Managing MNC-Government Negotiations in Saudi Arabia: The Key Role of Elites

This article explores the relationships between multinational corporations (MNCs) and a host country, in this case Saudi Arabia (the Kingdom). The interests of Saudi businesses and the political elite, along with the evolution of their relationship are surveyed. Furthermore, the validity of traditional and two-tier models of bargaining between MNCs and developing countries are assessed in the context of the Kingdom. It is argued that while both models may be useful, the two fail to capture the nature of MNCs-Saudi Arabia bargaining process. These two models are revised and enriched to adequately reflect the Kingdom's specific advantage, the nature of its national firms, and the unique relations it has with MNCs and their home countries. The study concludes that under current global political and economic conditions, the elite and MNCs interests appear to converge around business objectives.