International business is very well developed in Germany, this country trades with many states all around the world. Germany is one of the most powerful and influential traders in Europe. It manufactures and exports a wide range of various goods. At the same time, Kuwait is known to have strong trading relationships with countries of Asia. Kuwait mainly exports oil and petrol products. International business is promoted in the country by means of various international business institutions.
Political systems of Kuwait and Germany are very different. Kuwait is a Unitary Parliamentary Constitutional Monarchy, while Germany is a Democratic Republic. These differences affect the world of trades in relation to the way global trading negotiations are done. The kinds of leadership employed by both of these countries differ according to the political systems in them. Kuwaiti business leadership is unitary and German companies work in agreement with the beliefs of democracy.
Economical relations between Germany and Kuwait are quite stable and untroubled. Among all the members of the Gulf Cooperation Council Kuwait confidently occupies the position of the fourth most significant market for the goods from Germany. As a result, Germany can be referred to as the main trading partner for Kuwait among all the members of the European Union.
Legal systems have a lot of weaknesses in Kuwait. Corruption remains one of the biggest legal issues for this country (Kuwait, par. 5). Even though the government of Kuwait has started taking measures to address this problem, it still creates various inconveniences for the trading and international profile for the country. At the same time Germany is much more successful at this area, this country has managed to achieve a lot of success in its battle with corruption.
Property rights index for Kuwait is 50.0, which is not very high. This means that the rights for owning property are not very well protected, so the property can be expropriated for various reasons. At the same time, in Germany legal laws and policies create full protection for the properties owned by foreigners on the territory of the country.
One of the most important aspects of corporate governance is transparency. Some of the biggest companies of Kuwait readily publish their annual reports, but many still lack transparency of the business. Kuwaiti business makers are starting to realise that having good corporate governance increases the company’s chances to attract investors. German businesses have very high corporate governance standards, to operate in Germany a Kuwaiti company would have to obtain these standards.
Kuwait’s culture is very different from the one of Germany. Of course, cultural inconveniences may occur if a Kuwaiti business starts to operate in Germany. At the same time, Germany is quite multicultural. It has various laws and policies protecting foreigners and foreign cultures, this is why a foreign company and its employees would be treated with respect in this country.
Languages spoken in Germany and Kuwait are also very different. Language barrier may create a significant obstacle for the co-operation of the employees and managers of German and Kuwaiti origin. The collaboration of the workers coming from these two countries would have to include communication by means of the use of a third language, which is very likely to be English as a common international language.
The most common religion in Kuwait is Islam, and Germany, just like the majority of other central European counties, is shared by Catholics and Protestants. In the Islamic world religion plays a very important role in all aspects of the society, while in the West religion is viewed as a separate notion. Germany welcomes many Muslim people, it can adjust very well. At the same time, adjustments can be a challenge for people of Kuwait.
Business negotiations and their success depends a lot of the ethics used during the meeting. This is why every time an international business deal is set, the negotiating sides learn a lot of facts about each other’s cultures, manners and typical behaviors. Since the cultures of Germany and Kuwait are very different, business cooperation of these two nations will depend a lot on the way the managers adjust to the foreign ways of living. German culture is more individualistic, while Kuwait is a state with collectivist mentality (Dimensions, par. 2).
International business promotion is very high in both Germany and Kuwait. These countries train qualified and capable professionals for working globally. Both of the countries are rich in human resources. As for the natural resources, Kuwait manages seven per cent of the world’s oil supply, and Germany is a prominent manufacturer of automobiles and machinery.
Kuwait is known for its compatibility on the business arena. Companies of Kuwait work through the promotion of rarity in order to create benefits for their business and organise better performance for the employees. Rarity stands for deeper devotion of the workers that is maintained. German companies use VRIO often to explore their opportunities for the further development. German businesses are known for excellent organisation and careful management of the situations with cost disadvantage.
Benchmarking is responsible for the constant improvement of the companies. In Germany the application level of benchmarking is higher than in Kuwait, because the latter and its business companies are oriented and stability and maintenance.
