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 local traditions is important although not adequate for effective integration. Integration is a loosely defined concept involving many things, such as for instance appreciating regional values, learning about decision-making styles beyond a limited transactional business perspective, and looking at societal norms that influence company practices. In GCC countries, successful business interactions tend to be more than just transactional interactions. What impacts employee motivation and job satisfaction differ greatly across cultures. Therefore, to genuinely incorporate your business in the Middle East a few things are needed. Firstly, a corporate mindset shift in risk management beyond financial risk management tools, as professionals and solicitors such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest. Secondly, techniques that may be effortlessly implemented on the ground to convert this new mindset into practice.
Recent studies on risks linked to foreign direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge about the risk perceptions and management techniques of Western multinational corporations active extensively in the region. For instance, research project involving a few major worldwide businesses within the GCC countries unveiled some interesting findings. It contended that the risks related to foreign investments are even more complicated than simply political or exchange price risks. Cultural risks are perceived as more crucial than political, financial, or economic risks according to survey data . Furthermore, the research unearthed that while elements of Arab culture strongly influence the business environment, numerous foreign organisations find it difficult to adjust to regional customs and routines. This difficulty in adapting constitutes a risk dimension that requires further investigation and a change in how multinational corporations run in the area.
Although governmental instability seems to dominate media coverage on the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a stable boost in foreign direct investment (FDI). The Middle East and Arab Gulf markets are becoming more and more attractive for FDI. However, the prevailing research how multinational corporations perceive area specific dangers is scarce and frequently lacks insights, a well known fact attorneys and risk experts like Louise Flanagan in Ras Al Khaimah would likely know about. Studies on dangers connected with FDI in the region tend to overstate and mostly focus on political risks, such as for example government uncertainty or policy changes that could influence investments. But recent research has started to shed a light on a a vital yet often overlooked aspect, namely the consequences of social factors regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that many businesses and their administration teams dramatically disregard the impact of cultural differences, due primarily to deficiencies in understanding of these social variables.