Introduction
The topic of this study is the peculiarities of doing business in Kuwait. It relates to the existing theory as it deals with business management in a particular country. This study will bring knowledge about the specifics of doing business in Kuwait, which will be the basis for further analysis. It will help future entrepreneurs understand the specifics of doing business in Kuwait.
The state of Kuwait is the eighth largest exporter in the world and the tenth largest oil producer with a small territory, which is a reasonable goal for a small business (Dana et al., 2021). Kuwait’s geopolitical location in the northern Persian Gulf, limiting three important markets: the KSA, Iraq, and Iran, is an ideal area to reach markets in various countries, including East Asia, Turkey, and Eastern and Central Europe (Sazmand & Ramezani, 2021). Kuwait has various modern areas, the largest of which are Shuwaih, Sabhan, and Shuaybah.
The free trade zone located in the port of Shuwaikh has offices for importing and exporting goods, materials, and other related activities. Kuwait has very high purchasing power, which is why many of the world’s significant economies want to work with it: for tens of billions of dollars from oil sales, the country imports nearly everything – food, building materials, transportation, spare parts, clothes (Al-Reesh, 2022). Its primary suppliers are the United States, Japan, Germany, China, and Saudi Arabia (Arman et al., 2022). Oil refining and petrochemicals are at the top of the list of industries.
Kuwait’s energy industry is based entirely on the use of fossil fuels. The country generates about 31.6 billion kWh of electricity annually over its domestic consumption (Al-Nassar et al., 2019). 31.6 billion kWh of electricity is much higher than domestic consumption (Al-Nassar et al., 2019). Developed are construction, consumer goods, fertilizer production, and the food industry (Wilson, 2021). Industrial units for seawater desalination are in operation (Adžić & Almutairi, 2021). Science-intensive sectors, such as the electronics industry and others, have developed as the quality of education improved.
The banking sector is active in the country, and the service sector is expanding. The present financial and economic crisis forced Kuwait’s administration to adopt suitable measures to expedite the growth of the local economy’s petrochemical industry (Ben Hassen, 2022). This is vital to guarantee the country’s economic stability during the era of low oil prices and to raise revenues while adhering to OPEC output quota constraints (Al-Merri, 2020). The state actively encourages the growth of established sectors of the economy by providing loans and the required infrastructure. It promotes the adoption of new, advanced industrial directions in the country. The research question is how profitable it is to open a business in Kuwait and the features of this activity.
Literature Review
Organizational Management Through Strategic Planning in Kuwait
The first article that may be useful in this topic is the work of Ahmed Nahar Al Hussaini, “Organizational management through strategic planning and financial practices: an empirical evaluation of commercial firms in Kuwait.” This research examines the link between strategic planning as a business management component and financial management (FM) practices (Hussaini, 2019). Employees of various businesses operating in Kuwait are overseen to attain this purpose (Alzougool et al., 2021). This article demonstrates that several aspects of strategic planning, such as staff turnover, asset protection, and the establishment of financial budgets in specific organizations, are highly connected to financial management success.
The study’s relevance may be considered a novel contribution to the existing research and an integration of strategic planning and financial management (Hussaini, 2019). Furthermore, the study’s findings help companies’ strategic planning and financial departments improve their future development. This article will help to look at business management in Kuwait from the inside to understand its strengths and weaknesses.
Family Entrepreneurship and Banking Support in Kuwait
The following article I want to review is Noor Mahdi Abdullah’s “Family Entrepreneurship and Banking Support in Kuwait: Traditional and Islamic Banks.” This article investigates the family business and its financial backing in Kuwait, one of the world’s wealthiest countries. It begins with a review of the Kuwaiti backdrop of entrepreneurship and small and medium-sized firms (SMEs), then moves on to a study of the family business profile and its economic and social advantages (Abdullah, 2021). The essay investigates Kuwait’s banking system and its influence on family entrepreneurship and the small company sector growth. This study examines and evaluates different support items that can point family company owners and SMEs in the right direction when they want assistance.
There is also information on the similarities and contrasts between Islamic and conventional banking. This is one of the earliest documents highlighting family enterprises and entrepreneurship in Kuwait and the assistance they receive from Islamic and regular banks (Al-Shamali et al., 2021). It features accurate quotes on the subject from family business entrepreneurs.
