Issues that global companies will encounter in The State of Qatar

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We did find several issues during the country analysis from the Qatar. However, we wanted to chose two major issues that international business will face when people from different countries are doing business in Qatar. One of the major issues is Human rights discriminations and serious offenses which take place every part of Qatar, especially if you are not Muslim. Human rights can be related to how women are seen through work, to racisms and Qatari laws. How the law are responding to human rights. Do you even have human rights in reality?

Second issue that we chose is corruption. Transparency International has released their 2009 index of perceived corruption around the world. Qatar has made a lot of improvement its place in corruption ranking. The index shows how bad was the corruption in 2004. Qatar was ranked 38 most corrupted country in the world. Now the index shows that Qatar has made the largest improvement jumping up some 17 places, to place 22 out of 133 countries. Still we do not know how much corruption international business have to face in reality.

In this chapter we are going to deeper in these two issues. We try to look human rights discrimination and corruption from the perspective of international business and later on in the last chapter we will suggest different strategies how international companies should deal whit these kinds of issues.

Social issues

Human rights

Qatar is a destination country for men and women from South and Southeast Asia who migrate willingly. Unfortunately those workers are facing problems such as subsequently trafficked into involuntary servitude as domestic workers and laborers and commercial sexual exploitation. The most common offence was forcing workers to accept worse contract terms than they were recruited in the first place. Other conditions include bonded labor, withholding of pay, restrictions on movement, arbitrary detention, and physical, mental, and sexual abuse.

According to the Trafficking in Persons Report by the US State Department, men and women who are lured into Qatar by promises of high wages are often forced into underpaid labor. The report states that Qatari laws against forced labour are rarely enforced and that labour laws often result in the detention of victims in deportation centres, pending the completion of legal proceedings. (Human development reports 2009)

When citizens' rights are violated by state authorities, citizens have a little recourse save what influence they can exert through their extended families and patronage networks. Citizens do have access to independent legal counsel: however, the judiciary is not entirely independent nor does it always act to ensure the rule of law. Citizens are rarely the target of abuse by private or non-state actors; noncizitens are, however, and lack effective state protection. (Countries at the crossroads 2009)

Women right

The issue of women right is always being an emphasize issue in Qatar as its discrimination. Women in general are not considered to be as important as men in Qatar. A woman should obey to the men in her family because a man's judgment is superior to a woman from Islam point of view.

Besides that, female workforce participation rates in Qatar remain low and women remain concentrated in traditional sector, notably education and medicine. However, the barriers to employment are more informal than formal: Qatari women who choose to work gets in a range of professional position. (Countries at the crossroads 2009)

Working women in Qatar are required to dress modestly, cover their hair and wear long sleeves dress. However, a foreigner woman is excluded to follow this dressing style but somehow no short dress is allowed in order to show respect. Foreigner women need to register themselves as a working woman at the Labor department after the employer has sent a letter to the Ministry of Civil Service and Housing Affairs and requesting the permission to employ the worker. Once it approve by the Ministry, she need to go to the Labor Department with a copy of employment contract, a letter from the family sponsor which giving permission to work, original academic professional qualifications, and also photocopies of the academic professional qualifications, two photographs, original passports and ID, and also photocopies of the worker and her family sponsor. Foreign nationals form a significant proportion of the workforce in Qatar. However, a large percentage of foreign women workers working in Qatar are in insecure as they face various form of discrimination. They get low-paid domestic work and their rights to accord to citizens have been denied. They are facing discrimination as workers and as women in Qatar.

Spouses and others being in Qatar on personal sponsorship have to pay an annual fee to obtain a license work from the Department of Labor started from January 1st 2008.There is no protection and rights afforded to foreign women who working in Qatar under Qatar law. So many sponsors and companies ignore the red tape and contract, and choose to employ women on an informal basis. They reach the agreement by word of mouth.


