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 upsurge in international direct investment. Find out about the risks that businesses might encounter.

Focusing on adjusting to regional culture is necessary although not sufficient for effective integration. Integration is a loosely defined concept involving several things, such as for instance appreciating local values, learning about decision-making styles beyond a restricted transactional business perspective, and looking into societal norms that influence company practices. In GCC countries, successful business relationships are far more than just transactional interactions. What impacts employee motivation and job satisfaction vary significantly across cultures. Thus, to genuinely integrate your business in the Middle East two things are expected. Firstly, a business mindset change in risk management beyond economic risk management tools, as experts and lawyers such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would probably recommend. Secondly, methods that can be effectively implemented on the ground to convert the new mindset into practice.

Although governmental instability generally seems to take over media coverage regarding the Middle East, in recent times, the region—and specially the Arabian Gulf—has seen a steady upsurge in foreign direct investment (FDI). The Middle East and Arab Gulf markets are becoming extremely attractive for FDI. However, the prevailing research how multinational corporations perceive area specific dangers is scarce and usually lacks insights, an undeniable fact solicitors and risk consultants like Louise Flanagan in Ras Al Khaimah would likely be familiar with. Studies on risks connected with FDI in the region have a tendency to overstate and predominantly pay attention to political risks, such as for example government instability or policy modifications that could impact investments. But lately research has started to shed a light on a a crucial yet often overlooked aspect, specifically the effects of cultural facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that lots of businesses and their management teams somewhat disregard the effect of cultural differences, mainly due to deficiencies in comprehension of these social variables.

Recent scientific studies on risks associated with international direct investments in the MENA region offer fresh insights, trying to bridge the gap in empirical knowledge about the danger perceptions and administration strategies of Western multinational corporations active extensively in the region. As an example, a study involving several major worldwide businesses within the GCC countries revealed some interesting data. It suggested that the risks associated with foreign investments are a lot more complicated than simply political or exchange rate risks. Cultural risks are perceived as more crucial than governmental, monetary, or economic risks based on survey data . Also, the research found that while aspects of Arab culture strongly influence the business environment, many foreign companies find it difficult to adjust to regional traditions and routines. This difficulty in adapting constitutes a risk dimension that needs further investigation and a big change in exactly how multinational corporations run in the region.