Compared with most Gulf Cooperation Council countries, Kuwait’s financial market was until recently closed and strictly regulated (Zainal, 2022). However, changes in the legislation show the government’s intention to liberalize the financial services sector and diversify the structure of the industry in order to turn Kuwait into a financial center. This paper will help explore how banking support works in Kuwait.
The Context for Business in Kuwait
Another work that can be used for the study is the article by Vladimir Dzenolyats et al., “The Context for Business in Kuwait.” This research focuses on numerous critical areas of Kuwait’s business environment. First, it provides a historical, political, and economic overview of Kuwait since its inception. Second, the features of Kuwait’s framework conditions for doing business are studied, and Kuwait’s ranking in terms of ease of doing business, which details the ecosystem’s criteria, is maintained (Dzenopoljac et al., 2022).
In addition, the writers present a quick outline of the future and some views and recommendations. The per capita GDP of Kuwait is high and comparable with the indicators of economically developed countries. However, the scale of the national economy is much smaller, and its structure needs to be more diversified.
For today’s Kuwait, the task of realization of structural reorganization of the economy is urgent, the necessity of which is emphasized practically by all experts. However, to initiate such an all-encompassing phenomenon, severe and weighty impulses, generated not only by reasons of expediency but also by powerful financial nourishment, are needed (Alkhaldi, 2020).
However, in a country where investment deficit is gradually becoming a chronic phenomenon, and the investment process periodically needs to gain momentum, it is tough to mobilize the potential for fundamental structural adjustment (Rafiki et al., 2019). The decline in investment negatively affects the implementation of even pretty modest projects, not to mention macroeconomic goals, the achievement of which requires stable and multi-year funding.
The challenging situation in Kuwait, caused by the depletion of accumulation sources, necessitates implementing precisely calibrated measures to ensure a beneficial outcome for society. Nonetheless, the current five-year plan is built on long-standing practices. It suggests choices of action that are in keeping with the spirit of Kuwaiti business, minimizing indiscretion and danger while diverting attention away from the drama of the issue.
Generally, Kuwait’s economy has a substantial margin of safety and flexibility (Nourelfath et al., 2022). However, the country must remember the need to change its development tactics and strategy, new methods, and ways of working in the global economic space. It must respond more accurately to the dynamics of the global economy, make more efficient use of available growth factors, and save public resources.
ICT, Social Media, and COVID-19 in Kuwait
Yasir Saleh’s article “ICT, Social Media, and COVID-19: Data from the Informal Home Business Community in El-Kuwait” may also be helpful. This study aims to teach readers about the significance of information and communication technologies (ICTs) and social networks in the growth of Kuwait’s informal home business community (HBBs). According to the poll results, respondents connect with clients and work with business partners using Instagram, WhatsApp, Snapchat, email, and websites. Banking apps like Edfali are used to make commercial payments.
Passion and affection for the business, independence, an additional source of income, success in the family business, a pastime, or a lack of good jobs at other firms are common motivators for homeowners. Thus, this article will help explore which platforms are used to manage a business, which will help understand the specifics of this activity.
Research Method
Data Collection Method
I will use interviews as a data collection method for this study. The interview collects social information based on verbal socio-psychological interaction between the respondent and the interviewer to obtain the data that the researcher is interested in (Döringer, 2021). Compared with the questionnaire interview has its advantages and disadvantages. The main difference between these two methods lies in the form of contact between the researcher and the interviewee.
In the case of interviews, the interviewer makes contact between them, communicates directly with the respondent, asks questions, directs and organizes the conversation, and records the answers received as instructed. However, the interviewer must spend much more resources and time to obtain the same information as in a questionnaire. Additional costs will be required to train interviewers, including selecting and training them and monitoring the quality of their work.
Nevertheless, interviewing provides more opportunities to improve the reliability of the data collected because of the decrease in non-responses and errors in completing the questionnaires. At the same time, the content and depth of the information obtained often increase because if the respondent does not understand the question’s meaning, the interviewer can always help. However, in this case, the interview method will be the most appropriate, as interviewing Kuwaiti entrepreneurs and people directly involved in business management will help get more information.
Qualitative Research Method
I will also use a qualitative research method instead of a quantitative one. Qualitative research is a method to obtain in-depth and detailed information about the subject of study. The main difference between qualitative and quantitative methods is that data are collected from a relatively small group of respondents and are not analyzed using statistical methods. Qualitative research is defined as any form of information gathering designed to describe, but not predict, as in the case of quantitative research (Lobe et al., 2020). It is the method appropriate for a business management issue because it will help evaluate all perspectives and existing data from a qualitative perspective.
Research Ethics
Ethical issues to explore may be precisely how business should be conducted in Kuwait. Another essential and integral part of the research question is what structure should be chosen when starting a business in this country. In Kuwait, legislation defines all business processes, so it is necessary to study and follow it in detail. Studying the legal requirements for starting a business in this country is also worth exploring.
References
Abdullah, N. M. (2021). Family entrepreneurship and banking support in Kuwait: Conventional vs Islamic banks. Journal of Family Business Management, 11(3), 313-331.
Adžić, S., & Almutairi, S. (2021). Paternalistic leadership in Kuwaiti business environment: Culturally endorsed, but largely ineffective. Industrija, 49(1), 43-65. Web.
Alkhaldi, H. N. (2020). Legal Challenges of E-commerce in Kuwait during the COVID-19 Pandemic. Kilaw Journal, 8(6), 125-144.
Al-Merri, H. S. (2020). The impact of business intelligence on strategic performance in commercial banks operating in the sate of Kuwait. International Business Research, 13(8), 91-99.
Al-Nassar, W. K., Neelamani, S., Al-Salem, K. A., & Al-Dashti, H. A. (2019). Feasibility of offshore wind energy as an alternative source for the state of Kuwait. Energy, 169, 783-796. Web.
Al-Reesh, M. S. (2022). The role of customer inspiration and relationship quality in engaging the online experience: insights from Kuwait and Portugal.
Al-Shamali, A., Irani, Z., Haffar, M., Al-Shamali, S., & Al-Shamali, F. (2021). The influence of Islamic work ethic on employees’ responses to change in Kuwaiti Islamic banks. International Business Review, 30(5). Web.
Alzougool, B., AlMansour, J., & AlAjmi, M. (2021). Women leadership styles in the public sector in Kuwait: The perspective of their subordinates. Management Science Letters, 11(2), 465-472. Web.
Arman, H., Iammarino, S., Ibarra-Olivo, J. E., & Lee, N. (2022). Systems of innovation, diversification, and the R&D trap: A case study of Kuwait. Science and Public Policy, 49(2), 179-190. Web.
Ben Hassen, T. (2022). The GCC economies in the wake of COVID-19: Toward post-oil sustainable knowledge-based economies?. Sustainability, 14(18), 11251. Web.
Dana, L. P., Palalic, R., & Ramadani, V. (Eds.). (2021). Entrepreneurship in the Gulf cooperation council region: Evolution and future perspectives. World Scientific.
Döringer, S. (2021). ‘The problem-centred expert interview’. Combining qualitative interviewing approaches for investigating implicit expert knowledge. International Journal of Social Research Methodology, 24(3), 265-278. Web.
Dzenopoljac, V., Gërguri-Rashiti, S., Ramadani, V., & Dana, L. P. (2022). The Context for Business in Kuwait. In Understanding Contexts of Business in Western Asia: Land of Bazaars and High-Tech Booms (pp. 259-275). Web.
Hussaini, A. (2019). Organizational management through strategic planning and financial practices: An empirical assessment from business firms of Kuwait. Management Science Letters, 9(5), 713-726. Web.
Lobe, B., Morgan, D., & Hoffman, K. A. (2020). Qualitative data collection in an era of social distancing. International journal of qualitative methods, 19.
Nourelfath, M., Lababidi, H. M., & Aldowaisan, T. (2022). Socio-economic impacts of strategic oil and gas megaprojects: A case study in Kuwait. International Journal of Production Economics, 246. Web.
Rafiki, A., Hidayat, S. E., & Al Abdul Razzaq, D. (2019). CRM and organizational performance: A survey on telecommunication companies in Kuwait. International Journal of Organizational Analysis, 27(1), 187-205.
Sazmand, B., & Ramezani, A. (2021). The importance and challenges of the Persian gulf for China’s belt and road initiative (BRI). Journal of Iran and Central Eurasia Studies, 4(1), 75-108.
Wilson, R. (2021). Western, Soviet and Egyptian influences on Iraq’s development planning. In Iraq (pp. 219-240). Routledge.
Zainal, M. (2022). Innovation orientation and performance of Kuwaiti family businesses: evidence from the initial period of COVID-19 pandemic. Journal of Family Business Management, 12(2), 251-265.