Cultural integration and foreign investments in GCC states

Cultural integration and foreign investments in GCC states

Blog Article

Risk research reports have mainly concentrated on governmental dangers, frequently overlooking the critical impact of cultural factors on investment sustainability.

Focusing on adjusting to local culture is important yet not sufficient for effective integration. Integration is a loosely defined concept involving a lot of things, such as appreciating regional values, comprehending decision-making styles beyond a restricted transactional business viewpoint, and looking into societal norms that influence company practices. In GCC countries, successful business affairs tend to be more than just transactional interactions. What affects employee motivation and job satisfaction vary significantly across cultures. Thus, to seriously incorporate your business in the Middle East a couple of things are needed. Firstly, a business mind-set shift in risk management beyond financial risk management tools, as consultants and attorneys such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely recommend. Secondly, techniques that can be efficiently implemented on the ground to convert the new strategy into practice.

Although political uncertainty seems to take over news coverage on the Middle East, in recent years, the region—and particularly the Arabian Gulf—has seen a stable upsurge in foreign direct investment (FDI). The Middle East and Arab Gulf markets have become increasingly appealing for FDI. But, the present research how multinational corporations perceive area specific risks is scarce and frequently does not have depth, an undeniable fact solicitors and risk professionals like Louise Flanagan in Ras Al Khaimah would probably be familiar with. Studies on dangers associated with FDI in the region have a tendency to overstate and mostly focus on governmental risks, such as for instance government uncertainty or policy modifications that could impact investments. But lately research has started to illuminate a vital yet often overlooked factor, namely the effects of cultural facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies reveal that many companies and their administration teams considerably overlook the impact of cultural differences, mainly due to deficiencies in knowledge of these social factors.

Recent studies on risks associated with international direct investments in the MENA region offer fresh insights, trying to bridge the gap in empirical knowledge regarding the risk perceptions and management techniques of Western multinational corporations active widely in the region. As an example, research project involving a few major worldwide businesses within the GCC countries revealed some interesting findings. It argued that the risks related to foreign investments are even more complicated than simply political or exchange price risks. Cultural risks are regarded as more important than political, financial, or economic risks according to survey data . Moreover, the study discovered that while elements of Arab culture strongly influence the business environment, numerous foreign businesses find it difficult to adjust to regional traditions and routines. This trouble in adapting is really a danger dimension that needs further investigation and a big change in exactly how multinational corporations run in the area.