Cultural inclusion and foreign investments in GCC states

Cultural inclusion and foreign investments in GCC states

Blog Article

The Middle East, specially the Arabian Gulf, has experienced a notable increase in foreign direct investment. Check out the potential risks that businesses might encounter.

Focusing on adjusting to local culture is important however adequate for successful integration. Integration is a loosely defined concept involving numerous things, such as for instance appreciating local values, learning about decision-making styles beyond a restricted transactional business perspective, and looking at societal norms that influence company practices. In GCC countries, successful business affairs are far more than just transactional interactions. What affects employee motivation and job satisfaction vary significantly across cultures. Hence, to genuinely integrate your business in the Middle East a few things are essential. Firstly, a corporate mind-set shift in risk management beyond monetary risk management tools, as experts and lawyers such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely recommend. Secondly, methods that can be effortlessly implemented on the ground to translate this new strategy into practice.

Although political instability appears to dominate news coverage on the Middle East, in recent years, the region—and particularly the Arabian Gulf—has seen a stable increase in international direct investment (FDI). The Middle East and Arab Gulf markets have become increasingly appealing for FDI. However, the prevailing research on what multinational corporations perceive area specific dangers is scarce and frequently does not have depth, a well known fact attorneys and danger experts like Louise Flanagan in Ras Al Khaimah would likely know about. Studies on risks related to FDI in the region tend to overstate and mostly concentrate on governmental risks, such as for instance government uncertainty or policy changes that may impact investments. But lately research has started to shed a light on a a critical yet often overlooked aspect, particularly the effects of social factors in the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that lots of businesses and their management teams notably undervalue the effect of cultural differences, due primarily to a lack of comprehension of these social variables.

Pioneering scientific studies on risks associated with international direct investments in the MENA region offer fresh insights, attempting to bridge the research gap in empirical knowledge regarding the risk perceptions and administration strategies of Western multinational corporations active extensively in the region. For example, a study involving a few major worldwide companies in the GCC countries unveiled some fascinating findings. It contended that the risks connected with foreign investments are far more complex than simply political or exchange price risks. Cultural risks are perceived as more important than political, economic, or financial dangers according to survey data . Moreover, the research unearthed that while aspects of Arab culture strongly influence the business environment, many foreign businesses find it difficult to adjust to regional customs and routines. This difficulty in adapting constitutes a danger dimension that will require further investigation and a big change in how multinational corporations operate in the region.