Racism existed in Qatar, especially workforce who comes from India, Pakistan, Sri Lanka, Bangladesh and Nepal face that kind of problems whit Qatar people. Most of the time racism is emotional abuse but it can be also physical violence for example sexual abuse. People from US or Europe do not normally face racism in Qatar. (Qatar 2009)

Strategy for Social Issues

Social Responsibility

International Business has been at the center of debate regarding corporate social responsibility, particularly the benefits versus harm wrought by their operations around the world, especially in less developed countries (Helen Deresky, 2008). Issue of social responsibility continues to put hard in solving poverty and lack of equal opportunity around the world (Helen Deresky, 2008).

International Business' effort includes ban on forced labor, abuse, and discrimination, and it requires companies to provide a healthy and safe environment and to pay at least the prevailing local minimum wage (Helen Deresky, 2008). Apart from that, international business will be asking to support the protection of universal human right and not complicit in human rights abuses (Helen Deresky, 2008). They need to ensure human rights practices not only in the workplace, but also condemn violations in the wider community.

Besides that, it will create an environment which increased dialogue between workers and managers, and lead to more efficient and effective problem solving (Helen Deresky, 2008). It also condemns discriminatory practices, as they restrict the pool of workers available to a corporation and generally promote social fractionalization (Helen Deresky, 2008).

Codes of Conduct

A considerable number of organizations have developed their own codes of conduct based on international standard, even some have gone further to group together with others around the world to establish standard to improve the quality of life for workers around the worlds (Helen Deresky, 2008). To solve the human right issues in Qatar, International Business should follow the international code of conduct.

The proposed global standards would be monitored by outside organization to certify whether the plants or the conducts of organization are meeting those standards such as do not use child or forced labor, provide a safe working environment, respect workers' rights to unionize, do not regularly require more than 48 hour work weeks and must pay wages sufficient to meet workers' basic needs (Helen Deresky, 2008).

Furthermore, international business should consult with Qatar' governmental authorities and national employers' and workers' organization to ensure their company practices conform to human right practices in Qatar.

Practice Business Ethic Theory

In current situation, even how International Business tries their best to solve the human right problem. It still has minority workers unsatisfied and unwilling to follow rules and regulation. It is because every country has own culture and custom. Thus, International Business tries to minimize the human right problem to the lower level, but not to eliminate the human right problem. The most common way that the International Business minimizes the human problem is practice business ethic theory and the utilitarianism is the most popular and favorable (, nd).

Utilitarianism is the idea that the moral worth of an action is determined solely by its usefulness in maximizing utility or minimizing negative utility (utility can be defined as pleasure, preference satisfaction, knowledge or other things) as summed among all sentient beings (, nd). It is thus a form of consequentialism, meaning that the moral worth of an action is determined by its outcome (, nd). Besides that, it also can explain by the greatest happiness or greatest felicity principle (, nd). Utility has been defined by various thinkers as happiness or pleasure, although preference utilitarians define it as the satisfaction of preferences (, nd). It may be described as a life stance, with happiness or pleasure being of ultimate importance (, nd) .

Thus, in order to maximize the greater happiness in Qatar, international companies can apply utilitarianism practices as their strategy. For example, since the Qatar culture is discriminating women worker, internal national business should avoid sending the women staff to Qatar managing the business. This will definitely minimize the happiness and minimize the human right problem.

Economical issues


Corruption, especially at the highest levels, remains a problem, as does the very high degree of government in volment in the economy, especially the energy sector. However, in recent years the emir has stream line decision making, eliminating much of the overlapping authority among policy makers at the highest level, especially in the energy sector, as part of a broader effort to encourage foreign investment. (Countries at the crossroads 2009)

The record on corruption and transparency in Qatar is mixed. Petty cor­ruption is not widespread. State employees are well paid; moreover, many state employees are expatriates reluctant to risk job loss and deportation for improper financial gains. The government is generally free from excessive bureaucratic regulation, registration requirements, and other controls that would increase opportunities for corruption. However, the government is equally free from bureaucratic regulations and requirements that might prevent corruption. Recent reforms streamlining bureaucracy and reducing overlapping authority have improved the situation. According to Transparency International, Qatar has made a lot of improvement its place in corruption ranking. The index shows that Qatar has made the largest improvement jumping up some 17 places, to place 22 out of 133 countries. (Transparency International 2009)

