This study investigated whether known economic and international business theories available\ud
in the literature are meaningful enough to explain the nature, existence and role of\ud
multinational companies (MNCs) in the Middle East, particularly Saudi Arabia. Two sets of\ud
questionnaires were distributed in major cities of Saudi Arabia - one set for 100\ud
multinational managers and another for 280 multinational customers. 234 questionnaires were\ud
collected - 45 from multinational managers and 189 from customers. This represents a total\ud
response rate of 62 percent, which is adequate for this study.\ud
The empirical results, supported with comprehensive secondary data, confirmed virtually all\ud
of the research hypotheses. The study found that joint ventures are the dominant form of\ud
multinational business in Saudi Arabia, both in manufacturing and service industries. The core\ud
roles of MNCs in the Saudi-foreign ventures are evident in the cross-border value-adding\ud
activities of marketing, trading, manufacturing, consulting, contracting, project management,\ud
insurance, hotel operation and banking. Likewise, MNCs provide licensing, franchising,\ud
financing services and various auxiliary roles in the Kingdom. Therefore, the multinationality\ud
of a firm or a group of firms operating across national boundaries is not necessarily\ud
synonymous with international production - the main subject of contemporary multinational\ud
theories.\ud
The respondents generally perceived the competitiveness of MNCs operating in Saudi Arabia\ud
as a function of a number of economic, management, marketing, technological and other\ud
variables. They also perceived the contributions of MNCs to the Kingdom's socio-economic\ud
developments as significant and positive.\ud
The study also found that understanding Islamic values and ethics is important for MNCs. In\ud
this regard, the researcher looked at some objective indicators of business success and related\ud
them to selected measures of MNCs' local cultural awareness and responsiveness. The results\ud
indicate that the business success of multinationals operating in Saudi Arabia is positively\ud
related to their local cultural awareness and responsiveness. Along this line, this study covers\ud
some vital elements of Islamic culture, which will help MNCs understand further the cultural\ud
needs, values and sensitivities of the Saudi people and Muslims in general