Page 316 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

298 Dubai & Co.

Iraq and Lebanon or focused on the more populous markets of
North Africa. As already discussed, managing the Middle East col-
lectively is appropriate only if its various clusters (the Gulf, the
Levant, and North Africa) are not painted with the same broad
brush. As many firms place their MENA head office in Dubai, the
risk of overlooking the GCC becomes far smaller. Having senior
regional resources based in the Gulf gives them firsthand apprecia-
tion of the area’s opportunities and challenges. The MENA head
therefore becomes a natural advocate for the GCC business.
A third, and often problematic, structure frequently used by
global companies is to have the Gulf report into MENA and then
have MENA report into one of the megaclusters described above.
The head offices for these megaclusters tend to be in the largest
market within the group—EMEA structures, for example, tend to
be led from Europe. Within a megacluster there can be a tendency
to allocate resources and attention, especially during senior
management meetings, to the biggest revenue contributors. Ameet-
ing in which the overall Asia-Pacific, Middle East, and Africa region
is discussed will likely be dominated by reviews of the businesses
in Japan, China, India, and Korea. Despite its promise and
dynamism, the Gulf will have difficulty reaching the top of the
agenda. This dilution of focus can be a major hindrance to serious
investment in the GCC region.
Megacluster structures can, however, prove effective in con-
texts where decision-making rights are broadly distributed and
front-line resources are empowered. Procter & Gamble, Coca-Cola,
and Unilever, all of which rely on heavy consumer marketing and
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local insights, report through megacluster structures. Coca-Cola’s
success in a market, however, relies more on the effectiveness of its
local bottler and local marketing team than on support and invest-
ment from Atlanta. Similarly, Procter & Gamble and Unilever rely on
in-market distribution and marketing more than on product support
from headquarters. Other sectors, in which head office support is
more crucial, are less suitable for megacluster reporting models.
There is no single right answer to the question of what is the
best way for the GCC to report to the main office. The appropriate
model depends on a number of factors, including the GCC’s revenue
contribution and strategic importance, the degree to which decision
making is centralized at the head office, the Gulf business’s need for