While petty corruption is uncommon in Qatar, corruption at the very top appears run wild. When the former emir was deposed in 1995, he refused to return some $3-$8 billion in state funds invested abroad, arguing that these were his personal assets. The dispute was settled out of court with most of the money eventually returned. The new constitution does not clarify matters in this regard: Article 17 stipulates that "the financial remu­neration of the Emir, as well as the gifts and assistance, shall be defined as per a decision to be taken by the Emir annually." Access to the Qatari market, or at least to the greatest contacts, typically depends on develop­ing the right connections and contacts with powerful middleman, who are generally influential members of the ruling family. These individuals then collect hefty commission for making the necessary introductions. (Countries at the crossroads 2009)

At the top there are virtually no financial disclosure procedures or other protections that could prevent conflicts of interest, and the state does not enforce the separation of public office from the personal interests of public officeholders, at least among officeholders who are also powerful members of the ruling family. Article 128 of the constitution stipulates that ministers "shall not use or exploit their official posts in any way for their own interests or for the interests of those with whom they have special relations." None­theless, similar language in the past did not prevent corruption. Criminal investigations, for example, were opened in England against Qatar's foreign minister, Sheikh Hamad bin Jassim, on suspicion that he took extraordi­narily large kickbacks in violation of Britain's money-laundering laws. The case was later settled out of court. (Countries at the crossroads 2009)

There is no effective process to promote integrity and to prevent, detect, and punish the corruption of public officials. Asset declarations of public officials are not open to public and media surveillance or verification. Since the government does not rely on taxes for revenue, but rather on the direct sale of oil and gas, there are no effective internal inspection systems to ensure the accountability of revenue collection. No independent auditing body exists outside the executive. (Countries at the crossroads 2009)

The emir is apparently unwilling and/or unable to rein in the powerful sheikhs. Many ministries are in effect fiefdoms of the sheikhs who run them, their ministers constrained neither by law nor by the emir.4 Allega­tions of corruption do not receive extensive airing in the news media, and there are no effective and independent auditing bodies to investigate such matters. The state has no adequate mechanisms in place for victims of cor­ruption to pursue their rights. (Countries at the crossroads 2009)

On the other hand, the state protects higher education from pervasive corruption and graft. Bribes are not necessary to gain admission or good grades. However, many faculty members are expatriates and, fearing job loss and deportation, are in practice often reluctant to give poor grades to Qatari nationals, especially those from powerful families. (Countries at the crossroads 2009)

Since taking power in 1995, the emir has made some moves in the direc­tion of economic liberalization in an effort to encourage foreign investment. Some privatization has occurred, such as the partial sell-off of various tele­communications, power, and water utilities. In addition, whereas foreign investors were once required to have local partners, they are now allowed 100 percent ownership in some projects. However, the economy remains overwhelmingly dependent on oil and natural gas, and these resources are owned by the state. (Countries at the crossroads 2009)

Strategy for corruption

Personal Morality and Corporate Ethics

It is claimed that only applicants with strong norms of personal morality will resist corrupt demands. But sometimes, personal morals are insufficient when challenged by environment influences, especially when facing direct conflicts between profit and principle. Moreover, some personal traits that are admired in private life work against the achievement of organizational goals, including the control of corruption. (Greenberger, Miceli, and Cohen, 1987)

Experimental work proposes that many employees have strong norms of moral behavior but do not apply these norms to their behavior. The search for firm profitability takes priority over their moral ethics. One of the pioneer studies in business ethics asked managers what they would do when face with ethical dilemma. to ethical issues. 58 percent of managers interviewed would bribe a foreign official in exchange for a business contract as doing so would further company interests. This studies shows that ethics took second place to the fulfillment of company goals. (CMI, 2007)

Moreover, managers are frequently influenced by personal values. A survey found that personal values and standards were the most important guidance when participants faced ethical dilemmas (Cooper and Frank, 1992). Another study found that managers with different values will predict differences in behavior. Based on survey responses, participants were classified as having "ethical" or "economic" values. The authors found that those who were "ethical" behaved ethically in morally ambiguous situations presented to them, while those identified as having primarily economic values based their decisions according to the impact on the bottom line (Barnett and Karson,1987).

