According to present research, a significant challenge for companies in the GCC is adjusting to regional customs and business practices. Learn more about this here.

This social dimension of risk management demands a shift in how MNCs run. Adapting to regional traditions is not just about understanding company etiquette; it also requires much deeper social integration, such as appreciating local values, decision-making designs, and the societal norms that affect company practices and employee behaviour. In GCC countries, successful business relationships are made on trust and individual connections instead of just being transactional. Additionally, MNEs can benefit from adapting their human resource management to reflect the social profiles of regional workers, as variables affecting employee motivation and job satisfaction vary widely across cultures. This requires a shift in mindset and strategy from developing robust economic risk management tools to investing in social intelligence and regional expertise as specialists and solicitors such Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest.

Despite the political instability and unfavourable fiscal conditions in a few areas of the Middle East, international direct investment (FDI) in the area and, especially, within the Arabian Gulf has been progressively increasing within the last 20 years. The relevance of the Middle East and Gulf areas is growing for FDI, and the linked risk is apparently essential. Yet, research regarding the risk perception of multinationals in the area is lacking in volume and quality, as specialists and solicitors like Louise Flanagan in Ras Al Khaimah would probably attest. Although different empirical research reports have examined the effect of risk on FDI, most analyses have been on political risk. However, a new focus has surfaced in recent research, shining a spotlight on an often-overlooked aspect namely cultural facets. In these revolutionary studies, the researchers noticed that businesses and their management often seriously underestimate the impact of social facets due to a lack of knowledge regarding cultural factors. In reality, some empirical research reports have discovered that cultural differences lower the performance of multinational enterprises.

A lot of the prevailing academic work on risk management strategies for multinational corporations demonstrates particular uncertainties but omits uncertainties that are difficult to quantify. Indeed, plenty of research within the international management field has been dedicated to the handling of either political risk or foreign exchange uncertainties. Finance and insurance literature emphasises the danger variables for which hedging or insurance instruments are developed to mitigate or move a firm's risk visibility. Nevertheless, recent research reports have brought some fresh and interesting insights. They have sought to fill an element of the research gaps by providing empirical knowledge about the risk perception of Western multinational corporations and their administration techniques at the company level within the Middle East. In one investigation after gathering and analysing data from 49 major international businesses that are active in the GCC countries, the authors discovered the following. Firstly, the risk related to foreign investments is obviously a great deal more multifaceted compared to frequently cited factors of political risk and exchange rate exposure. Cultural danger is perceived as more essential than political risk, economic risk, and financial risk. Secondly, despite the fact that aspects of Arab culture are reported to really have a strong influence on the business environment, most firms struggle to adapt to regional routines and customs.