Saudi Arabia’s Reforms Enduring Stability


The case study “Saudi Arabia: Modern Reform, Enduring Stability” by Vietor and Forrest presents a comprehensive review of social, economic, political, and cultural spheres of modern reforms in Saudi Arabia. These changes were proposed or implemented to endure sustainability in the face of global and regional economic hurdles, rising unemployment, and depleting oil reserves. This paper explores the case study to establish the possibility of regional development void of westernization. The report also carries out a comparative analysis of global management practices in the view of the business life cycle in Saudi Arabia. The paper concludes by exploring Saudi Arabia’s role in business sustenance in the Middle East.

Developed Minus Westernization

From the case study, it is evident that countries of the Arabian Peninsula have Islam as the national religion (Vietor & Forrest, 2009). Despite the variances in belief systems and foundations in clerical prepositions, the underlying foundation of these religious affiliations is based on the Koran and teachings of Prophet Mohammed. For instance, 90% of the Saudi citizens are Muslims who believe in religion as the guiding principle for social, economic, and cultural development (Vietor & Forrest, 2009). Moreover, the structure of governance in this region is heavily influenced by the Islamic faith. Specifically, the Saudi royal family survives due to its influence and custody of the Islamic holy city. Therefore, from a religion-based reform agenda perspective, it is possible to transform the status of the Arabian Peninsula to ‘developed’ since the growth strategies are directed towards the conservative Islamic faith. For instance, Saudi Arabia and Qatar are fast approaching the status of developed countries despite deriving their political, economic, and social policies from the Sharia laws.

The controlled democracy and population empowerment, which is the focus of the Islamic faith, have created economic and social stability needed for the Arabian Peninsula states to gain the status of ‘developed.’ For instance, the ‘Saudiarization’ reform agenda is angled towards the Islamic faith but has been effective in encouraging the youthful population to engage in gainful economic activities within Saudi Arabia (Vietor & Forrest, 2009). In addition, the Arabian Peninsula has integrated the conservative Sharia laws to create a strong regional economic bloc to take care of different business interests needed for an economic transformation (Vietor & Forrest, 2009). As a result, Saudi Arabia and other Arabian Peninsula countries have been able to experience substantial economic growth that is predicted to result in complete development.

Global Management Practices vs. Saudi Arabia Business Life Cycle

The Saudi Arabia business life cycle is heavily reliant on the oil economy and internal decision processes inclined towards political agenda. For instance, more than 80% of the country’s development revenues are generated from the oil sector (Vietor & Forrest, 2009). This means that business decisions are informed by the market dynamics affecting this precious commodity. Moreover, the political class makes all the decisions that affect the economic, social, and other business environments. In contrast, global management practices are followed by different professionals on behalf of the political class (Vietor & Forrest, 2009). Moreover, global practices are flexible. For instance, unlike Saudi Arabia where the royal family controls the business decision-making process, global practices are controlled by facts or data on the basis of a need to be addressed.

Another notable difference between the Saudi Arabian business life cycle and global management practices is the overdependence on religion and conservative thinking. In Saudi Arabia, any major decisions that would affect the business environment must conform to the Sharia laws or Islamic teachings as part of protecting the legitimacy of the royal family (Vietor & Forrest, 2009). This means that the current business environment cannot operate without religious indoctrinations that might not result in optimal performance. In contrast, global management practices are based on the prevailing market dynamics and are flexible to modification on the basis of proven best practices. As a result, the business life cycle in Saudi Arabia is not flexible to changes in the market dynamics.

The two business practices, that is, the Saudi Arabian cycle and global management principles are angled towards sustainable development and robust economic growth. For instance, the Saudi Arabian business cycle is a contingent of viable holistic, diverse, and development inspired economic policies focused on the short and long-term gains. Examples of these policies include Saudiarization, market liberalization, diversification, and reduced macroeconomic interventions (Vietor & Forrest, 2009). These traits are similar to global management practices. Moreover, the two practices are focused on regional integration to guarantee more extensive market coverage for business sustainability. The Saudi Arabian business cycle is regional rather than domestic and aims at gaining from the external market and creating a strong bloc with the neighbors within the Arabian Peninsula, the US, Europe, and other regions (Vietor & Forrest, 2009). The same principles are applied in global management practices.

Economic Stability and Social Responsibly

Acting as the headquarters of the Islamic religion, Saudi Arabia has the social responsibility of uniting the Middle Eastern bloc to sustain the Sharia-based socio-cultural fabric. This social responsibility goes beyond being a custodian of the holy temple in Mecca, but to uniting the region in sharing common goals that are consolodated by same faith (Vietor & Forrest, 2009). Moreover, Saudi Arabia has the role of a goodwill prefect in the Middle East to avoid anarchy or arrest extremist, which is a threat to regional stability. For instance, Saudi Arabia has brokered successful peace deals with Iran to divert the confrontation with Iraq. As the military leader, Saudi Arabia has the role of preventing Iran from interfering with its neighbors since the consequences of such confrontations will spill into its borders.

Saudi Arabia has a strong position in the Middle East from an economic stability perspective. As the largest economy in the region, it has to continuously ensure healthy competition and economic partnerships with the neighbors for long-term financial sustainability. For instance, the GCC bloc’s survival and economic impact are dependent on the support of Saudi Arabia because of its vast economy (Vietor & Forrest, 2009). Moreover, Saudi Arabia is strategically located as an economic hub connecting the Middle East region. Thus, the economic stability translates to sustainable domestic and regional market. In addition, the strong economic influence Saudi Arabia has over other Arabian Peninsula countries can only be sustained through positive and healthy economic practices or policies that are favorable to the internal and external markets.

Conclusion

The case study ‘Saudi Arabia: Modern Reform, Enduring Stability’ highlights the development reforms by Saudi Arabia in its bid to acquire the status of the ‘developed’ country. Apparently, Saudi Arabia has experienced vast economic transformation with minimal Westernization. Saudi Arabian business lifecycle is characterized by conservative, Sharia-based, and politically motivated economic practices as compared to the open, multidimensional, and flexible global management practices. Due to its strategic location, Saudi Arabia has social and economic stability as the central business and religion hub in the Middle East region.

Reference

Vietor, R. H., & Forrest, N. (2009). Saudi Arabia: Modern reform, enduring stability. Harvard Business School, 9, 1-27.