Behavior is often situation specific. Thus moral behavior is less likely if it imposes direct costs on the manager (Hoffman et al. 1998). Jones concluded that "Human beings may respond differentially to moral issues in such a way that is systematically related to characteristics of other issue itself". Jones further termed this ethical difference "moral intensity" and theorized that moral intensity has "a significant effect on ethical decision making", such as corruption. (Jones, 1991)

Besides that, hiring "moral" people is not sufficient enough. If the owners and top managers believe that their organization should not engage in unethical or illegal actions, they must make their position clear rather than rely on their employees' moral ethics. Some lower-level managers, faced with a conflict between profitability and morality, will choose for profitability unless given strong signals to the contrary by owners and top managers. Others will follow personal affective ties at the expense of profitability and business ethics. (CMI, 2007)

As a result, leaders (owners and top managers) play a very important role here by thinking of themselves as role models to their subordinates (lower-level managers or employees). Employees' actions aren't based solely on personal values alone. They're influenced by other members of the organization, from top managers and supervisors to coworkers and subordinates. Employees look to their leader to communicate policies and practices regarding ethical behavior. "Actions speak more loudly than words", if leaders behave ethically, subordinates will probably follow them. (Web-books, ND)

Leader should keep in constant touch with subordinates about ethical policies and expectations. They should always help their employees to identify and solve ethical problems, and try to convince them that peer reporting is part of their job. (Web-books, ND) For example, one study found that business students were more likely to report the cheating of their friends after they were told that such action was their responsibility as members of an educational institution (Trevino and Victor, 1992).

From the discussion above, it reflects the importance of corporate ethics to a multinational firm. A firm should know about what is corporate ethics and the way business ethics people handle conflicts between personal morality and their jobs. Corporate ethics is the set of rules and policies implemented by corporations, mostly to regulate the conduct of their employees. It is one of the best strategy that can be used to solve the problems that involving illegal actions, especially corruption issue. Some believe compliance with the law should be taken as a basis and that codes of ethics provide for an more demanding criteria. whether in their relation with other members of the firm or with clients and suppliers. (U4, ND)

Generally, there are three elements in corporate ethics. First element is prepare a code of ethics. Although codes of ethics are known for many years ago, only in the recent decades they have been adopted as part of corporate activity. There are many different provision in codes of ethics, which includes rules referred to conflicts of interest, use of corporate property, confidentiality of information and restrictions on the use of information that is considered to be sensitive for investment purposes and limitations on gifts giving and receiving, to mention the most common ones. (U4, ND)

The second element is develop strategies to promote codes of ethics by using some techniques, such as training and educational programs. Some of the firms can reach beyond its limits to show other firms, as well as their key suppliers how such rules apply. (U4, ND)

The third element is develop a system in order to ensure compliance. This can include different strategies to report illegal cases to panels of peers to revise cases and solve it. (U4, ND)


Beside the corporate ethics, whistle-blowing regulations is another strategy that used to solve this corruption problem. Recent international professional research shows that whistleblowing, in addition to other instruments, such as people management and internal and external controls, is an efficient fraud detection of fraudulent behavior (eg. corruption) tool in a firm. A study performed by an international accounting firm reveals that not less than 25 % of the occurrences of fraud discovered in the enterprises surveyed came to light thanks to a whistleblowing system put into place by the companies. (International Chamber of Commerce, ND)

Another example of the case which involves a large, publicly traded health benefits company in the United States also has proved that whistle-blower reporting mechanisms remain one of the most effective means of fighting corruption and detecting fraud in organizations. The case story described how the use of a whistle-blower helpline in working against corruption within an organization that pool of examples.(Jose A. T. & Chris M., ND)

