Cultural Difference between the UK and Oman - Case Study Example

Business Table of Contents 2 Introduction/ Issue Section 3 Terms of Reference 3 Overview of the current situation in Oman 4 Cultural difference between UK and Oman 7 Analysis of the current situation in Oman 8 PESTEL Analysis 8 SWOT Analysis 9 Solutions and recommendations 10 Forecasts and outcomes 10 Reference List 12 Executive Summary Cultural differences are major challenges for overseas business; as it can be the main reason for success or failure of a business in the host country. In light of this topic a briefing paper is prepared to depict the cultural difference between the UK and Oman. It is prepared for assisting the UK based entrepreneur to understand the laws and regulations of Oman as he has the desire to set up a Halal restaurant in the host country. The paper aims at depicting the most vital points that are related to the establishment of the new business in an unknown country. It is observed that Oman has positive attitude towards building a strong relationship with the foreigners and maintain good terms with them. The business culture followed by Oman is quite different than that of the UK; hence it will influence management and negotiation of the restaurant if the details regarding Omani business culture are not known. The Sultanate of Oman encourages foreign investment in the country, which aims at developing the nation. However, Oman lacks in technological development, which is the main weakness of the country. Hence, the restaurant business in Oman has the opportunity to set up its foundation; nevertheless, there are few challenges too. Introduction/ Issue Section Cultural difference between the countries can affect overseas business to a great extent. Hence, it is significant to understand the cultural barriers before conducting any business plan internationally. Before entering an unknown country it is very important to gather information pertaining to the demographics of the regions followed by the law. In doing business overseas, labor law in the host country is crucial for the successful operation of the business. The briefing paper highlights the issues that can be encountered by the UK based entrepreneur, who is willing to open a Halal restaurant in Oman, which is an Arabian country. The culture in both the countries is widely distinguishable as Middle East is well known for its diverse cultural background. The paper investigates the following: 1) The business culture of Oman, which will help the entrepreneur in planning to develop the restaurant business. 2) The vast cultural difference between the UK and Oman. 3) Identifying the exact requirement for starting a new venture in Oman after considering the cultural issues Terms of Reference The briefing paper is prepared for a UK based client in order to elaborate the details regarding the demographics and culture of the Oman. The client is willing to set up a Halal restaurant in Oman and thus the paper will help him to understand the people in Oman and also its business outlook. Overview of the current situation in Oman Culture of Oman is quite different from other countries as it owes much to its geographic location. There are about 3 million people residing in the country within which half of them are Omanis (Countries and Culture, 2014). The main language of the country is Arabic through which the Omanis and Arabs communicate. It is an oil producing nation and revenues are generated from petroleum products, which have dramatically developed the country in the past few decades (Countries and Culture, 2014). However, natural gas reserves have gained prominence for the past few years and export of these resources are also encouraged to different countries. The food habits of the Omanis and Arabs are unique too. Rice is the main part of their cuisine and they have a strong preference towards Indian foods. Hence, many Indian restaurants can be found in Oman. Additionally, there are various Western fast food centers in Oman that have attracted the population to a great extent. Hence, it will be easy for the entrepreneur to set up the restaurant in Oman as Western restaurants have already got accepted by the population through the sale of fast food (Countries and Culture, 2014; Expat and Offshore, 2014). In developing a restaurant in Oman, the entrepreneur needs to understand the business culture of the country, which is unique (Countries and Culture, 2014). The Omanis are practical and encourage others opinion; hence, the entrepreneur should acquaint himself with the local law and the way of living of the people, which will help him to run the business successfully. The Omanis believes in building strong relationship on trust and friendship. They give emphasis on hospitality and welcome new people in their country. It is a Muslim country and hence its business culture is different from that of the western countries. The Omanis enjoy doing business with foreigners and encourages small talk with them so that they can build a good relationship. They prefer direct eye contact, which gives them the confidence to communicate with others. The dress code of the Omanis is a badge, which highlights the ethnic identity of the Omanis (Expat and Offshore, 2014). Hence, the entrepreneur will find it easy to open its restaurant