Both African countries and the Middle East region are very diverse in terms security environment and it may be applied towards the personnel security as well. The company’s staff may become involved into Ēėinsurgencies, resource and identity conflicts, and post-conflict stabilization to growing threats from piracy, narcotics trafficking, violent extremism, and organized crime’. (Armario, Ruiz and Armario, 2008)
These circumstances create the challenges for the human¬†resource management. It means that as the director responsible for security issues I have to instruct HR department to prepare for a quick and effective response to the extreme conditions imposed by the local unsafely to the security of the company’s employees. ¬†The internationally operating organizations require the employees that are capable to operate internationally. Therefore the international human resource management becomes an increasingly important factor that influences the success of organizations.¬† HR¬†professionals of the company that aims to enter the markets of African countries and the Middle East region must understand the implications of the local conditions and social trends. ¬†In addition it has to be mentioned that culture has a large impact over company’s [performance in African countries and the Middle East. The understanding of the cultural context is crucial, because in order to achieve successful outcome, HR managers have to modify their own behaviors and their approach to organization to be more effective. (Briscoe & Schuler, 2004) Taking into account cultural differences between countries and their importance in the modern business world, awareness and understanding o the cultural context actually allows HR team to coordinate the international HR strategy and fulfill their international responsibilities more efficiently than before. Issues related to the culture include the following: culture shock, failure to adjust to a different culture and/or living conditions, family isolation and alienation, uncertain or inadequate career pathing, failure to gain acceptance in the new location, lack of role clarity in the new work environment, special problems with dual career families, amplification and exaggeration of internal family problems. (Yusoff, Abdullah & Baharom, 2010)
Again, African countries and the Middle East countries are very diverse.¬† The knowledge of cultural customs can help avoid misunderstandings and enable to establish understanding and cooperation. The interaction between employees that represent different cultures contains the potential for enhanced communication and understanding but unfortunately it also suggests the possibility of miscommunication and misunderstanding. People usually¬†learn¬†their core values, beliefs and attitudes early in life and change them only with great difficulty. They may resist discussion of them, considering them personal, private, or even sacred. Frequently these elements of nonmaterial culture may be learned by outsiders only through lengthy and careful observation.
- Business continuity
Another extremely important factor that every company that aims to expand its operations to an international market has to consider is business continuity.
One of the characteristics of the developing countries is that market rules and conditions are subject to change and making business continuity very complicated to achieve. (Cooke, 2003)
But it needs to be said that Africa and the Middle East have very traditional values and norms. These traditional values and norms create a good basis for the development of business there.
The lack of policies, lack of profit opportunities, inconsistent setup, negative perceptions, and shortage of skills, labor regulations, poor infrastructure and corruption are the major risk factors for the international business that wants to enter the market of developing country.¬† (FDI Africa policy brief, 2011) Other negative factors include long time for receiving the approval to start the business, and the usage of bribes. Some initiatives are undertaken by the local governments to improve the business climate: they design and implement policies, they create necessary institutions and also they conclude the needed investment contracts.¬† Emery et al (2000) provides the factors of regulatory environment that create risk for the international business in developing countries that make the confident business operations quite complicated:
- Unnecessary delays¬† for approval of paperwork,
- The regulations are hard to obtain, the regulatory institutions often are not computerized, and therefore too much time is required for the processes of¬† business registration and application,
- Duplication of effort among agencies, which require the same information, and
- High costs caused by the requirements for company formation and up-front capital taxes. (Emery et al, 2000)
It needs to be pointed out that it is the responsibility of the government to adopt required changes into business and investing sectors regulations, into economic conditions, and infrastructure. Clearly, local population also should be interested in such development, and improve its customer service to make the conditions for the foreign investors more easy and comfortable.
The conclusion could be made that despite Africa and the Middle East are very attractive regions for the business expansion, their political/administrative,¬† economic and social environment imposes substantial threats to the organizations that consider expansion into these markets. Both Africa and the Middle East are relatively risky and unsafe destinations for the launch of the business because in the majority of cases local condition and regulations have significant negative influence over the business processes.
Assessment of the potential threats to the company that aims to launch its business in particular region has shown that political/administrative threat such as corruption, terrorist threat, social and cultural differences are the major attributes of unstable business environment of these countries. These threats affect company’s operations such as shipping, personnel security, and business continuity. The situation in these countries may be improved by the development of enabling environment. Basically it means the improvement of legal, political, social and economic environment. These things of course can’t be implemented without appropriate policies and practical efforts of the national governments.
Why does the business consider it risky to enter these markets? Besides the external reasons that were already mentioned, such as economic global trends, and the political instability, these countries are blamed for a number of reasons in the context of investments attraction, such as market size, lack of policies, lack of profit opportunities, inconsistent setup, negative perceptions, and shortage of skills, labor regulations, poor infrastructure and corruption. (FDI Africa policy brief, 2011)