Studies claim that the prosperity of multinational companies in the Middle East hinges not just on financial acumen, but in addition on understanding and integrating into regional cultures.

This social dimension of risk management calls for a change in how MNCs operate. Adapting to regional traditions is not just about being familiar with business etiquette; it also involves much deeper social integration, such as appreciating regional values, decision-making designs, and the societal norms that affect business practices and employee conduct. In GCC countries, successful company relationships are built on trust and personal connections instead of just being transactional. Additionally, MNEs can benefit from adapting their human resource management to mirror the cultural profiles of local workers, as variables influencing employee motivation and job satisfaction vary widely across cultures. This involves a change in mind-set and strategy from developing robust monetary risk management tools to investing in social intelligence and local expertise as experts and attorneys such Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely suggest.

Despite the political instability and unfavourable fiscal conditions in a few areas of the Middle East, international direct investment (FDI) in the area and, specially, into the Arabian Gulf has been steadily increasing over the past two decades. The relevance of the Middle East and Gulf markets is growing for FDI, and the associated risk appears to be crucial. Yet, research on the risk perception of multinationals in the region is lacking in volume and quality, as professionals and solicitors like Louise Flanagan in Ras Al Khaimah would probably 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 materialised in present research, shining a limelight on an often-disregarded aspect particularly cultural variables. In these groundbreaking studies, the writers noticed that companies and their management often seriously take too lightly the impact of cultural facets as a result of not enough knowledge regarding social factors. In fact, some empirical studies have found that cultural differences lower the performance of multinational enterprises.

Much of the prevailing academic work on risk management strategies for multinational corporations illustrates particular uncertainties but omits uncertainties that are tough to quantify. Certainly, lots of research in the international administration field has been dedicated to the management of either political risk or foreign exchange uncertainties. Finance and insurance literature emphasises the danger variables for which hedging or insurance instruments are developed to mitigate or move a firm's risk visibility. But, present research reports have brought some fresh and interesting insights. They have sought to fill area of the research gaps by providing empirical knowledge about the risk perception of Western multinational corporations and their management methods at the firm level within 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 related to foreign investments is obviously much more multifaceted compared to the often examined variables of political risk and exchange rate visibility. Cultural risk is regarded as more crucial than political risk, financial danger, and financial risk. Secondly, despite the fact that aspects of Arab culture are reported to have a strong impact on the business environment, most firms struggle to adapt to regional routines and customs.