies to incorporate new Saudi employment and localized production goals.  The SAG’s Vision 2030 program calls for 50 percent of defense materials to be produced and procured locally by 2030, and simultaneously seeks comparable increases in the number of Saudis employed in this sector.

Saudi Arabia continues to move toward adherence to a single standard, which is often based on International Organization for Standardization (ISO) or International Electrotechnical Commission (IEC) standards, in technical regulations to the exclusion of other international standards, such as those developed by U.S.-domiciled standards development organizations (SDOs).  Saudi Arabia’s exclusion of these other international standards, which are often used by U.S. manufacturers, can create significant market access restrictions for industrial and consumer products exported from the United States.

Reference 

Saudi Arabia-Market Challenges retrieved from https://www.export.gov/article?id=Saudi-Arabia-Market-Challenges

Performance and localization requirements retrieved from https://www.export.gov/article?id=Saudi-Arabia-Market-Challenges