The Middle East has for a long time been at the centre of global trade as well as political interest. Demographic and social change shifts in global economic power, rapid urbanisation, climate change and resource scarcity, and significant technological development make this region both complex and hugely important.
Doing Business in the Middle East highlights both the opportunities and constraints confronting foreign investors in the region and proposes strategies on how best to overcome them. The book explores the existing and emerging political and legal frameworks, sociocultural patterns, national infrastructures, regulatory environment, conflict resolution and how to negotiate in the Middle East. It also provides useful insights into how to approach advertising and marketing, promotion and distribution, and also at the strategies for investing in the region and appropriate modes of entry. With a number of features such as case studies, examples of effective and ineffective practices, clear takeaways, and a note on a future agenda on each given topic, this book is highly practical.
Based on robust research, this comprehensive guide to doing business in the Middle East is an ideal reference tool for potential foreign investors, those who are already doing business or intend to do so in the region, and for a range of business and policy decision-makers. The book is also suitable for students and researchers in the fields of international management and business, international and strategic HRM, cross-cultural management, and business communication.
Author(s): Pawan Budhwar, Vijay Pereira
Publisher: Routledge
Year: 2023
Language: English
Pages: 274
City: London
Cover
Half Title
Title Page
Copyright Page
Dedication
Table of Contents
List of Figures
List of Tables
Contributors
Preface
Part I: The Middle East Business Context
Chapter 1: The Middle East Context: An Introduction
The Middle East Context
Topics Covered in the Book
Useful Websites
References
Chapter 2: Economic Environment in the Middle East: Facts and Initiatives
Introduction
GDP per Capita
GDP Across Sectors of the Economy
Unemployment
Progress Toward Economic Diversification and Ease of Doing Business in the GCC Region
Conclusions
Notes
References
Chapter 3: The Political Environment in the Middle East: A Comparative Analysis of the UAE, Egypt, and Iraq
Introduction
Political and Economic Environment
The UAE
Advantages and Benefits of the UAE’s Political and Economic Environment
Constraints and Disadvantages of the UAE’s Political and Economic Environment
Egypt
Advantages and Benefits of Egypt’s Political and Economic Environment
Constraints and Disadvantages of Egypt’s Political and Economic Environment
Iraq
Advantages and Benefits of Iraq’s Political and Economic Environment
Constraints and Disadvantages of Iraq’s Political and Economic Environment
Regulations
The UAE
Advantages and Benefits of UAE’s Regulations
Constraints and Disadvantages of UAE’s Regulations
Egypt
Advantages and Benefits of Egypt’s Regulations
Constraints and Disadvantages of Egypt’s Regulations
Iraq
Advantages and Benefits of Iraq’s Regulations
Constraints and Disadvantages of Iraq’s Regulations
Conclusion
Useful Websites
References
Chapter 4: Changing Legal Framework of the GCC Countries
Introduction
Economic Diversification, Ease of Doing Business and FDI Flows to GCC
Liberalization of FDI Law in GCC Allowing 100% FDI Participation
UAE Changes Nominee Shareholder Arrangement
Changing Commercial Company Law Structure to Host 100% FDI
Improving Governance in Public Joint Stock Companies and Protecting Composition Scheme
Extending Reform to Ownership Structure of Public Joint Stock Companies
Concluding Remarks
Challenges for Investment in the GCC and Broadly in the Middle East
Key Takeaway
Useful Websites
Appendix I: Reform in the Legal Framework in GCC – at a Glance
Appendix II
Appendix III
References
Chapter 5: Wasta in the Middle East: A Corruption or an Opportunity
Introduction
Wasta and Business
Scale Development (with 14 Items) – Phase 1 of Study
Wasta Legitimacy
Pragmatic legitimacy of Wasta
Item 1: Wasta is offered to companies' clients to keep and enhance their relationships with them
Item 2: Wasta is used to speed up certain processes especially when dealing with governmental institutions that suffer from ineffective bureaucracy
Item 3: Wasta is used because it leads to recruit and hire well-connected employees in the market who bring business to the employing companies
Item 4: Wasta is used in doing business and getting best offers and deals such as getting tenders
Item 5: Wasta is used to hire family's members because their competences and experiences are well known by the recruiters
Item 6: Wasta is used to hire family's members because they are more likely to be committed to their family business and give it a maximum effort
Normative Legitimacy
Item 1: Wasta is used to show the commitment and obligation to the families and their members
Item 2: Wasta is used to meeting friendship expectations of supports
Item 3: Wasta is used to practices Islamic principle “shafa'a”
Item 4: Wasta is used as an act of charity
Cultural-Cognitive Legitimacy of Wasta
Item 1: Wasta is exercised because it gives status and feeling of satisfaction to the Wasta person