in Oman where the people embrace foreigners cordially (Countries and Culture, 2014; Globe Media Ltd., 2014). The entrepreneur should take into account the Oman labor law that defines how to treat workers in the country. In order to establish the restaurant, the entrepreneur should recruit Omanis, who have the ability to be a significant part of the restaurant business. Additionally, these employees will be responsible for building up the brand image of the restaurant and create a positive attitude among the customers, as they are main representative of the restaurants. The entrepreneur should consider the following rules that are related to the Labor law: The employer should document the details of the number of workers he/she has decided to hire to the Ministry along with the type of job, genders and wages. If the employers have the desire to hire foreign workers, then prior permission is needed from the Ministry and gives reasons why the Omanis are not selected for the job (Ministry Of Manpower, 2014). The employers should ensure that the Omani or foreign worker does not have any criminal record and are physically fit for joining the industry. The wages are denominated in the local legal currency and minimum wage limit should be taken into account, which is determined by the Ministry (Ministry Of Manpower, 2014). The wages are paid on working days and that is scheduled at monthly basis (Ministry Of Manpower, 2014). Workers are subject to annual leaves with the full salary; there are six days of emergency leaves. However, there are other leaves too such a special leaves. Three days leaves are provided in case of marriage of the worker, three days for the death of son, daughter, mother, father, brother, grandmother, sister and grandfather. Fifteen days for performing in Al-Haj (throughout the period of his service). One hundred and thirty days of leave after the death of husband of Muslim female worker. Working hours: Maximum 9 hours/day or 45 hours a week with ½ hour break for rest and food (Ministry Of Manpower, 2014). During Ramdan, the working hours are 6 hours/ days or 30 hours a week for the Muslim workers (Ministry Of Manpower, 2014). In case of over time, the employer will pay 25% extra during the day time and 50% during the night (Ministry Of Manpower, 2014). Females are not allowed to work after 9 pm till 6 am, if circumstances appear then the employer should take prior permission from the Ministry (Ministry Of Manpower, 2014; Kelly and Breslin, 2010). 50 days of maternity leave for the women when full salary is paid to them (Kelly and Breslin, 2010). Employer should not terminate a female employee because of her absence due to medical illness, confirmed by medical certificate (Ministry Of Manpower, 2014) The above mentioned rule is needed to follow by the entrepreneur if he is willing to set up the restaurant in Oman. Apart from the labor law, the land of Oman is also strict in few regulations that are imposed on restaurant business. The restaurants are not allowed to prepare any cuisine with pork as it is prohibited Omani diet. In the Ramadan season, the restaurants are closed as the Muslims fast for more than 12 hours. Drinks are allowed to be sold in the restaurant during the Ramadan period. Moreover, the restaurants should offer Halal food to the customer. Cultural difference between UK and Oman The following figure highlights the cultural difference between the UK and United Arab Emirates (UAE). Hofstede has not studied the cultural model of Oman and thus UAE is taken for the portraying the difference between the culture of two places. During the discussion of the framework, Oman is taken into consideration in place of UAE. Figure 1: UAE Vs UK (Source: The Hofstede Centre, 2014b) In the UK, every individual are regarded to be unique and this displays the degree of power for each of them. Here, power is defined as ability of a person to influence other’s behavior and ideas (The Hofstede Centre, 2014b). The employees in the UK do not work individually, instead hierarchy are formed for their convenience. The managers and employees hold meetings for discussing on particular issues and vital decision making. However, in Oman, individualistic nature is highly dominant, hierarchy is stringent in the companies and centralization of authority is highly preferred (The Hofstede Centre, 2014a). Hence, this vast difference in culture and business etiquettes is explained in this paper so as to assist the UK based entrepreneur in understanding the exact requirements for building the relationship with Oman. Analysis of the current situation in Oman PESTEL Analysis Political: Oman is governed by a Sultan and he is regarded as the head of government (Countries and Culture, 2014). Hence, he plays an important role in formulating the rules and regulations of the country and the industries need to follow it strictly as the non-compliance may lead to severe consequences. Hence, the restaurant should be set up in such a manner that it does not harm or disobey the rules of Sultan and provide a sound business in Oman. Economic: Oman’s main revenue is generated from oil and petroleum products and also forms the backbone of the country (Countries and Culture, 2014). However, majority of the population has concentrated on earning their livelihood through