Iraqi business culture: an expatriate's view.

Bradley, Don B., III ; Brown, Justin Eric ; Rubach, Michael J. 等

INTRODUCTION

The evidence is overwhelming that culture influences managerial decision making on any number of levels or dimensions (Hofstede, 1980). The importance of culture's implications for managers has led to a substantial increase in cross-cultural research (Yeganeh & Su, 2007). However, much of the cross-cultural research has focused on developed countries and emerging economies in Asia and Eastern Europe. Often ignored have been the countries of the Middle East (Yeganeh & Su, 2007). Even within the existing research on Middle Eastern and Islamic countries, Iraq has not been extensively studied. For example, the most recent comprehensive study of the effects of leadership and culture, the Global Leadership and Organizational Behavior Effectiveness (GLOBE) Research Project, did not study Iraq. This paper attempts to fill the void in the research and literature on the business culture of Iraq.

Through the removal of a dictator, war, and strife, the relationship between Iraq and the United States has been very contentious. Despite the conflicts, the U.S. government through the U.S. Agency for International Development (USAID) has supported the redevelopment of the Iraqi economy through the successful creation of the Tijara program. This program, together with its predecessor, the Izdihar program, has provided both financial capital and services to nascent Iraqi businesses. More than 132,000 microloans, worth a combined value of $300 million, have already been made (U.S. Federal News Service, 2009). These efforts along with the efforts of the Iraqi people and their government have created an Iraqi business culture that resembles the blossoming American business culture during the Industrial Revolution.

This paper will analyze the affects of imposing a very diverse Western business culture on the religious culture of Iraq. In an attempt to figure out where the Iraqi business culture is evolving, we must first dissect the fundamentals of the culture of the past, and the ingrained cultural beliefs of the inhabitants of the present. Once we understand the past, we can then evaluate a comparable market in an attempt to predict and make suggestions as to its future.

IRAQI CONTEXT

In an effort to fully understand some of the deeply held traditions and sentiments of a culture, we must understand their past. The land now known as Iraq has been called the Cradle of Civilization. The ancient Sumerians, Babylonians, and Assyrians all developed great empires in the region between the Tigris and Euphrates rivers. At later times, it was ruled by the Greeks, the Romans, the Persians, and the Ottoman Turks. Under the Abbasid rulers (750-1258), Baghdad became a center of learning for the entire Muslim world. However the Mongols invaded the region in 1258, leading to its decline. The Ottoman Turks, after a long struggle, won Baghdad and the Tigris and Euphrates Valley from Persia in 1638. The region remained a part of the vast Ottoman Empire until the end of World War I (Randall, 2006).

A discussion of the Iraqi political environment is provided in Appendix A.

Economic Environment

For the past three decades, the Iraqi economy has been adversely affected by costly militarization, three wars, and international sanctions (Gorrill, 2007). These events severely traumatized Iraq's population, damaged the country's political and economic institutions, and negated many of its previous economic and social gains. By 2004, Iraq's per capita GDP had fallen to less than US$800, and its crippling debt had stifled its growth and development (International Monetary Fund (IMF), 2009).

Iraq's natural resource base makes it potentially a rich country and provides the means to rebuild its economy. Production and export of petroleum, which provides 90% of the country's foreign exchange earnings, continues to set the country on the path to sustained economic growth and long-tem prosperity (CIA Factbook, 2009). However, the task of rebuilding the country following the Second Gulf war has been immense. Sectarian politics and prolonged violence have made this task even harder (IMF, 2009). Iraq's reconstruction has required not only the rebuilding of its infrastructure, but also its economic and social institutions. The challenge has been to create a business environment that will attract capital and foster the development of the new technologies and skills needed to modernize the economy (IMF, 2009). Foreign direct investment is beginning to bolster Iraq's industrial sector. The strategy of the Iraqi government is to increase foreign participation through the establishment of joint ventures with State-owned enterprises. Provincial Councils have promoted and facilitated investment at the local level. The Iraqi Central Bank has been successful in controlling inflation. The government's challenge is how to improve the plight of ordinary Iraqis. Reducing corruption and implementing structural reforms, including the development of the private sector, will be key to Iraq's future economic success (CIA Factbook, 2009).

