Cultural inclusion and foreign investments in GCC states

Cultural inclusion and foreign investments in GCC states

Blog Article

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

Focusing on adjusting to local culture is essential however enough for successful integration. Integration is a loosely defined concept involving a lot of things, such as for instance appreciating regional values, learning about decision-making styles beyond a restricted transactional business perspective, and looking into societal norms that influence business practices. In GCC countries, successful business connections are far more than just transactional interactions. What shapes employee motivation and job satisfaction vary greatly across cultures. Therefore, to genuinely incorporate your business in the Middle East a couple of things are expected. Firstly, a business mind-set change in risk management beyond monetary risk management tools, as consultants and lawyers such as Salem Al Kait and Ammar Haykal in Ras Al Khaimah may likely recommend. Next, methods which can be effortlessly implemented on the ground to convert this new mindset into action.

Pioneering scientific studies on dangers connected to international direct investments in the MENA region offer fresh insights, trying to bridge the research gap in empirical knowledge about the risk perceptions and management techniques of Western multinational corporations active extensively in the area. For example, a study involving several major international companies within the GCC countries unveiled some fascinating data. It suggested that the risks related to foreign investments are even more complicated than just political or exchange rate risks. Cultural risks are perceived as more important than political, 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 adjust to local customs and routines. This trouble in adapting is really a danger dimension that needs further investigation and a change in how multinational corporations run in the area.

Although political instability seems to take over news coverage on the Middle East, in recent times, the region—and specially the Arabian Gulf—has seen a stable boost in foreign direct investment (FDI). The Middle East and Arab Gulf markets have become rapidly appealing for FDI. Nevertheless, the existing research how multinational corporations perceive area specific dangers is scarce and frequently lacks depth, a well known fact solicitors and risk consultants like Louise Flanagan in Ras Al Khaimah would probably be familiar with. Studies on risks associated with FDI in the area tend to overstate and predominantly pay attention to political risks, such as for example government uncertainty or policy changes that may impact investments. But recent research has begun to illuminate a critical yet often overlooked factor, specifically the effects of social factors regarding 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 social variables.