Kuwait – Turkey
Turkey is a highly competitive country. It benefits from its well developed infrastructure and its large domestic market which is mainly promoted and improved by very strong inner competition (Schwab, 29).The country performs well in many international markets, while Kuwait mainly participates in oil trade.
According to its political system, Turkey is unitary parliamentary constitutional republic and Kuwait is unitary parliamentary constitutional monarchy. Being a part of Europe and developing under the impact and in constant cooperation with European countries Turkey had to reform its outer and inner policies so that its collaboration with Europe became easier.
Economically, Turkey has been developing quickly. This year it has reached the highest economic freedom score (Turkey, par. 3). Even though Kuwait’s economic freedom index is higher than the one of Turkey by two ranks, its improvement in negative. While Turkey is progressing and getting higher in its economic freedom, Kuwait is losing its points (Kuwait, par. 1).
Legal issues of Turkey and Kuwait are very similar. In the world of business, just like in the world of politics both countries struggle with corruption, nepotism and cronyism. The government on Turkey has been reacting to the problems related to corruption, but they did not succeed much. Judiciary system of Turkey is independent officially, but the decisions of the judges as well as their powers can be influenced by politicians.
Property rights index for both Turkey and Kuwait is the same and equals 50.0. This number represents the freedoms of property owners on the territory of the country. Turkey is aware of this problem, this is why property rights have been enforced there, but the progress is limited due to the slow development court cases and lack of professionalism among the court workers and judges.
It goes without saying that countries with corruption problems do not have good overall corporate governance. Individual companies try to pursue with goal and publish annual reports about their work, performance and revenues, but generally corporate governance is quite weak for both Turkey and Kuwait.
Even though Turkey and Kuwait are separated from each other by the bodies if several other country, they have quite similar cultures. Both of these countries are located at the seaside, and this has always been a significant part of their nations’ self-identity. The difference is that Turkey is very diverse, and Kuwait is rather homogenous. Interaction of these two cultures in the world of business would not struggle with too many differences.
Kuwait and Turkey have different native languages. The language spoken in Turkey is Turkish, while in Kuwait they speak Arabic. These languages are not similar; this is why international business communication would face a language barrier. In the contemporary world, international companies use English as means of communication between the managers and employees of various origins.
Kuwait and Turkey are both representatives of the Islamic world. The majority of the citizens of these countries are Muslim. In business cooperation between these two countries religious differences would not be an issue, as both countries share similar traditions and rituals, their religious celebrations and religious calendars also match. Besides, religious Islamic values play a significant role in the way Muslim people treat business, so in this aspect Turkey and Kuwait are likely to achieve agreement.
Islamic work ethic is quite important in Kuwait. Business in this country is conducted and regulated by means of the setoff beliefs and rules as to the appropriate behaviour at work and the proper attitudes. Turkey is also a part of Muslim world, but its treatment of Islamic strict rules is more liberal. This is why ethical behaviors of the workers of these two counties are similar, yet not complexly identical.
Turkey’s competitive nature and well developed infrastructure have made it a strong international trader. At the same time, the issues this country is facing currently are connected to the lack of qualified specialists. The country’s level of professional education is quite low; this is why it experiences problems with human resources. Kuwait faces similar issues, but they are caused by the fact that the country’s education system fails to employ more modern models of education.
The use of VRIO is wide in Turkey, the companies evaluate and analyse their businesses in order to create further development and promote their products. Kuwait recently started to employ analysis of this kind, yet it already creates benefits for the businesses there.
Benchmarking in Turkey is developed better than in Kuwait. Turkey is an active export partner of many countries. Through the application of benchmarking it keeps searching for more opportunities for the business development, this is why it makes such strong competitor. Kuwait is stable and organised, it is good at maintaining its business relations.
Works Cited
Dimensions. The Hofstede Centre. 2014. Web.
Kuwait. 2014 Index of Economic Freedom. 2014. Web.
Schwab, Klaus. “The Global Competitiveness Report 2013–2014”. World Economic Forum 2013: 1-551. Print.