Culture And Business In UAE - A Pestel Essay

Diverse society and culture of United Arab Emirates

Discuss about the Cross Cultural Management of UAE.

It is to be mentioned that United Arab Emirates is a country with a diverse society. The culture of United Arab Emirates has been greatly influenced by Arabian, Persian and Islamic cultures. The influence of foreign culture is reflected in the Music, attire, cuisine, life styles of UAE. As it is a Muslim dominated country, Muslims are called to prayer five times a day from the mosques, scattered all over the country. It is to be mentioned that weekends in UAE begin on Friday, as it is considered to be the holiest day for the Muslims. Most Muslim countries in the world have Thursday-Friday or Friday-Saturday weekends. The Emirati culture has been notably influenced by Persian and Arabian culture. Such influence is visible in the architecture of Emirates and folk arts (Al Mazrouei, & Pech, 2015). It is to be stated that due massive growth in trade and remarkable growth of the economy of UAE expatriates from more than two hundred nationalities have migrated to UAE to seek better lifestyles. However, UAE has been criticized by many for the reason of perpetuating a class-based society. Most of the migrant workers of UAE belong in the lower class of the society. Ethnic tensions are rarely reported in UAE despite having people of diverse ethnicities. The ones that are reported happen primarily between the expatriates of UAE. The important holidays in Dubai are Ed-ul-Fitr which happens at the end of Ramadan and the National day(2^nd December)which marks the formation of the United Arab Emirates. UAE’s population has been estimated by the U.S, department to be 9 million. However, the citizens of the UAE account for 15-20 percent of the total population. The main religion followed in the United Arab Emirates is Islam. 96% of the population of UAE is comprised of Muslims. Hindus and Christians are minorities in the country. The official language of the country is Arabic. English, Hindi, Persian and Urdu are the other languages that spoken in the country. 

 It is to be mentioned that UAE is one of the most affluent countries in the middle-east ranking among the top 25 gross domestic products per capita in 2014. The country earns the most profit by exporting oil and other fossil fuels. The secondary sources of income of the country include income from tourism and industry sectors. A Pestel analysis can be done to assess the Specific political, economic, social and technological legal and environmental factors that contribute to the country’s success.

Factors affecting the growth and success of the country

Political factors –

The political factors that affect the growth and success of the country are:

• UAE has good trade relations with most of the countries of the world
• Each of the seven emirates has independent governments which ensures flexible management of the country
• One of the negative political effects includes political conflicts with adjacent countries about the ownership of oil reserves

Economic factors-

Assessing a country’s economy is of utmost relevance when looking at its standings. Some of the economic factors affecting the country are:

• Exceptional high GDP per capita of the country (Davies, Kraeh & Froese, 2015).
• Exceptionally low unemployment rate prevailing in the country
• Highest amounts of direct and foreign investments

Social factors

Some of the social factors that have been observed and known to be existing in UAE include:

• Comfortable and upgraded life styles of the inhabitants of the country due to their high paying jobs
• Mixture of many different cultures existing in the country as a result of the globalization
• Religion is given very much of importance in the UAE and is known to greatly affect the society. A specific example of religion’s impact on the society is the clothes worn by the native women and the men of UAE

Technological factors

It is to be mentioned that in today’s world technological variables are most prominent. It can be stated that UAE has achieved remarkable technological advancement in the modern time due to its wealth and its tech-savvy population. The technological factors affecting UAE are:

• Wealth possessed by the country allows the same to purchase new equipments which contribute to the technological advancement of the country.
• Young tech-savvy population of UAE allows different companies existing in UAE to leverage technology.

Legal factors

It is to be mentioned that it is difficult to discuss the legal factors of a country that affect it as a whole. However, it is to be mentioned that for companies to be operational in the UAE, they need to be registered at the Sovereign Companies Registration Office.  Trademarks of commodities and products also need to be registered in Sovereign for seeking legal protection. A bank of a NON EEA country, to be operational in Abu Dhabi needs special permission from financial supervision authority.  

Environmental Factors

It can be noted that in pestel analysis the environmental factors are discussed at last. Therefore the environmental factors which affect UAE are:

• The country has a hot and dry climate which has an impact of many aspects. For instance due to the adverse climate of UAE affects productivity of the county. Productivity of a country tends to suffer and become slower due to the hot and dry climate. Farming is not possible in most areas of UAE because of the adverse climatic conditions and desert cover. Air conditions have the potential to sell well in UAE due to the hot and dry climate.
• The location of UAE facilitates sea trade as it is strategically located near a few coasts.