Despite numerous wars and under-investment in its infrastructure, Iraq is beginning to recover and is on the road to a bright future. The potential of the Iraqi people and its abundant resources are now being unleashed to create a free market economy (Iraqcoalition.org, 2009). Iraq's 29 million people are now satisfying their long, pentup demand for modern goods and services. Recent increases in wages and the opening of international trade have caused an increase in consumption. The increase in recent inward foreign direct investment will likely result in up to a million new jobs, providing significant economic stimuli. This job growth in turn will accelerate further consumption. Strong, sustained growth into the future should be enhanced by the establishment of a new, single currency, the development of a transparent legal system, and the creation of an open business environment (Iraqcoalition.org, 2009).

The Iraqi coalition lists several business sectors that are the most attractive in the developing economic environment. These include: agriculture and agricultural equipment, branded food and beverages, construction and construction materials, consumer packaged goods, electricity, electronics and appliances, financial services and capital markets, franchising, healthcare, oil infrastructure, petrochemicals, retailing, telecommunications, and water treatment and resources (Iraqcoalition.org).

The outlook and examination of the business culture coming from the Iraqi government coalition is very different from what you would hear from normal Iraqi businessmen and women. Most of the businesses are worried about operating at full capacity because of the fighting and violence that Iraqis are faced within their daily lives. Muthana Idan Kabul is an Iraqi citizen who owns and operates a tea cafe in the Karkh area of Baghdad. He talked about, during the worst fighting in Iraq, insurgents who would steal his furniture and even set his shop on fire. This did not stop him from running his business. He received a $2,500 (US) loan from the United States government to improve his business. He has since opened a bigger shop and bought new tables and chairs for his business. Two other Iraqi businessmen opened a gas station south of Baghdad in the town of Tunis. They capitalized on the fact that it is the only gas station for several kilometers around the city. They only opened the business after the sectarian violence quelled in the area and they felt it was safe for them to open. They stated that they have so many customers come and fill their cars and containers with gasoline that they often run out due to a shortage of trucks delivering gas in the area. Their only fear is that the violence will pick back up once Iraqi forces take over control from the American forces, with the renewed violence likely driving them out of business (Block, 2008). Hamzi Abid Ali grows grapes in the town of Balad. He has grown grapes there for many years, starting during the times under Saddam Hussein. He stated that his income has more than quintupled since receiving a $2,400 (US) loan from the Al-Baydaa Centre, a US-backed microcredit organization. He was able to buy a new irrigation system and well pump that has allowed him to expand his business operations and help him speed up the repayment process of the loan (Fifield, 2009).

These stories are not uncommon, but are more the norm for modern day Iraq businesses. There is a recurring theme in almost all of these stories that are worth mentioning and delving into further. Most of the businesses were started with loans that were provided by the U.S. government or Iraq entities that offer U.S. backed loans. The Iraqi government helped create the Small Business Development Center (SBDC), which is equivalent to the American Small Business Administration. The SBDC's services range from offering micro-loans to help businesses develop to offering basic business training courses to help educate the Iraqi citizens about how to manage a business. They even offer assistance on helping individuals create business plans and help develop the business from the ground up in areas that vary from taxi drivers to new hospitals. In the frequently asked questions section of SBDC's website, SBDC was asked if there was an age limit on receiving assistance. The response was interesting, "We would expect that a person who wants to create a business or has an idea should be 15 years of age or older." This highlights one of the differences between American and Iraqi business cultures. The life expectancy rate is much lower in Iraq than America, so it is not uncommon to see younger citizens to try and make a living for their family in Iraq (Sbdc-iraq.com).

