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

This cultural dimension of risk management demands a change in how MNCs run. Adjusting to regional customs is not only about understanding company etiquette; it also requires much deeper cultural integration, such as for example appreciating regional values, decision-making styles, and the societal norms that affect company practices and employee conduct. In GCC countries, successful company relationships are made on trust and individual connections rather than just being transactional. Furthermore, MNEs can reap the benefits of adapting their human resource administration to reflect the social profiles of local workers, as factors affecting employee motivation and job satisfaction vary widely across countries. This requires a change in mindset and strategy from developing robust economic risk management tools to investing in cultural intelligence and regional expertise as consultants and attorneys such Salem Al Kait and Ammar Haykal in Ras Al Khaimah would probably suggest.

Much of the present literature on risk management strategies for multinational corporations illustrates particular uncertainties but omits uncertainties that are difficult to quantify. Certainly, plenty of research in the worldwide management field has centered on the handling of either political risk or foreign exchange uncertainties. Finance and insurance coverage literature emphasises the danger factors which is why hedging or insurance instruments could be developed to mitigate or move a firm's risk visibility. However, current research reports have brought some fresh and interesting insights. They have sought to fill the main research gaps by giving empirical knowledge about the risk perception of Western multinational corporations and their management methods on the firm level in the Middle East. In one research after gathering and analysing data from 49 major worldwide businesses that are active in the GCC countries, the authors discovered the following. Firstly, the risk connected with foreign investments is obviously a lot more multifaceted compared to the frequently analyzed variables of political risk and exchange rate visibility. Cultural risk is perceived as more crucial than political risk, monetary danger, and economic risk. Secondly, despite the fact that elements of Arab culture are reported to really have a strong influence on the business environment, most firms find it difficult to adapt to regional routines and traditions.

Despite the political instability and unfavourable economic climates in certain parts of the Middle East, foreign direct investment (FDI) in the region and, especially, into the Arabian Gulf has been steadily increasing in the last 20 years. The relevance of the Middle East and Gulf markets is growing for FDI, and the connected risk is apparently essential. Yet, research regarding the risk perception of multinationals in the area is limited in quantity and quality, as experts and attorneys like Louise Flanagan in Ras Al Khaimah may likely attest. Although different empirical research reports have examined the effect of risk on FDI, many analyses have largely been on political risk. Nonetheless, a fresh focus has emerged in recent research, shining a spotlight on an often-overlooked aspect namely cultural factors. In these pioneering studies, the authors pointed out that companies and their management often seriously neglect the impact of cultural factors due to a lack of knowledge regarding cultural variables. In fact, some empirical research reports have unearthed that cultural differences lower the performance of international enterprises.