Cultural integration and foreign investments in GCC countries

Cultural integration and foreign investments in GCC countries

Blog Article

Recent research highlights the significant role that cultural differences play in the success or of foreign investments in the Arab Gulf.

Working on adjusting to regional culture is necessary not enough for successful integration. Integration is a loosely defined concept involving many things, such as for example appreciating local values, understanding 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 seriously 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 professionals 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 action.

Although political uncertainty appears 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 have become more and more appealing for FDI. Nevertheless, the prevailing research on what multinational corporations perceive area specific dangers is scarce and often does not have depth, a well known fact lawyers and danger consultants like Louise Flanagan in Ras Al Khaimah may likely be aware of. Studies on risks associated with FDI in the area have a tendency to overstate and predominantly pay attention to political dangers, such as government uncertainty or policy changes which could affect investments. But recent research has begun to illuminate a vital yet often overlooked factor, namely the effects of social factors in the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that many companies and their administration teams considerably brush aside the impact of cultural differences, due mainly to too little understanding of these cultural factors.

Pioneering studies on risks connected to international direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge concerning the danger perceptions and management techniques of Western multinational corporations active widely in the region. For example, a study involving a few major worldwide businesses in the GCC countries revealed some fascinating 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 financial risks according to survey data . Also, the research unearthed that while elements of Arab culture strongly influence the business environment, many foreign companies struggle to adjust to regional traditions and routines. This trouble in adapting is really a risk dimension that requires further investigation and a change in just how multinational corporations operate in the area.