Over the last couple of classes we have discussed important topics including the importance of impacting the political environment, global business and sustainable development, and managing for sustainability. Lucky for us as a class of students learning there is a news story developing right now that incorporates these topics in its details and that story is the arrest of several high profile figures in Saudi Arabia on corruption charges.
This story may not seem all that exciting to the naked eye, but these developments could have a lasting impact on the way business and government operate in the Kingdom and in turn on all players/ stakeholders that interact with Saudi Arabia. The story revolves around the King of Saudi Arabia ordering the arrest of 11 princes and dozens of former government ministers as well as a influential billionaire on corruption charges. This story is significant because over the last three years Saudi Arabia has moved to make the country more friendly and welcoming to outside investment and business operations. The Crown Prince Mohammed bin Salman has pushed these reforms as he has sought to modernize the country and move it away from its dependence on oil. This story is significant because firstly for outside investors and businesses this is another step in the Crown Princes efforts and a good sign that corruption is being taken seriously, so that Saudi Arabia is a good environment for businesses to operate. Beyond just business ethics this move is significant because several of the figures arrested in the corruption breakdown were figures that would be next in line or alternatives to the Crown Prince to ascend to the throne. The King is expected to abdicate the thrown in the next year or so. In conclusion, Saudi Arabia is cracking down on corruption in the country and the motives for the crack down may be more than simply making the country better for outsiders to do business in the country.
This story is entrenched with connections to the course material including understanding the political environment of a country or place of business. For businesses in Saudi Arabia or looking to expand into the region this development is another in a series of steps that signal to these corporations that Saudi Arabia is open for business. Furthermore, for the companies with operations in the country already it is important to follow these developments because they may have to change the approach with which they handle the government in the country. This is central to the focus of understanding the political environment and how best to operate. Another way that this story connects to the class is the intersection the story has with the topic of global business and sustainability. An entire case study could be done on the actions that Crown Prince Mohammed bin Salman has taken to modernize his country for both the strength of the economy and as a way of ensuring that he can hold onto power regardless of the success of the oil market.
The major take aways that observers of this story should be considering are what impact and trend this story sets up. In my opinion, while Saudi Arabia is making significant and rapid steps to modernize or westernize their economy and in turn their culture, the country is making these moves as calculated measures in the same way a company like Uber takes measures to change culture if it affects their bottom-line. In this case I think Saudi officials are looking to maintain power in the region and see these moves as the logical and moderate steps to that goal. I would leave readers of this post to ponder whether an move that is ethical sound taken for unethical reasons is still as ethical?