Studies claim that the prosperity of multinational corporations within the Middle East hinges not only on economic acumen, but also on understanding and integrating into local cultures.

Much of the prevailing literature on risk management strategies for multinational corporations highlights particular uncertainties but omits uncertainties that are tough to quantify. Indeed, plenty of research within the international administration field has centered on the management of either political risk or foreign currency exchange uncertainties. Finance and insurance literature emphasises the danger factors which is why hedging or insurance coverage instruments can be developed to mitigate or move a firm's danger exposure. However, present studies have brought some fresh and interesting insights. They have sought to fill an element of the research gaps by giving empirical knowledge about the risk perception of Western multinational corporations and their administration strategies on the firm level within the Middle East. In one investigation after gathering and analysing data from 49 major worldwide companies which are active in the GCC countries, the authors found the following. Firstly, the risk connected with foreign investments is actually far more multifaceted compared to frequently analyzed variables of political risk and exchange rate visibility. Cultural danger is perceived as more essential than political risk, financial danger, and economic danger. Secondly, even though elements 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.

Regardless of the political uncertainty and unfavourable fiscal conditions in certain parts of the Middle East, international direct investment (FDI) in the area and, particularly, into the Arabian Gulf has been gradually increasing within the last two decades. The relevance of the Middle East and Gulf markets is growing for FDI, and the linked risk appears to be essential. Yet, research regarding the risk perception of multinationals in the region is limited in volume and quality, as consultants and attorneys like Louise Flanagan in Ras Al Khaimah may likely attest. Although different empirical studies have investigated the effect of risk on FDI, most analyses have largely been on political risk. Nonetheless, a new focus has appeared in present research, shining a limelight on an often-overlooked aspect specifically cultural facets. In these revolutionary studies, the authors pointed out that companies and their administration usually really neglect the effect of social facets because of a lack of knowledge regarding cultural variables. In reality, some empirical research reports have unearthed that cultural differences lower the performance of multinational enterprises.

This cultural dimension of risk management calls for a shift in how MNCs work. Conforming to regional traditions is not only about being familiar with company etiquette; it also involves much deeper cultural integration, such as appreciating local values, decision-making styles, and the societal norms that influence business practices and employee behaviour. In GCC countries, successful business relationships are made on trust and personal connections rather than just being transactional. Moreover, MNEs can take advantage of adjusting their human resource administration to reflect the cultural profiles of local employees, as factors influencing employee motivation and job satisfaction vary widely across cultures. This requires a shift in mindset and strategy from developing robust financial risk management tools to investing in cultural intelligence and local expertise as consultants and solicitors such Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest.