Cultural inclusion and foreign investments in GCC countries

Cultural inclusion and foreign investments in GCC countries

Blog Article

Risk research reports have mainly concentrated on governmental risks, often overlooking the critical impact of cultural variables on investment sustainability.

Although political uncertainty appears to take over news coverage regarding the Middle East, in recent years, the region—and specially the Arabian Gulf—has seen a stable upsurge in international direct investment (FDI). The Middle East and Arab Gulf markets have become increasingly attractive for FDI. Nonetheless, the prevailing research how multinational corporations perceive area specific risks is scarce and often does not have depth, a well known fact lawyers and risk consultants like Louise Flanagan in Ras Al Khaimah would likely be aware of. Studies on risks associated with FDI in the region tend to overstate and predominantly concentrate on political risks, such as government instability or policy changes which could affect investments. But recent research has started to shed a light on a a critical yet often overlooked aspect, specifically the consequences of social facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that numerous businesses and their administration teams considerably neglect the effect of cultural differences, due primarily to too little comprehension of these social factors.

Pioneering scientific studies on risks linked to foreign direct investments in the MENA region offer fresh insights, attempting to bridge the gap in empirical knowledge concerning the danger perceptions and management methods of Western multinational corporations active widely in the region. As an example, research project involving a few major worldwide businesses within the GCC countries unveiled some interesting data. It argued that the risks associated with foreign investments are a great deal more complicated than just political or exchange rate risks. Cultural risks are regarded as more essential than governmental, economic, or economic risks in accordance with survey data . Additionally, the research discovered that while aspects of Arab culture strongly influence the business environment, many foreign organisations find it difficult to adjust to regional customs and routines. This trouble in adapting is really a danger dimension that will require further investigation and a change in how multinational corporations operate in the region.

Working on adjusting to local culture is necessary not sufficient for effective integration. Integration is a loosely defined concept involving numerous things, such as for example appreciating regional values, learning about decision-making styles beyond a restricted transactional business perspective, and looking into societal norms that influence company practices. In GCC countries, effective business connections tend to be more than just transactional interactions. What influences employee motivation and job satisfaction differ greatly across countries. Thus, to seriously integrate your business in the Middle East two things are needed. Firstly, a corporate mindset shift in risk management beyond monetary risk management tools, as specialists and solicitors such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest. Next, methods that may be effectively implemented on the ground to convert the new approach into action.