Cultural integration and foreign investments in GCC countries

Cultural integration and foreign investments in GCC countries

Blog Article

Recent research shows the significant part that cultural differences play within the success or of foreign investments in the Arab Gulf.

Recent studies on dangers linked to international direct investments in the MENA region offer fresh insights, trying to bridge the gap in empirical knowledge about the danger perceptions and management techniques of Western multinational corporations active widely in the area. For instance, research project involving a few major international companies within the GCC countries unveiled some interesting data. It suggested that the risks associated with foreign investments are even more complex than just political or exchange price risks. Cultural risks are regarded as more crucial than governmental, monetary, or economic risks based on survey data . Additionally, the study unearthed that while aspects of Arab culture strongly influence the business environment, many foreign businesses find it difficult to adapt to regional customs and routines. This difficulty in adapting is really a risk dimension that will require further investigation and a change in just how multinational corporations run in the area.

Working on adjusting to local culture is essential not sufficient for successful integration. Integration is a loosely defined concept involving several things, such as for example appreciating regional 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 relationships are more than just transactional interactions. What affects employee motivation and job satisfaction vary significantly across countries. Hence, to seriously incorporate your business in the Middle East a few things are needed. Firstly, a corporate mindset shift in risk management beyond economic 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, strategies that may be efficiently implemented on the ground to translate the new strategy into action.

Although governmental instability appears to dominate media coverage on the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a stable upsurge in foreign direct investment (FDI). The Middle East and Arab Gulf markets have become increasingly attractive for FDI. However, the existing research on how multinational corporations perceive area specific risks is scarce and often does not have insights, an undeniable fact attorneys and risk consultants 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 mostly focus on political risks, such as government instability or policy modifications that may impact investments. But lately research has started to illuminate a vital yet often overlooked aspect, namely the consequences of social factors on the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that numerous businesses and their management teams dramatically disregard the impact of cultural differences, due primarily to too little knowledge of these cultural factors.