fishing and agriculture. There are several Western restaurants which are preferred by the population apart from their ethnic food. Hence, it will be easy for the entrepreneur to establish the restaurant business in Oman. Social: Majority of the Omanis are middle class while there are many aristocratic families, who own oil fields (Countries and Culture, 2014). Female plays an important role in family and contributes positively towards the family decision making. Nevertheless, outside the family, the women do not have much power to influence business decisions, where men take the stance. Technology: Technological environment has developed over the few decades as there is increase in number of technological providers in the country. Internet has become popular in Oman, which will help the restaurant to gain customers through online transactions (Countries and Culture, 2014). However, it failed to achieve high level of technological up gradation as compared to other countries around the world especially the Western countries. Environmental: The most important environmental problem in the country is drought as there is limited rainfall, which decreases the supply of water in the region. Drought will affect the restaurant business, as it needs higher volume of water for its successful operation. Moreover, the beaches are polluted by the frequent oil spill from the tankers (Countries and Culture, 2014). These polluted beaches affect the tourists to a great extent as they cannot enjoy the natural beauty and it will also affect the customers of the restaurant, if it is built on the beaches. Hence, Oman has poor environment condition, which indicates that the restaurant may encounter problem due to the mentioned disadvantages. Legal: The judicial system in Oman follows British Common Law and also the Arabic legal laws, which is very stringent. SWOT Analysis Strength Stable government and increased number of private investment in the country. Ensure positive relationship internationally. Literacy level is high and main population is youth. Weakness Lacks behind in technological up gradation as compared to other nations. Does not have good IT infrastructure as compared to other nations. Lack of skilled workers with respect to technology. Opportunity The government is positive towards foreign investment. The government has devoted themselves in amending their policies according to the change in external environment. The economy is subject to constant development. Threat The government does not encourage International organization. The government initiatives are not aligned with that of the central government. Solutions and recommendations In order to set up the restaurant business in Oman, the UK based entrepreneur has to become familiar with the laws and regulations of the country, so that the business does not violate any major rule. One of the significant way through which the entrepreneur can get acquainted with the rules and regulation of Oman is to follow the Rule book and Labour Law. It will help the entrepreneur get a wider view regarding the strict legislations of the country. The business culture in Oman is quite unique though the Omanis have positive outlook towards embracing foreigners cordially. This will assist the entrepreneur to build the restaurant successfully without encountering any challenge pertaining to non-compliance of Oman Law. The workers of the restaurant should be treated in accordance with the Labor law of Oman and females are not permitted to work late at night after 8 pm. The external factors such as political and legal environment can influence the restaurant business to a great extent. In order to protect the business from any external influence, the entrepreneur should take proper permission from government of Oman regarding the set up of the business and hiring of Omani youths. Forecasts and outcomes Cultural difference between countries may be eradicated by gaining enough knowledge attached with the cultural backdrop of the countries. The business etiquettes are considered to be the most important factor before setting up a business in any country. It is very crucial to have knowledge pertaining to the laws and regulations of the host country, as violation of any of them can lead to sever outcomes. The future of the restaurant business in Oman will be successful if the entrepreneur is wise enough to follow the country law and respect the sentiments and emotions of Omanis regarding food and culture. Reference List Countries and Culture, 2014. Oman. [online] Available at: [Accessed 28 November 2014]. Expat and Offshore, 2014. Living and Working in Oman. [online] Available at: [Accessed 28 November 2014]. Globe Media Ltd, 2014. Working in Oman. [online] Available at: [Accessed 28 November 2014]. Kelly, S. and Breslin, J., 2010. Women's rights in the middle east and north africa: progress amid resistance. Maryland: Freedom House. Ministry Of Manpower, 2014. Omani Labour Law. [online] Available at: [Accessed 28 November 2014]. The Hofstede Centre, 2014a. United Kingdom. [online] Available at: < http://geert-hofstede.com/united-kingdom.html > [Accessed 28 November 2014]. The Hofstede Centre, 2014b. United Arab Emirates. [online] Available at:< http://geert-hofstede.com/arab-emirates.html > [Accessed 28 November 2014].   Read More