ACE Institute of Management

International Business

Assignment-2

Review of case: The Java Lounge

Prepared by: Nistha Pradhanang

EMBA Fall 2015
Culture is the sum of attitudes, customs, and beliefs that distinguishes one group of people
from another. Culture is transmitted, through language, material objects, ritual, institutions,
and art, from one generation to the next. Because every country has its own culture,
businesses in various countries are highly influenced by it. Some of the major culture related
problems occur due to the lack of awareness and implementation of practices that best suit
the culture of that particular country or area. Many firms are unable to adjust or accept
foreign customs due to which their business is jeopardized. Thus, it is vital that firms
determine which business practices vary in a foreign country and what adjustments, if any,
are necessary.

The above case tells us about The Java lounge and gives us an insight on the challanges of
working in an extermely different cultural environment. It shows why companies have had
mixed success in Saudi Arabia, a modern yet ancient society grounded in Islamic law,
religious convictions, and behavioral traditions.

While Saudi Arabia has modern cities like that of other developed countries, its strict Islamic
religious principles and ancient social customs often clash with modern economic and
technical realisms. Saudi Arabian authorities sometimes employ liberty in legal formation and
enforcement to ease these clashes. When four young Saudis decided to open a
restaurant/lounge in Saudi Arabia, they were not confident if there would be enough Saudis
like themselves to support a foreign influenced restaurant/ lounge in their own country. Even
their market research was difficult because of customs limiting male-female interactions
except among the family members. Furthermore, Saudis consider questions about their
families as rude and an invasion of privacy. Nevertheless the research was successfully done.
The researchers used unconventional tools to identify affluent people. They noted peoples
demeanor, expensive wrist watches and the neatness of mens beards to identify the number
of potential market.

The very upscale Java Restaurant/Lounge was opened in Jeddah carefully considering the
fact that Jeddah had more contact with foreigners and was less conservative than the capital
city. In a country where men and women needed to be separated all the time whether it be in
their professional life or during leisure time, The Java Lounge took all these restrictions into
consideration while designing their restaurant layout. They has separate entrances for male
and female as well as separate cabins and floors.

Native Saudis have their share of difficulties finding out the right way to do business
remaining in the cultural limitations. For foreigners who work in Saudi, the task is multiple
folds difficult.
Foreigners working in Saudi Arabia are sometimes traumatized by the countrys harsh legal
sanctions. There are religious patrols, and strict punitive actions against anyone found guilty
of breaking the law. Because of this, many companies have had to suffer a lot. For example,
sales of childrens game Pokemon was halted because they thought that the game might
encourage the un-Islamic practice of gambling. A franchisor was forced to remove the face
under in Starbuckss logo because Saudi authorities felt the public display of womans face
was religiously immoral.
This doesnt mean that is not impossible to ensure successful business in Saudi Arabia. All
the investing companies needs to make sure that they are not going beyond the religious
boundaries. Many have had success continuing their business by adhering to Saudi laws by
compromising and coming up with actions that complement the way of life in Saudi Arabia.
For example, McDonalds Dims its lights, closes the doors, and stops attending to customers
during the five times per day that men are called to pray. Many companies also adjusted
voluntarily by converting revenue-generating space to prayer areas to gain goodwill of the
customers. Furthermore, Coty beauty omitted models face on the point of purchase displays
that it depicts in other countries. Saudi Arabian Airlines has space on the rear of the plane for
prayer and so does Harvey Nichols department in Saudi from the UK. Hence, certain
tweaking of operations or space use by companies can result in peaceful operation of their
businesses in conservative countries such as this. One thing to note is that not all adjustments
are due to religion alone. Personal interactions due cultural differences is also something that
makes it tricky to work in Saudi Arabia.

The case highlights the example of the Java Lounge, a new, up-scale restaurant in Jeddah that
serves an affluent niche of Saudi consumers. Further, it describes ways in which a variety of
foreign firms have adjusted their products, facilities, and operating strategies in order to meet
government requirements and yet satisfy the Saudi consumer. It points out numerous
contradictions one may encounter regarding Saudi legal sanctions, purchasing patterns, and
attitudes towards work. The case concludes by noting some of the working ways and
opportunities that exist in Saudi Arabia due to many contradictions found in the country.

When foreign companies open their franchise in a new country, there are many things that
they need to consider beforehand. This case study examines the dynamics of culture and its
effect upon international business operations and strategy. While exploring the causes of
cultural differences, inflexibilities, and changes, it focuses upon the impact of cultural
traditions on business activities, as well as the mutually satisfactory reconciliation of cultural
differences. It conclude with a discussion of the ways in which firms can potentially
maximize their effectiveness using few adjustments while operating in a world of complex
and dynamic cultural diversities.