Challenges and Opportunities of Multinational Enterprises in Qatar - Research Paper Example

Challenges and Opportunities of MNEs in Qatar 1. Cross-Cultural Performance Feedback in Multinational Enterprises: Opportunity for Organizational Learning Different management approaches that are used in this region is not highly recognized thereby leading to the rest of the world to remain aloof about the existence of the management style due to the kind of economic and political system that exists in the entire region of Middle East. This has led to a lot of confusion in terms of how the management of the MNEs is conducted in Qatar. It is always not known whether the kind of the policies that are used in the other countries can be applied in managing these businesses or to apply whatever these countries do (Milliman, Taylor, & Czaplewski, 2002) In this country there is greater concern on how the people who are interested in establishing the MNEs can easily enter the market base, this is because there are a lot of influence that come from the local governments and other national institutions that people need to look into before engaging in any serious business in this country. In this situation there should be a research to determine the influence of these authorities in terms of the strategies that are laid to make sure that the host country offers competitive environment for the business performance. The kind of the political environment in the region is very dynamic to an extent that it has created a lot of confusion for investors in MNEs especially for those who are considering venturing in this country or the region or those who are already operating in the country. 2. Management in a Sheiko-Capitalism system.(Management and its Environment in the Arab World); Article from: International Studies of Management & Organization; The Sheiko-Capitalism economic system that most countries in the Middle East region including Qatar use in doing business may not be appealing to almost every investor who may be having interest in doing business in this region that is considered important in terms of MNEs. This kind of the economic system has no basic foundation in every sector of the economy and it is applied differently across the region thus leading to some sectors of the economy or other countries to operate differently to an extent that it is not possible to have uniform out come. The kind of the imbalance in terms of the oil production in this region has greatly affected countries including Qatar there by giving a clear picture of both the poor and wealthy sectors of the economy. The kind of the oil wealth distribution in this region is classified in three categories that ranges from those wealthy to poor region where by Qatar has found herself on the wealthy side of the regional economy. This kind of imbalance may lead to a situation whereby the cross border conflicts may arise thus affecting the business environment (Abbas, 1992). Once the cross border conflict is triggered then MNEs investments and the cross border transactions may be greatly hindered and this may even extend to those foreign investors who may be willing to have MNEs investment in the country. The kind of barriers that are placed in the country in terms of investment has majorly affected the foreign flow of investors therefore making the countries in the region to be rated as low performers when in the real sense they possess a greater potential in this sector (Abbas, 1992) 3. Tasdeer launches a new strategy to strengthen private sector exports It is not always possible to do business without creating links with the locals from that country since this is what can easily offer the investor a guaranteed entry in this country for businesses purposes (Tamim, 2013) There are several market failures and voids that are associated with doing business in Qatar that needs some kind of smart strategies that involves having closer links with the right partners who enjoy cordial relationships with the political authorities. This is the only way to secure assurance of doing business and to evade any kind of opportunism that may result from the powerful actors in the same or different business lines. (Tamim,2013) These powerful actors may be interested in having some kind of preferential treatments and easier access to the political authority thus giving them unnecessary advantages over those who may be willing to have some interest in the market and again they may get favor in terms of the resources from these offices. The many existing entry program include the use of the simple export of fully owned affiliates, use of joint ventures and the wholly owned venture system which is very rare thus making it impossible for these who are interested in that system to be fully locked out. Use of the joint venture is the most applied method of access this country and the entire in terms of doing business and this method has got numerous risks thereby making the MNEs in this country lagged behind (Tamim,2013) 4. Qatar's influence increases in the Middle East; Foresight and an open mind are paying off for Syria's newest enemy, as the wealthy state's political capital in the region grows The kind of animosity that the MNEs have experienced in the country and the entire region has brought unnecessary tension in the operations of such businesses and those who may be willing to have their investment in the country. This is because of the political affairs that the international community may be entangled in especially when it comes to conflicts and war that may not give favorable environment for these kinds of business owing to the fact that it requires huge resource to put up. This kind of tension has really affected the US investors when it comes to their stand on the terrorism in the region and the Israel-US relationship which many countries in the region including Qatar may not be happy with (Rime, 2011). There are other ways that have categorically reduced the level of investment in the region especially to those countries that are against the Islam like the Dutch. The Dutch anti Islam film by the name Fitna has generated a lot of animosity against the western country in the region including Qatar. This kind of animosity has created that kind of consumer strike against the MNEs made from those countries goods thereby lowering sales significantly thus reducing the business. This is not because of the quality of the goods but because of the kind of offensives that they may be getting from these producing nations that range from political, military to economic situations that have aggrieved them in one way or the other (Rime, 2011). 5. Qatar: Country and Foreign Investment The rate of FDI flow in this country is larger compared to other countries in the region thereby making it an investor friendly. This is because of its larger market size that is able to attract more FDI in flow. There are several sectors of trade that has greater opportunities in this country that has substantive profit margins that requires investment explorations. The hospitality and retail sectors of the MNEs have established themselves in this country as very dominant players there have a bigger say in the Qatar market share thus making a proper tool for investment in this country (LowTax 2013) Other opportune areas that are very lucrative for investment in the MNEs in Qatar are the fast food industry. It has very strategic niches that can propel one’s investment capability to greater levels. Because of the richer investment history in this region that can go back to older days of Ottomans era, there is significant interest in that kind of business and larger customer base that is associated to that history that can make the business grow extremely faster. Since there are existing ideas and marketing tools that were developed in other countries in the region and are easily applicable even in other Europe market can easily steer the influence of developing MNEs. This is important because the investor feels free to use these strategies thereby uplifting the contents of sales and the MNEs development in the country and this has seen greater business pacts being created between the countries that stretch to enormous investment agreements especially in the oil industry there by boosting the prospects of MNEs in Qatar (LowTax 2013) References Abbas A; (1992) Management in a Sheiko-Capitalism system.(Management and its Environment in the Arab World); Article from: International Studies of Management & Organization; http://business.highbeam.com/436988/article-1G1-17745664/management-sheikocapitalism-system LowTax (2013) Qatar: Country and Foreign Investment; http://www.lowtax.net/lowtax/html/qatar/qatar_country_foreign_investment.asp Milliman, J., Taylor, S., & Czaplewski, 2002) A. Cross-Cultural Performance Feedback in Multinational Enterprises: Opportunity for Organizational Learning; Academic Journal; Human Resource Planning;2002, Vol. 25 Issue 3, p29 http://connection.ebscohost.com/c/articles/11124913/cross-cultural-performance-feedback-multinational-enterprises-opportunity-organizational-learning Rime A., (2011) Qatar's influence increases in the Middle East; Foresight and an open mind are paying off for Syria's newest enemy, as the wealthy state's political capital in the region grows http://www.guardian.co.uk/commentisfree/2011/dec/15/qatar-influence-middle-east Tamim (2013) Tasdeer launches a new strategy to strengthen private sector exports http://www.qatarchronicle.com/gulf-business/10215/tasdeer-launches-a-new-strategy-to-strengthen-private-sector-exports/ Read More