With energy costs far and away the biggest concern at most U.S. companies—most notably chemical buying or producing firms—more buyers are looking to source materials or establish manufacturing in regions with lower energy costs. And that journey is leading many buyers to the Middle East, the source of much of the energy the world uses, where more suppliers are establishing a manufacturing footprint. But buyers won't get very far in the Middle East without learning the ins and outs of business culture in the region.

“There are three common mistakes foreign business personnel make when doing business in the Middle East,” says Neil Payne, Middle East trainer at Kwintessential Cross Cultural Solutions in the U.K. “The first is not understanding the role of Islam in daily life and its role in business etiquette. Secondly, they often underestimate the fundamental importance of good personal relationships in order for business relationships to succeed rather than vice-versa. And lastly, they may not realize things tend to take longer in the Middle East; the Arabs are not a clock-driven people, which can cause issues with those that are.”

The petrochemicals industry has clearly been expanding most in this region due to its dependence on energy products. Major players such as SABIC and Saudi-Aramco are growing both organically (there's a LOT of construction here) and through joint ventures or acquisitions with U.S. and European firms. But other industries, such as mining, are expanding in the region, as the various economies work to diversify away from energy but fund that diversification with energy-related revenues.

According to the CIA World Fact Book entry on Saudi Arabia, for example, “The government is encouraging private sector growth, especially in power generation, telecommunications, natural gas exploration, and petrochemicals, to lessen the kingdom's dependence on oil exports and to increase employment opportunities for the swelling Saudi population.”

Nearly all experts say business success in the Middle East depends on relationships and relationships start small. Greetings in the Middle East, for example, usually begin with a handshake (right hand always) that may last slightly longer than a U.S. businessperson is used to. One source tells Purchasing that Islamic etiquette usually suggests they wait for the other person to withdraw their hand first, which can seem awkward to a U.S. businessperson.

For the most part, making small talk with businesspeople in the Middle East is not much different than in other parts of the world. Aamir Aka of Argon Consulting Middle East in Bahrain says the acceptance of some U.S. and European television programs has made the typical Middle Eastern businessman surprisingly familiar with phrases and trends in the U.S. And in general, businesspeople have become more accustomed to non-Middle Eastern business methods. “It's much easier to do business in the Middle East and especially Saudi Arabia today that it was in the past,” Aka says.

Kanak Madrecha, president of CSCMP's Dubai Roundtable and a senior quality manager at financial services firm Dubai World in the United Arab Emirates, says all business meetings in the Middle East should begin by asking about one's family and health. “But when in Islamic regions, it's best to avoid discussing the topic of charging interest, as it is not allowed by Islam,” he points out.

Also along those lines, respondents to a Purchasing survey nearly unanimously recommend avoiding two topics in business discussions in the Middle East: religion and the role of women in business or even in society. The typical Middle Eastern perspective on these topics is usually different enough from those in the U.S. that it's almost sure to be a prickly topic to discuss politely.

Aka says to find suppliers or do any business in the Middle East, a company needs to establish relationships in the region in person. “If you're trying to find suppliers here from your desk in the U.S. it's not going to happen,” he says. “People need to see you here. They want you to commit to the region.”

Brent Pearson, managing partner at logistics firm Seko in Dubai says it does take a while to understand the customer and their requirements in the Middle East and patience is key to building relationships. “Some investment in resources and establishing partnerships will be required to ensure a successful expansion into this region,” he says. “It is often said that people in the Middle East prefer dealing with family and friends before strangers or Westerners. Therefore the basis of strong business partnerships is the personal relationships and trust of the individuals.”

Pearson says business meetings in the Middle East tend to be less formal and “there is often very little distinction between business and pleasure—both are very much interacted. “Middle Easterners and Arabs will generally try to gauge the personality of those they meet and may rely on this instinct to determine whether they would like to do business. Having informal meetings can assist them in making this assessment.”

Buyers should note that it is also more typical to leave office doors open and take phone calls during meetings in Middle Eastern countries, which can lead to more disruptions.

The role of women in business varies greatly across the Middle East today. Several survey respondents said women may not be accepted as collaborators in meetings, but others said women are taking on greater roles in business and it varies greatly depending on region and company. It's best to get a feel for the customs in the particular region or even within the company you're working with before setting up a meeting plan. Again, in-person meetings are the best way to establish this.

Traveling in the Middle East may be different than U.S. businesspeople are used to. Without any major railways and vast stretches of desert to travel across between cities and countries, many businesspeople take planes for shorter journeys. “Either you fly or you drive for hundreds of miles, like I am now,” Aka joked when talking to Purchasing on a cell phone while driving across Saudi Arabia.

Also, when traveling in the Middle East, you can expect to see a lot of construction. Pearson says as Middle Eastern economies realized they needed to diversify away from only energy-related industries, they have invested oil revenues into the construction of many other industries. “Some estimates say more than 25% of the world's cranes are now in Dubai alone,” he says.

Businesspeople—and the population in general—in the Middle East pride themselves on their ability to negotiate. One respondent to Purchasing's survey puts it this way: “When you come to the Middle East, be ready to negotiate. This is a trading culture at its roots. And don't think for a minute the people in the Middle East are not as smart in negotiating as those in the U.S.—after all these are the people that took a sandpit and turned it into the metropolis of Dubai.”

Aka agrees with that assessment saying, “They consider themselves traders and the art of negotiating is a big thing. Since they don't always have specific industry know-how, they are good at buying services from people that can do the job, which requires negotiating.”

But for the most part, negotiations are done in person in the Middle East, so leave the e-auction tool at home.

Like many overseas markets, the pace of business and decision-making in most Middle East markets may seem slower than U.S. businesspeople may be accustomed to. The entire cycle from introduction to contract with a Middle East supplier may take longer than expected, so it requires a solid commitment.

“It often takes a few meetings before you will achieve your objectives, so be patient, don't push things and be genuine,” says Pearson.

According to Kwintessential's web site, negotiations in the Middle East “can be lengthy and frustrating affairs” for Europeans or U.S. businesspeople. Why? First, there tends to be a lot of red tape surrounding business deals and decision-making. While decisions often come from the top, businesspeople here often make decisions on gut and heart feelings, not on facts and figures. If the right level of trust has not yet been established through the building of a relationship then this may be holding up proceedings.

“If you are not negotiating with the decision maker you are most likely wasting your time,” Kwintessential reports.