BUSINESS CULTURE IN IRAQ

Similar to other countries in the Middle East, Iraq is home to a rich and distinct variety of social groups, cultures and religions. Similarly, although the republic of Iraq is relatively young, the country boasts an exceptionally long and tumultuous history (Gorrill, 2007). Many of the world's greatest ancient civilizations developed in Iraq. Like many Arab countries, Iraqis embrace and honor the achievements of their past and maintain strong tribal cultures. Conducting business operations profitably in Iraq "can only be achieved through understanding this country's culture, history and individual approach to life." (Gorrill, 2007).

Cultural Dimensions

Due to small sample sizes obtained from the Arab countries, Hofstede (1980) grouped Egypt, Lebanon, Libya, Kuwait, Iraq, Saudi Arabia, and United Arab Emirates (UAE) together as representing "Arab countries." Along Hofstede's four cultural dimensions, the Arab group scored high in uncertainty avoidance, low in individualism, high in masculinity, and high in power distance. These scores differed from the United States on all dimensions but masculinity (Robertson, Al-Khatib, & Al-Habib, 2002). Further Arab values differ substantially from US values (see table 1). In their cross-cultural research of attitudes toward work, Ronen and Shenkar (1985) also grouped six Middle Eastern countries together in an Arab cluster. While Hofstede's (1980) and Ronen and Shenkar's (1985) results make substantial contributions to understanding Arab culture, the grouping of Middle Eastern countries into one homogenous entity is problematic to understanding the diversity of this region (Robertson, Al-Khatib, Al-Habib & Lanoue, 2001). Subsequent research has indicated that the grouping of Arab states into one cluster mat not be appropriate (Hickson & Pugh, 1995; Robertson, Al-Khatib, Al-Habib & Lanoue, 2001).

Variations in terms of religion, language, history, and tribal affiliations make Arab countries quite heterogeneous in terms of their cultures. As a country situated in the Middle East and being predominately Muslim, Iraq has many commonalities with neighboring Muslim countries. Yet due to its unique historical, linguistic, and racial identities it has developed a different and unique culture.

The family provides the basis for a "social network" (Hutchings & Weir, 2006). The family is the foundation of the social structure in Iraq. It creates a network that provides assistance in times of need or trouble. The family regulates its member's political, religious and economical activities and establishes all rights and obligations (Gorrill, 2007). Iraqis observe a sense of responsibility towards the extended family and conform to a norm of a mutually protective attitude toward family members. Loyalty to the family remains at the heart of Iraqi culture (see Table 1), and is preeminent to all other social relationships. With the predominance of family relationships, relatives tend to be preferred as business partners and employees. Employing people that one knows and trusts is of primary importance to Iraqis (Gorrill, 2007). In response to many years of fear, the family has been the one constant that Iraqis could turn to in times of need for security and stability in life. It is no surprise that many Iraqis go into business with their family members because those are the people they feel they can trust the most.

A society's level of tolerance for uncertainty and ambiguity determines the cultural differences with respect to the dimension of uncertainty avoidance (Hofstede, 1980). This cultural dimension is especially critical when conducting business in Iraq. The Iraqi culture's all-pervading and strict rules, laws, policies, and regulations are an effort to minimize or reduce ambiguity and to avoid the risk of the unexpected. Due to the presence of uncertainty avoidance, Iraqis make decisions gradually, do not easily or eagerly accept change, nor take undue risks (Gorrill, 2007).

This is in stark contrast to American business culture where the idea of change is ever present. It is not uncommon for an individual to have upwards of 7-10 jobs in their lifetime. The fluidity of employment does not always show a lack of loyalty to the employer but a chance for upward mobility. When analyzing the American business culture, WorldBusinessCulture.com made an interesting observation. They noted the relationship between an employer and employee is transactional in nature; meaning that there is a separation between the business and the personal aspects of employees. The employee is there to perform a specified task for the company and is then rewarded with a cash incentive (WorldBusinessCulture.com). This is opposite to the Iraqi culture where relationships trump formal agreements or transactions.

