| GCC-based businesses are currently faced with two | | | | national employees amongst the workforce. For |
| major challenges; namely the fall of protective | | | | some businesses, the answer to changing market |
| business barriers that have shielded regional business | | | | conditions is simple: restructure and scale down the |
| from external competition for many years and the | | | | workforce and wait for recuperation. The key |
| knock on effect of the global financial crisis. This | | | | decision that companies will have to make is how to |
| article addresses the forthcoming international | | | | reduce payrolls without losing the skills they will need |
| competition. | | | | when growth resumes. |
| Over the years, regional businesses have enjoyed | | | | The majority of businesses in the region, as is the |
| strong government protection that placed significant | | | | case in many other parts of the world, are family |
| entry barriers against international competition. This | | | | owned businesses. Large scale companies in the |
| has enabled local businesses to prosper and | | | | Middle East are often partly government owned. |
| accumulate significant wealth; such barriers include the | | | | Different ownership structures, conflicting chain of |
| exclusive distribution rights of multi-national | | | | commands, and company priorities make it extremely |
| enterprises' products, a high level of custom duties | | | | challenging to steer the business forward. For such |
| on imported competing products, and tough foreign | | | | structure, managing the board of directors and |
| investment laws preventing many foreign investors | | | | investors requires a clear perception of the |
| from entering the region. | | | | interrelationship between owners and chain of |
| However; the accession of many Arab Gulf countries | | | | commands, their motives and aspirations. |
| to the World Trade Organization (WTO) in the mid | | | | Strategic guidance, by ensuring that proper corporate |
| 1990s is changing that. To lessen the impact of | | | | governance is in place, is an increasingly pressing issue |
| competition, Gulf countries were granted ten year | | | | for regional leadership. The global urge for increased |
| grace periods before scrapping protection. Such grace | | | | transparency and better business ethics is |
| periods are now expiring and as a consequence | | | | reverberating around the region, as much as in any |
| regional businesses are now facing fierce competition. | | | | other region of the world, and the regional move |
| In view of the above, regional businesses have no | | | | towards converting companies from private |
| choice but to adapt to new realities, playing by the | | | | ownership to publicly listed companies demands far |
| same rules as the rest of the world, yet benefiting | | | | higher levels of exposure and shareholder |
| from being local and well-established players. They | | | | accountability than was the case three years ago. |
| are somewhat disadvantaged by their limited size and | | | | In the face of fierce competition, opportunities for |
| less mature organization structures and incoherent | | | | merger and acquisition should be carefully considered. |
| workforce. For regional business leaders, these new | | | | Small businesses competing with each other within |
| realities pose as major challenges. | | | | specific industry sectors have little or no chance to |
| The ability of regional businesses to embrace change | | | | compete individually with multi-national competitors. |
| and to react positively to them is paramount, and | | | | Larger organizations with the desire to grow or |
| could be detrimental to the survival of some | | | | expand their business laterally, vertically and/or |
| unprepared businesses. "Corner-shop" business | | | | horizontally in strategic areas may consider acquisition |
| mentality and poor management practices of the | | | | as a viable option, but must be aware of the pitfall of |
| past are no longer adequate in an era of open | | | | acquisition and the need to hire specialist skills to |
| competition. Organizations' leaderships have to be at | | | | support merger and acquisition initiatives. |
| the forefront of their industry dynamics and remain in | | | | In the face of challenges confronting regional |
| touch with customers' changing requirements, | | | | businesses, companies have no choice but to |
| adopting customer-centric strategies as opposed to | | | | embrace change, capitalize on their understanding of |
| traditional business practices. | | | | the region and strategize to not only survive the |
| Change management is imperative in the region at | | | | competition, but also to grow and prosper, benefiting |
| the moment because many organizations are | | | | from the low costs of raw materials, energy and |
| changing from family partnerships to corporations. | | | | labor. |
| Thus, the leadership must be capable of planning and | | | | The onus falls on the board of directors as well as |
| implementing change throughout the organization. | | | | leadership to build professional enterprises with a |
| Managing change is therefore one of the key | | | | skilled and motivated workforce, governed by |
| business attributes that Gulf leaders require in today's | | | | business practices and processes that facilitate |
| rapidly changing corporate climate. | | | | progress and recognize achievements. A visionary |
| The absence of a corporate culture that molds | | | | leadership with a long-term strategy, supported by a |
| employees of different nationalities and backgrounds | | | | clear and decisive action plan is a sure way to |
| poses a major challenge to regional CEOs; particularly | | | | prosperity. |
| as pressure intensifies to increase the number of | | | | |