Recent research highlights the significant part that cultural differences play within the success or of foreign investments in the Arab Gulf.
Working on adjusting to regional traditions is important but not adequate for successful integration. Integration is a loosely defined concept involving several things, such as for example appreciating local values, understanding decision-making styles beyond a limited transactional business perspective, and looking at societal norms that influence company practices. In GCC countries, effective business affairs are more than just transactional interactions. What influences employee motivation and job satisfaction vary greatly across cultures. Therefore, to genuinely incorporate your business in the Middle East a few things are expected. Firstly, a business mind-set change in risk management beyond financial risk management tools, as consultants and lawyers such as Salem Al Kait and Ammar Haykal in Ras Al Khaimah may likely recommend. Secondly, techniques that may be efficiently implemented on the ground to convert this new strategy into practice.
Recent studies on risks associated with foreign direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge regarding the risk perceptions and management strategies of Western multinational corporations active extensively in the area. As an example, research project involving a few major worldwide businesses within the GCC countries unveiled some fascinating data. It contended that the risks related to foreign investments are a lot more complicated than just political or exchange rate risks. Cultural risks are perceived as more important than governmental, monetary, or financial dangers based on survey data . Also, the study found that while aspects of Arab culture strongly influence the business environment, numerous foreign organisations find it difficult to adapt to local customs and routines. This trouble in adapting is really a risk dimension that requires further investigation and a change in exactly how multinational corporations run in the region.
Although political uncertainty generally seems to take over media coverage on the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a steady increase in international direct investment (FDI). The Middle East and Arab Gulf markets have become extremely attractive for FDI. However, the prevailing research on what multinational corporations perceive area specific risks is scarce and often does not have depth, a fact solicitors and danger experts like Louise Flanagan in Ras Al Khaimah would likely know about. Studies on dangers related to FDI in the area have a tendency to overstate and predominantly concentrate on governmental risks, such as government instability or policy modifications which could affect investments. But lately research has started to illuminate a crucial yet often overlooked aspect, namely the consequences of cultural facets in the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that many businesses and their management teams significantly overlook the effect of cultural differences, mainly due to too little knowledge of these cultural factors.