Choose a country to analyze (other than the United States). There are initial considerations about the choice of country. A high level of interest in a particular country is a good starting point, but some countries simply do not support the introduction of foreign businesses. A notable example is Zimbabwe, where there is zero Foreign Direct Investment moving in or out of the country. Another example is North Korea, where the society and economy is closed to outsiders in general. While researching the culture of the country, other factors may also preclude doing business there. Do not choose a country where international business is not possible.
Executive Summary
Doing international business in the United Arab Emirates is in the limelight due to the immense cultural diversity, good economic conditions, adequate resources, and market potential. The country has become a hub for international business, and with the appropriate strategies, the companies can exist strongly in this competitive market.
The most important thing is to search for a key partner to have the support and legal assistance for longer business sustainability.
The major section to evaluate the UAE for international business has been examined. These are; Friendliness, Barriers to foreign ownership, Governmental instability or legal impediments, Issues of corruption and ethics, Current status of inflation, taxation, and economic growth, Cultural issues, Business etiquette in negotiations, Attitudes toward time, Verbal and non-verbal language, Attitudes toward women, Education, workforce, Manufacturing & Workforce and with some recommendations.
1-Introduction
The United Arab Emirates is an absolute federal monarchy in Western Asia. The seven emirates of the kingdom are Abu Dhabi (capital), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. The religion of the country is Islam, as people in this region are following the Islamic tradition. People speak the Arabic language. UAE is quite tolerant of religion. Also, poetry has a great influence on this religion, as people are containing emotional and sentimental attachments with the poetry and relate it to the different aspects of life. The currency of the country is UAE Dirham. The gross domestic product is $407.210 billion. The United Arab Emirates is the federation of absolute hereditary monarchies. There is an autocracy, as the delegation is quite rare in this country (Arabianbusiness.com, 2017).
“Doing international business in the United Arab Emirates is in the limelight due to the immense cultural diversity, good economic conditions, adequate resources, and the market potential. The country has become a hub for international business, and with the appropriate strategies, the companies can exist strongly in this competitive market.”
2-Country Under Consideration
Friendliness
Due to immense cultural diversity in this country, this has been revealed that the country is business-friendly. The business regulations are flexible in this country, which enables the different international organizations to expand the business operations in this region. Despite having a big startup cost of the business in UAE or its different cities, the chances of growth and sustainability are always in the fame. From construction to manufacturing and healthcare to retail, UAE is a business-friendly country (Export.gov, 2016).
Barriers To Foreign Ownership
Doing or intending the business in the United Arab Emirates is big a challenge to gain ownership of the property. According to UAE law, a partnership with the local owner is necessary. The company cannot buy the property but can take on the test or lease to start the business. As a result, the company has to share the profit or loss with the local owner. Thus, the ownership divides when doing or starting the business. It is a huge barrier for foreign business owners, and it has emerged as a big entry barrier in this region.
Governmental Instability Or Legal Impediments
In the United Arab Emirates, the political system of the United Arab Emirates is stable. However, the instability occurs when some activist in the country uses to protest against the government due to a lack of government delegations. It has been revealed that legal impediments occur when the government changes the regulations for different businesses with the passage of time. The changes in the legal systems, such as tax rates, create spikes in the different business operations (Gov.uk, 2015).
Issues Of Corruption And Ethics
The corruption in the United Arab Emirates creates a negative impact on the business, as it increases the business cost and risk. The top-level politicians of this country, due to the mutual benefits, are supporting the specific industries. There are many loopholes in the system, provide the chances to the business culprits to conduct the different frauds. Furthermore, bribery is a huge barrier in this country, which is a big barrier in doing business. Corruption impairs the overall business climate and market opportunities. In this modern business era, international firms are now restrained from making pertinent investments in the country. The Antibribery Conventions in UAE are in the limelight, but the level of corruption emerges from the top level, and the law seems inaccessible (Export.gov, 2016).
Status Of Inflation, Taxation, And Economic Growth
Due to the increase in the oil prices and different commodities in the international market, inflation increases in this county. The inflation rate was increased to 2.2 in 2017, and this is a huge threat for both small and large organizations. The income level of people in this region seems moderate, and inflation contains a negative impact on international business. Also, this has been revealed that the economic growth of the country is expected to rise 3 to 3.5 for the medium term, and this is creating a big attraction for the different international businesses (Arabianbusiness.com, 2017).
