Page 315 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Bringing It Home: Fostering GCC Awareness in the Head Office 297

Under a “Direct Reporting” model, the head of the GCC busi-
ness reports directly to the global head office, typically to the CEO.
This model is uncommon within large multinational firms, for good
reason. Usually the Gulf’s revenues and strategic importance, even
if significant, are too small to warrant so much of the chief execu-
tive’s attention. The model does, however, have benefits for firms
for which the Gulf is a major contributor and an important growth
driver. Halliburton is one such firm, and having its head office in
Dubai facilitates significant senior attention to the region. The
German engineering and industrial giant Siemens, for which the
Gulf is an important market, has a direct reporting line from Saudi
17
Arabia to the head office. The US Department of Defense, a non-
corporate entity for which the Gulf and broader region are an
utmost strategic priority, has a direct reporting line from the Gulf-
focused US Central Command to the secretary of defense. 18
A direct line to the chief executive can help greatly in assuring
that the Gulf has access to resources and has its pressing decisions
made quickly. Also, having the head of the Gulf region serve on the
company’s executive committee assures that global issues brought
to the group benefit from a GCC-sensitive perspective. With a pres-
ence at senior gatherings, Gulf executives are able to introduce
ideas with global consequences such as looking to the GCC as a
source of capital, a channel for diversifying the company’s share-
holder base, or a distribution hub between Europe and Asia. As
most global firms’ Gulf revenues do not yet justify a direct report-
ing line, such suggestions today need to work their way up through
other channels.
The “GCC via MENA” model is more common. In this model,
the GCC business reports to a head of the Middle East and North
Africa region, who in turn reports to the head office. Such a struc-
ture is a natural fit for many organizations, as the MENA region
shares certain characteristics and has scale—certainly from a con-
sumer perspective—to justify a direct reporting line to the head
office. Having the Gulf business report closer to home can also help
minimize turnaround time on key decisions, although the head of
MENA may need to refer some issues up to the head office in any
case. The challenge in such a structure is to ensure that the Gulf is
not lost in the broader Middle East cluster, which may spend much
of its time concerned about non-GCC issues such as political risk in