A fundamental aspect of Iraqi culture rests in the formation of an individual's identity. For Iraqis, there is a clear division between the public and private areas of their lives. This creates two distinct personas and modes of behavior. The two personas have been described as inner and outer circles of society that define behavior. The family or tribe is the inner circle that shapes a person's social and business network. The strict laws, policies and regulations embedded in Iraqi culture are the outer circle that offer accepted rules for public conduct. In a business environment, Iraqi business counterparts place a greater importance on establishing friendships and developing close relationships with those with whom they conduct business (Gorrill, 2007). It is well recognized that a key to working successfully in Arab countries is a knowledge and understanding of the interpersonal networks that pervade the business and social life of Arabs, especially Wasta (Hutchins & Weir, 2006). Wasta entails a network of interpersonal connections rooted in the family and kinship (see Table 2). Wasta is Arabic for "connections or pull" and is a significant factor in decision making in Arabic society (Hutchins & Weir, 2006: 278).

The collectivistic nature of Iraqi culture has also been attributed to the religion of the population. The country is overwhelmingly Muslim (CIA Factbook, 2009). The social and ethical obligations of Muslim are based on the belief that the Islamic community is a brotherhood. This notion of collectivity is stressed particularly in the Sunni doctrine. A recent study found that religion may also explain the high scores on power distance and uncertainty avoidance in many Arab countries (Taylor, 2003). The Muslim countries in the study corresponded to those used by Hofstede (1980) and included Egypt, Indonesia, Iran, Iraq, Kuwait, Lebanon, Libya, Malaysia, Saudi Arabia, Turkey, UAE, and Pakistan. The results suggested a high correlation between the Muslim religion and the dimensions of power distance and uncertainty avoidance. These two dimensions combined promote an environment in which leaders have ultimate power and authority (Taylor, 2003). Further, the system of laws, rules and regulations created by those in power only reinforce their own power and control (Pellegrini & Scandura, 2006). Collectivism may be determined by resource scarcity and the presence of the social networks created by large and extended families (Triandis, 1980). In contrast, individualism may have its roots in affluence and smaller families. Like many other collectivist societies, Iraq tends to operate on the basis of personal relationships among individuals, rather than on the basis of impersonal agreements or institutions (Yeganeh & Su, 2008).

The high degree of hierarchical distance is another feature of Iraqi culture. This dimension concerns the extent to which the less powerful members of a society expect and accept the unequal distribution of power (Yeganeh & Su, 2007).

This too contrasts with American business culture where there are a variety of leadership styles present. Professor D. Quinn Mills of the Harvard Business School lists the five most prevalent leadership styles. The first leadership style is directive leadership. This is the concept that direction in a company is given from the top-down, from the executive to the rank and file. The second leadership style is referred to as participative leadership. This leadership style is exemplified by executives complimenting their weaknesses with others in the group to come up with a collective decision and vision for the company. The third leadership style is empowering leadership. This leadership style focuses on energizing others within the company to accomplish the goals of the company. This style leads to more responsibility to the rank and file of the company in which they take the possession of the responsibility as a reflection of their success. The fourth leadership style is the charismatic leader. Often times we cannot describe or quantify what makes a person charismatic but we know it when we see it in someone. This type of person is often said as being a leader because they look like a leader. People follow this leader not because of his/her ideas or because of his/her leadership style but because of who he/she is. The last leadership style is referred to as celebrity leadership. This is characterized by someone who puts a positive and even celebrity view on the company from customers and investors. This often requires people with good looks, dramatic style, and ability to handle the media effectively. This style differs from charismatic leadership because people do not follow them because of some unknown characteristics but instead are viewed favorably from outside the company (Mills, 2005).

Iraqi culture tends to oriented to the past, which is similar to other Arab countries. An orientation towards the future is not followed. Iraq represents a very traditional country with a long history that makes a past-orientation quite plausible. Also, a majority of the Iraqi population is associated with Shia doctrine (CIA Factbook, 2009) in which the veneration of martyrs, pilgrimages, and commemoration of dead Imams implies a continuous look to the past (Yeganeh & Su, 2007).