Item 2: People who have strong Wasta (supplicant) feel powerful and protected in the society
Item 3: People use Wasta as a result of absence of the social justice
Item 4: People use Wasta because they believe that nothing can be achieved or reached without Wasta in the labor market
Discussion
Phase 2: Scale Validation
Expert Opinion
Scale Testing
Data Analysis
Exploratory Factor Analysis (EFA)
Confirmatory Factor Analysis (CFA)
Takeaway
Case Study
References
Part II: Conducting Business in the Middle East
Chapter 6: Entry Modes to Middle East-GCC Markets: The Case of the UAE
Introduction
Legal Frameworks Governing Market Entry in the GCC
Investment Promotion Policies in GCC Markets
Free Trade Zones
Foreign Direct Investment
Trade Routes
Human Capital
Theoretical Lens
Risk Mitigation in GCC Market Entry
Promoting Responsible Conduct in GCC Markets
Sector-Related Concerns for Investors
Renewable Energy Sources
Development of Smart Cities
Outward Foreign Direct Investment (OFDI)
Sovereign Wealth Funds (SWF)
Property Ownership
Conclusions
References
Chapter 7: Employment Relations in the Middle East and North Africa (MENA)
Introduction
Countries and Clusters
Labour Markets and Regulation
Management in Practice
Collective Employee Relations
Legislative Frameworks
Freedom to Associate
Collective Bargaining and Social Dialogue
Right to Strike
Labour Protection
TU Membership
Conclusions
Websites
References
Chapter 8: Banking and Financial Institutions in the Gulf Cooperation Council Region
Introduction
Source of the Asymmetric Difference in Knowledge
Banking Regulatory Framework Is Universal and Not Unique to the GCC
Different National Legal System Is Not Necessarily a Deal Breaker
Example of the Usage of English Law in Dubai International Financial Centre (DIFC)
Implications of the Difference in the Legal Systems
Can History Provide the Strategic Advantage of Doing Business in the Middle East?
The Role of Central Banks in the GCC Are Like Any Other Country Except for Islamic Banking and Possibly Fintech
Types of Financial Institutions Supervised by the Central Banks in the GCC
GCC Has the Characteristics of an Emerging Equity Market
Like the Developed Countries the GCC Is Vulnerable to Crises
Conclusions
Note
References
Chapter 9: Accounting and Taxation Systems in the Middle East
Introduction
Taxation
The Middle East and MENA Countries
History of Taxes and Types of Taxation
An Overview of the Current Taxes in the Middle East
Challenges for Foreign Investors and MNCs
Accounting
Accounting Systems in Middle Eastern Countries
Challenges Facing Governments and MNCs
Conclusion
Useful Websites
References
Chapter 10: Managing Human Resources in the Middle East
Introduction
Developments in HRM in the Middle East
Case Study: UAE and Technology in HRM
Challenges for HRM in the Middle East – Key Takeaway
References
Chapter 11: Conflict Management and Negotiation in the Middle Eastern Workplace
Introduction
Interests and Aspirations
Sources of Power and Influence
Informational Sources of Power
Power Based on Position in an Organization
Personality and Individual Differences
Networks and Referent Power
Contextual Sources of Power
Conflict Resolution Styles
Trust and Relationship in Negotiations
Conclusion
Recommendations: Way Forward
Useful Links
Note
References
Chapter 12: Performance Management in the Middle East
Introduction
Factors and Sub-factors Affecting PM in the Middle East
Impact of External Factors on PM in the Middle East
Collectivism
Wasta/Nepotism
Power Distance
Impact of Institutional Factors on PM in the Middle East
State-Owned Enterprises (SOEs)
Family-Owned Enterprises (FOEs)
Foreign Invested Enterprises (FIEs)
Impact of Internal Factors on PM in Middle East
Technology
Leadership
Uses of Performance Appraisal
Legal Uses of Performance Management in the Middle East
Features of Performance Appraisal in the Middle East
Conclusion
Case Study
FAHR
Relevant Websites
References
Chapter 13: Expatriate Management in the Middle East
Introduction
Key Contextual Considerations for People Managers and Expats
Sociocultural Context of Host Country
Economic Context of Host Country
Political Context of Host Country
Recommendations for Excellence in the ME
Recommendations for Human Resource Professionals
Recommendations for Expats
Conclusion
References
Part III: Emerging Themes
Chapter 14: Gender Issues at the Workforce in the Middle East
Introduction
Women’s Employment in the Middle East
Social-institutional Challenges
Visible and Invisible Inequalities within the Workplaces
Country Context: Saudi Arabia’s Structural and Institutional Changes
Recommendations to Promote Gender Equality in Middle Eastern Workplaces
Case Study – Saudi Aramco and the Gender Gap
References
Chapter 15: Innovation: The Unconventional Gateway to the Middle East
Introduction
Technology Transfer
Technology Transfer Reality
Indigenous Technological Capability
Innovation
Background
The Global Innovation Index (GII)
Egypt
Saudi Arabia
UAE
Conclusion
References
Chapter 16: Government e-Services and Reputation: Case of UAE
Introduction
Reputation: A Case of UAE e-Government
Citizen-Centric or Customer-Centric Approach
E-service Satisfaction
E-service Loyalty
Conclusions: Business in an e-Government Context
References
Index
