Saudi Arabia Analysis Essay
1. What are some current issues facing Saudi Arabia? What is the climate for doing business in Saudi Arabia today? Well the to answer the first part of the question I would say that infrastructure is one of the big issues in Saudi Arabia. Most of the towns they have are as old and out dated. Also the old pipes in the city, the bad water works, terrible electricity, a lot of phone lines are not being updated enough to accommodate the growth of population and business there. For the second part of the question I would say over all a bad climate for business.
Reasons being that Saudi Arabia has been accused over time that they are taking part in terrorist’s activities. This does not mean that they are, but the bad publicity hurts them for attracting new business. Just from reading this small case that another reason that climate is bad in Saudi Arabia is that they do not seem to be as trustworthy. Just from the last couple paragraphs in the case it seems that they say things that are not accurate just to gain the things that they want. Also a trait they seem to have is that they are okay with being paid off to give certain companies contracts, Skyblue for example.
2. Is it legal for Auger’s firm to make a payment of $100,000 to help ensure this contract? I think that Auger giving payment of $100,000 dollars to help ensure this contract is not legal in a business sense. I do not know this for sure but it seems that this type of “bribe” the minister has done before so it might have just become socially acceptable to put in words. But, as for an action being done in the United States this is something that would not even come to mind in a business world. I feel that is not fair to other companies when others use money to win contracts, I feel that it over-looks the companies that actually do good business instead of the companies that are not good, they just have money.
3. Do you think other firms are making these payments, or is Auger’s firm being singled out? What conclusion can you draw from your answer? I do believe that the minister as well as other big companies have gone to the other companies and asked for money to be put in the pool or give out some other sort of bribe to give the company with the best payout the contract they wanted. I would also say that this does not happen on a global scale, in the business world it is all about who is best fit for the contract. For the final part in this question I conclude that Saudi Arabia is not looking for a great company but a company that is willing to spend in order to gain business as well as gain profit for the ministry.
4. What would you recommend that Skyblue do? I recommend Skyblue to continue to keep their great business ethics and win the contract by doing business the way they have been, the first reason why the Minister of Saudi Arabia picked them in the first place is because of how well they do business. Yes, the business world is nothing but strict competition, but Skyblue was doing well before this contract. I feel that Skyblue and Auger should not put $100,000 into the pool to help secure the contract because like I said earlier the Minister already wants to give them the contract just simply based off of how well they conduct their business