However, what is whistleblowing? Whistleblowing is a process that is voluntarily implemented by an organization and which allows employees to expose wrongdoing, fraud, corruption or waste that may seriously result in a breach of the law or of the company's internal regulations or serious harm to company activities by engaging its civil and criminal responsibility.( Iccwbo, 2010)

Under an established whistleblowing policy, the employee should feel comfortable reporting concerns without fear of reputation. A company will need to protect them from harassment such as termination of their job or other discriminate against them. This in return allows the company to appropriately deal with such concerns before an illegal act has been committed rather than after the damage has already been done.( Iccwbo, 2010)

Any delayed reporting may seriously affect the company by harming its reputation and make it face a risk of prosecution. Therefore, whistleblowing is very important to control the corruption issue.( Iccwbo, 2010)

Political issues


Qatar has an emirate-type government. Its legal system combines Islamic and civil law codes in a discretionary system of law controlled by the Arab Emirates. Although civil codes are being implemented, Islamic law dominates family and personal matters. Shari'a or Islamic law is applied to aspects of family law, inheritance and certain criminal acts. The country has not accepted compulsory International Court of Justice jurisdiction. (U.S. Department of state 2010)

In practice the judiciary does exhibit a degree of independency, although justice can sometimes be slow and the judiciary harsh. However, there are no real protection to ensure that state funding for the judiciary in not used as an instrument of control and political pressure. (Countries at the crossroads 2009)

Also there are people who are above the law. For example member of the ruling family, especially those who are the closets one to the emir, often stands above the law. They are not prosecuted for abuse of power or for anything else.

Strategy for Political Issues

Political risk insurance

Political risk insurance is a type of insurance that can be taken out by businesses, of any size, against political risk. This insurance is available for several different types of political risk, including expropriation of assets (Export Finance & Insurance Corporation, nd). This means for investors in Qatar, it protects against confiscation, expropriation, nationalization, and Qatar's government actions which would deprive their business rights of ownership or control of assets (Export Finance & Insurance Corporation, nd). It also avoids forced abandonment, selective discrimination, business interruption by government in Qatar (Export Finance & Insurance Corporation, nd).

Besides that, political risk insurance also protects against non-payment or arbitrary non-honoring contract, either before or after international business shipment of goods or performance of services (Export Finance & Insurance Corporation, nd). It is to prevents against non-honoring of sovereign government payment guarantees (Export Finance & Insurance Corporation, nd).

Joint Ventures

Joint venture is common business practice, which is partners other company to have long tern business relationship and share capabilities and resources, such as distribution channels, technology, or finance (Helen Deresky, 2008). Joint venture is important for risk transfer (Helen Deresky, 2008). By joint ventures with Qatar residents especially those in labor union or government will directly reduce political risk. Apart from that, join third parties as business partners will also reduce political risk. Involved partners from different countries, Qatar's governments may be reluctant to interfere into business because it offended many governments in others country (Helen Deresky, 2008).


Every country and region has its own cultural identity, use of local staff and enhance local employees can be better management of the company to respect the local customs and practices, integrate into the local social life (Helen Deresky, 2008). It involves modification of the business's name in Qatar, changing management style to suit the local taste (Helen Deresky, 2008). It seem like transform the business from a foreign firm to a national firm to avoid interference by the local government (Helen Deresky, 2008) .

Using the services of consultants can be considered by international business to achieve localization. They can hire experts or consultants familiar with the country or region which usually monitor important trends to predict political change, political environment and conditions (Helen Deresky, 2008). Most of the information will be assess by monitoring the local media, contact other business who have had recent experience in the host country conduct on site visit and so on (Helen Deresky, 2008). International business can base on the evaluation result to minimize the risk before taking any action.

Besides that, localization can be achieved by development of internal staff and in-house capabilities (Helen Deresky, 2008). This includes send the staff to Qatar to monitor political activities and the staff will get experience from it and improve from the mistake.


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