Recent advances in technology and transportation make conducting business on a global level possible. Where once international markets were open only to companies with large capital resources, today's business environment makes even small and medium-sized companies able to participate in the international arena. Companies are now looking at the Middle East as a potential market, and some companies, including Fluor and Bechtel, have been successful in conducting business in this region. However, unique features of this region means companies considering doing business there need to be considered. This research examines some of the issues which affect global trade in general and some of the specific issues which are peculiar to the Middle East.
Any company which conducts business on an international level takes on a higher level of risk than those which conduct business only domestically. Transportation and logistical issues come into play in a way which they do not, typically, for domestic operations, and companies must also find ways to negotiate international law and the laws of the target country successfully. Both domestic and foreign legal issues must be addressed when exporting, and the companies often must follow strict guidelines with regard to the type of products which may be exported and imported in various countries. In addition, companies take on currency risk, which reflects the difference between the value of goods and services when measured in one currency versus their value when measured in another. Some companies use "hedging" to avoid currency risk ("World Bank," 1996, p. 16).
Aside from the legal environment in which companies must operate, international organizations also encounter significant challenges in culture and language. Different countries have different cultural expectations when conducting business, and personnel from one company must rely on translators or find other ways to overcome the l...