Global Perspectives in Business - Essay Example

? MEMO Work Position Export/International Business Development Director Opening a business branch in Qatar Political Situation Qatar is an absolute monarchy with the Al Thani dynasty being in power since the country's independence from Britain in 1971. The Supreme Chancellor heads the government and has power to hire and fire ministers including the prime minister. His power directly affects the business situation as it is he who appoints policy makers. The council of ministers proposes laws which are then passed to the legislative advisory committee which authority is limited to only proposing changes. The country observes a blend of common and Sharia laws, but the latter are only applied in family law and punishment of various grave crimes. The country has been described as one of the most stable Middle Eastern economies with a relatively good security situation. Since the Gulf War in which the country was involved, Qatar has been a peaceful haven for business activities in the area. The government plays a huge role in the determination of what businesses should or should not run. The government has in recent times executed heavy censorship in the liquor and food businesses to the point of being authoritarian where different liquor businesses have been closed and no explanation offered for the same. Other businesses have, however, been running independently. The country has good bilateral relationships with the United States and there are many US companies operating in the area, hence it will be easy to establish our operations. American workers and companies face a little discrimination in the country as the country's leadership attempts to maintain a pious image elsewhere while projecting the West as corrupt. There are, however, no incidences of extreme fundamentalism. Economic Systems and Situation Qatar's economy is hugely oil-based. The country has huge oil reserves that are estimated to continue at least for another century. The country has attempted to diversify from petroleum although it still accounts for more than 50% of the country's Gross Domestic Product. The country embraces the ideals of free trade with limitation to business enterprises that have a connection with the Sharia law. The country has an effective tertiary industry with easily accessible banking and insurance services. The Qatar financial center affords financial institutions globally competitive services, capital support and interest free loans (“World's Richest Countries”). The country has a cheap and efficient road transport owing to the low prices of petroleum and a word-class road network. Communication is as well developed with good Internet and telephone coverage. The country has a good number of local and international media stations. Labor Laws The government prohibits labor unions and industrial strikes. There are also unfair working relations where migrant workers are paid less than citizens for the same job qualification. This has led to issues that affect companies in the region negatively as they follow payment schemes in the same way that the government does. Purchasing Power Qatar is the richest country in the world in terms of GDP per capita. The business magazine Forbes ranked Qatar 1st in 2010 GDP per Capita in 2010 and reported that the country recorded 19 per cent economical growth, which was the highest in the year in the world. Increase in exports of liquefied oil, natural gas, petrochemicals, and diversification of products in related industries are credited for this. In terms of human development, Qatar is the second-highest in the Middle East and North Africa region, only second to the U.A.E. In 2009, United States made its fifth-largest export in the Middle East in Qatar, surpassing earlier more favorite export markets such as the U.A.E., Saudi Arabia, Israel, and Egypt (“World's Richest Countries”). Cocona Fabrics, established in the late 2005, has come up with fast-drying fabrics that effectively protect against ultraviolet rays and manage sweat and other odors. They use natural technology where coconut shells are recycled. The products are expected to be a favorite in Qatar where searing sun heat reaches up to forty degrees Celsius. Cocona Minerale's revolutionary 2008 volcanic mineral fabrics have fared extremely well in the Arab population in our European market and are expected to do even better in Qatar as they are cool and will suit the Qatari climate. The high standards of living will provide a good background for high sales due to high purchasing power of the general populace. With a population of 2,500,000 citizens, the Qatar labor market has attracted expatriates from neighboring Arab nations, who make up 20% of the population, the Indian subcontinent (Indian exports of skilled labor to Qatar are 20%, 13% comes from Nepal while Pakistan and Sri Lanka account for 5%), Southeast Asia (10% from Philippines), and other countries (5%) Workforce Qatar has enough professionals and unskilled labor and we will, hence, have no need to import labor for our operations in the country. There are a good number of international companies in various sectors that work in Qatar. Expatriates from different countries have settled there, which brings a surplus of labor. Labor from immigrants is relatively cheap and easily obtainable. Ease of Doing Business Qatar is ranked fortieth out of 186 economies on the World Bank ease of doing business index; it is ranked 107th in terms of the ease of starting a business and 26th in the ease of getting electricity. It is ranked 38th in registering property. In getting credit facilities, the country ranks 97th while in paying taxes, it ranks 2nd; it is ranked 75th in international trade, 96th in enforcing contracts and 96th in solving insolvency (Doing Business). Qatar has been getting easier to work in by the year and is currently one of the easiest countries to trade in the region. The country is easier to work in than most in which our company operates. Assessment of the Company's Readiness to Export to Qatar The company has both the organizational structure and motivational factors to export our products to Qatar. The export will give us a global look. The fact that we sell our products only in Europe and North America defines us as a Western company. Expansion to the East will ensure long term expansion of Cocona Technology Inc. The export will also serve as a pilot project on how favorable further expansion of Cocona Technology Inc. the Middle East would be to the company's financial status. The export will also improve return on investment. Exporting to Qatar has long term objectives due to the high amount of outlay, but as the business and political situation in the country is expected to continue, returns on investment are expected. Due to the company's export business to Europe, the company has the organizational structure in place to cater for the new venture. Our products are also ready for the Qatari market as they have proved a success domestically and in Europe. They do not require modification to suit the Qatari market; they do not require any training on use; they do not require much aftersale support and do not require any special licenses to be sold in Qatar. The company will have to prove committed to respecting the ideals that the Islamic government holds dear and may have to give its employees training on how to work in Qatar without offending the government and/or the general population since the government can sabotage our operations if we fall afoul. However, the likelihood of such an incident is extremely slim. The company also needs to be registered with our Doha embassy to ensure smooth running. Social Situation The Qatari culture in terms of music, art dress and cuisine to a large extent resembles the culture of many Middle Eastern countries. The populace is mostly Islamic though limited freedom of worship is afforded to non-Muslims. Christians can, for instance, pray in their churches but must ensure that their prayers do not bother the Muslim worshippers and that they do not display their paraphernalia and religious objects such as crosses. Women are still treated as inferior to men in education, jobs and other fields. In many senior decision making processes, women are usually left out. The country, however, respects decisions by foreign firms to hire women. However, local businesses may not appreciate a situation where a woman heads a corporation, and may desist from doing business with such a company. It is, therefore, imperative that the top brass of our company branch in Qatar is purely male. Corporate Social Responsibility For over twenty years, Qatar has had environmental issues, ranking first in the world in the carbon dioxide emitted per capita. It is, therefore, a responsibility of corporates working in the area to reverse this. The company will have fulfilled its social responsibility by addressing this through measures such as planting trees to act as carbon sinks. As the emission is mainly caused by extensive use of energy, it may be prudent for the company to do its best to reduce its energy use in its daily operations. Education for girls is also lagging behind and the company can do its part in reversing this by giving education opportunity to girls and employing educated women to act as role models for younger girls. Works Cited “World's Richest Countries.” Forbes. Web.3 Dec 2012. Doing Business. World Bank. International Financial Corporation. 2012. Web. 3 Dec 2012. Read More