It can be mentioned that the ability of people to work with others and communicate with people belonging from different cultures is a key skill needed to be possessed by expatriates to be successful in any country. However, how to acquire such skill and competence is not defined by any academic literature. Expatriates need to be adept communicators to be successful in every field of business (Al Mazrouei, & Pech, 2015). Learning the language spoken in UAE, Arabic can be of significant help to expatriates in improving their intercommunication skills. However, it can be stated that learning a local language is not always relevant and beneficial if the expatriate is on short term contract. However, language barrier is not a major problem in the UAE as English is widely spoken in the country. Most of the business deals in the UAE are conducted in English (AlMazrouei & J. Pech, 2014). It can be stated that showing interest and willingness to learn a language by the expatriates is more important than learning the local language of any country.

Picking up non verbal cues effectively is also essential for understanding how subtle messages are conveyed in other cultures. It is to be stated that gestures mean different things in different countries of the world. Cross cultural competence also impacts management styles (Bealer & Bhanugopan, 2014). Expatriates can discover that participative management may not be the best method of management in a country like UAE. The difference in management styles is particularly profound in hierarchical societies. It can be mentioned that in hierarchical societies asking for input from colleagues is viewed with suspicion.

Importance of cultural adaptation strategies for expatriates

Upon arrival in a new country expatriates are likely to go through different stages of culture shocks. It is expected for every person to be excited to be in a new environment and fascinated with the host culture. Immediately after arrival expatriates are likely to make disapproving remarks about the features of the host culture, compare it with their home culture or sometimes even go overboard in appreciating the host culture in order to adapt to it quickly. However, after this initial phase expatriates tend to feel increased antagonism towards the host culture and tend to assess such culture in their own terms of morality (Holden, Michailova & Tietze, 2015). This can lead to aggression towards the natives of the country while the expatriate tries to reconnect with the people. Therefore it can be stated that successful expatriates are those who embrace the host culture and tend to overlook the cultural differences existing. It can be said that successful expatriates become comfortable while dealing with unfamiliar situations. They become more tolerant of cultural habits which were probably disturbing to them previously. In UAE western expatriates should be familiar with the practice of light slapping of the other’s hand instead of insisting on the typical western handshake while greeting any person. Expatriates must be skilled at predicting when cross cultural conflict may arise and how to avoid such conflict while addressing any topic (Michailova & Tietze, 2015).

It can be stated that the path to attain intercultural competence is not clearly defined. Therefore, it is better to measure a person’s technical skills and achievements in academic discipline than to discuss how competent he is working with people of different cultural backgrounds. Expatriates need to be adventurous and have the desire to have new and exciting experiences in the new country. They should be able to understand the culture they are living in and try to fit in such culture. This characteristic of expatriates is defined as cultural sensitivity. Expatriates should also have curiosity to learn about the features of the host culture and adapt to the new environment. Being curious and inquisitive is generally listed as a factor which contributes to the success of an individual. An expatriate must also be open minded and must try to perceive the new environment differently. They need to be willing to try new methods accept failure as a means to improve themselves and learn new things.      

It can be mentioned that UAE has witnessed enormous growth rate in the past two decades and has been a hotspot for many entrepreneurs to explore different business ideas (Elkelish & Hassan, 2014). The growing economy and the thriving tourism industry have positively impacted the real estate sector. Developments in the real estate sector can be visible in the form of stylish and luxurious hotels and flashy sky scrapers. It can be mentioned that demand for media services in the UAE has witnessed an all time high due to the growth rate of the diverse industrial sectors. Therefore any expatriate will have the opportunity to explore different business opportunities in UAE and make effective use of the media services. However, expatriates need to be tolerant to UAE’s culture and adapt to the different lifestyle.

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AlMazrouei, H., & Pech, R. J. (2015). Working in the UAE: expatriate management experiences. Journal of Islamic Accounting and Business Research, 6(1), 73-93.

AlMazrouei, H., & J. Pech, R. (2014). Expatriates in the UAE: advance training eases cultural adjustments. Journal of Business Strategy, 35(3), 47-54.

Elkelish, W. W., & Hassan, M. K. (2014). Organizational culture and corporate risk disclosure: an empirical investigation for UAE listed companies.

Holden, N., Michailova, S., & Tietze, S. (Eds.). (2015). The Routledge companion to cross-cultural management. Routledge.

Bealer, D., & Bhanugopan, R. (2014). Transactional and transformational leadership behaviour of expatriate and national managers in the UAE: a cross-cultural comparative analysis. The International Journal of Human Resource Management, 25(2), 293-316.

Michailova, S., & Tietze, S. (2015). The Routledge Companion to Cross-Cultural Management.

Davies, S., Kraeh, A., & Froese, F. (2015). Burden or support? The influence of partner nationality on expatriate cross-cultural adjustment. Journal of Global Mobility, 3(2), 169-182.