Research Connection. (2015). UAE’s Inflation Rate and GDP Growth Rate. Retrieved from http://researchkonnection.com/uae-economic-outlook-2015/
a-Discussion of Cultural Issues
Cultural issues
It has been observed that the United Arab Emirates is a huge attraction due to the immense cultural diversity. Arabs are usually relaxed, well-behaved, and well-mannered. Thus, the collaborations with the local business giant are effective and resultant due to these attributes of the culture. People, in the form of customers, are quite responsive and contain patience, which provides a great chance to make these customers loyal and satisfied through creating the values (MacBride, 2016)
Business Etiquette In Negotiations
In the workplace, people in this country use prefer relations and emotional attachment with each other, and it leads towards business sustainability. The working day starts from Saturday, which is quite beyond western business etiquette. Interestingly, due to the emergence of western companies in this region, people are following the western aspect of the business. The example is Dubai, as there is the much multinational organization, which are successful, as far as the western traditions are concerned (Rahman, 2013).
Attitudes Toward Time
The attitude towards time is good, as people love to be on time at the offices or other workplaces. It is a good aspect for the businesses, and it resembles western culture.
Verbal and non-verbal language
People love to hold different meetings to communicate with each other. People are quite adaptive regarding the language, as we can see people speaking the English language. It is also a positive factor, which eliminates the communication barrier in international business.
Attitudes Toward Women
Overall, the local woman is not supported in work and business. The overall dependency of the business is on men. It cannot be a big issue than doing international business in UAE, as it is such certain traditional traits or approaches towards females
Education, Workforce
Local people do not contain a good education trend, as people are business-oriented and rely on immigrants to work for them. The young generation, due to the financial resources used to educate the other countries. In UAE, the local workforce is quite visible in the government department (Export.gov, 2016).
HKTDC Research. (2016). The UAE’s population breakdown. Retrieved from http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/UAE-s-consumer-market-is-about-diversity/rp/en/1/1X000000/1X09U0Z1.htm
Manufacturing & Workforce
For Instance, in the manufacturing sector of the country, most of the workers are foreigners. However, the labor cost is quite low as compared to the western countries in the UAE. People love the work flexibility in the workplace. However, when doing business in the UAE, this is necessary to hire local people to make the products quite pertinent according to the demands of the customers.
3-Analysis of Proposal & Recommendation
The Economic And Cultural Factors Of The Country
Overall, the economic conditions of the country seem good, as due to the immense range of investment, the country is still growing. The UAE has reduced oil dependency by boosting both local and international companies. The income level of people in this region seems high, which can let the customers make positive buying decisions. The government intervenes in the businesses and makes flexible regulations to provide different expansion and entry opportunities and possibilities. The culture of the UAE is diverse due to the intensity of foreigners. However, concerning the local people, their behavior, intentions, attitudes, and sense of belonging, this is easy for international companies to contain effective cultural integration. People usually contain emotional attachments with the different brands due to relations, values, and integrations. Based on these cultural and economic factors, a particular business proposal can be made(MacBride, 2016).
Proposal and Recommendation
Based on the different cultural and economic factors, the international retail business has been proposed in the United Arab Emirates. As elaborated, people in the UAE are quite responsive to the international brand, and the retail chain can make the best placements in the different cities. The economic conditions are good, which reduces the entry barriers in this country. The retail chain business can be initiated in both cities, Dubai and Abu Dhabi, due to the cultural diversity, income level, behavior towards the brands, and attitudes of the customers. The cost of doing business regarding retail is low as compared to the other businesses.
Itis recommended that the business in the UAE should carry the quality in products and services. The company has to make and sustain good relations with the local partners to contain long-term business sustainability. The cultural integrations in the UAE are the backbone of the business to interact with the employees and the customers in an effective and lucrative manner. Avoiding illegal business expansions and dealings is recommended, as laws and regulations can become worse with the passage of time. The most important thing is to search for a key partner to have the support and legal assistance for longer business sustainability.
References
Arabianbusiness.com. (2017, October 2). UAE economic growth forecast to rise to 3-3.5% in the medium term. Retrieved from http://www.arabianbusiness.com/politics-economics/380200-uae-economic-growth-forecast-to-rise-to-3-35-in-medium-term
Export.gov. (2016, November 8). United Arab Emirates – Corruption. Retrieved from https://www.export.gov/article?id=United-Arab-Emirates-corruption
Gov.uk. (2015, December 21). Doing business in the United Arab Emirates: UAE trade and export guide. Retrieved from https://www.gov.uk/government/publications/exporting-to-the-united-arab-emirates/exporting-to-the-united-arab-emirates
MacBride, E. (2016, March 21). Nine Reasons Dubai Could Be The Most Important City Of The 21st Century. Retrieved from https://www.forbes.com/sites/elizabethmacbride/2016/03/31/9-reasons-dubai-could-be-21st-century-capital/#40a57ccc5b23
Rahman, S. (2013, June 8). UAE’s future could be affected due to lack of entrepreneurship. Retrieved from http://gulfnews.com/business/economy/uae-s-future-could-be-affected-due-to-lack-of-entrepreneurship-1.1194221
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