Even with the liberation of the country from their dictator, Iraq is not without its problems and contentions. The Iraqis are a deeply religious people and hold to their beliefs throughout their personal and business life. The primary religion in Iraq is Muslim. The Muslim religion in Iraq is divided into two conflicting sub-sections, Sunni and Shia Muslims. This conflict has turned into very heated contention and sometimes downright war between the two factions. The creation of the two factions started with the death of the Islamic Prophet Muhammad. Sunni Muslims believed at that time that the leader of the Muslim faith should be elected among those that were qualified for the job. Shia Muslims believe that after the death of Muhammad, the successor should come straight from Muhammad's blood line or at the very least a Muslim Imam appointed directly by God. Ultimately the Sunni Muslim got their choice as the best qualified to be the leader of the Muslim faith. Shia Muslims because of this have refused to acknowledge the leader's role and choose to follow a group of Imams that were appointed by God himself (Amin, 2001).

Actual religious differences between the two groups are few and far between. Both groups believe in the Five Fundamental Pillars of Islam, each group recognizes the other group as part of the Muslim faith. Other differences and contentions between the two groups beyond the successor to Muhammad extend to the daily rituals and practices of each of the groups. The Muslim faith requires multiple prayers to be performed daily. Shia Muslims have a different call to prayer and most often combine several prayers to pray three times a day instead of the traditional five. Another contention on religious practices is over the idea of marriage or temporary marriage. Sunni Muslims do not agree with the use of temporary marriages throughout the Muslim belief. They believe that marriage is a permanent institution, whereas Shia Muslims allow the practice of temporary marriages.

In modern day Iraq, contention between the two factions is not over how many prayers are performed each day or over the idea of marriage, it is over the simple idea of inclusion. After the fall of Saddam Hussein, Shia Muslims, being in the majority, occupied a large part of the new provincial government. While in power the Shia did not allow for much Sunni participation in decision making in new and emerging Iraq. Because of this fact, Sunni Muslims took to violence to protest their point and power. With the assistance of Al-Qaida in Iraq, they performed attacks first on American troops but then turned their attention to religious Shia holy sites and shrines throughout Iraq. These attacks included bombings, arson, and the abduction and murdering of thousands of Shia citizens. In 2006, Sunni Muslims bombed the holy Askariya Shrine, a mosque that was considered an integral part of the Shia religion and beliefs. This was the catalyst for the bloody contention between the groups today. The bombing caused the Shia Muslims to fight back against the Sunni Muslims on the streets and retaliate for the bombings and murders (Shuster, 2007).

Islam differs from most other religions in that it is an all-encompassing creed. It tends to govern every aspect of life--public, private, political, and economic. The Middle Eastern or Muslim manager is guided not only by his conscience but also by God's written instructions. The manager is required to do the right things to and for people. Work-related values include "equality before God, individual responsibility, paternalism, fatalism mixed with personal choice, and consultation in decision-making. Respect for seniority, loyalty, and obedience are other widespread Islamic work-related values." (See Tables 1 and 3) (Yeganeh and Su, 2008: 209).

For the past several decades women have made inroads in corporate America. Women now hold important jobs in the business world, including CEOs, corporate boards, and senior level executives. A woman's place is no longer seen as a homemaker but as an equal in the modern day business. There are still minor pay disparities between men and women but those disparities are shrinking with every year. This is in sharp contrast to the role that the modern Iraqi woman plays in her culture. Under Saddam Hussein women were treated as a subservient section of the population that should be seen and not heard, and sometimes not seen at all. Even though the country is still embedded with its deep Islamic belief of the roles of men and women, women have made tremendous progress in the fight for civil rights in their country. Parwin Salih, head of the projects department for the Women's Union of Kurdistan, says: "The Internet has played a big role in progress for women here. Visit some of the centers, and you will see the majority are women. They try to get information about women from all over the world," and compare their own hopes and problems to those in other countries" (Begos, 2003). This is very emblematic of the situation American women of the early 20th century fighting for suffrage in a patriarchal society that didn't want them to have the right to vote. Women in Iraq now own businesses, are becoming doctors, lawyers, and respected members of the Iraqi government.

Gorrill (2007) lists a number of common business practices throughout the culture of post-Saddam Iraq. Many of these business practices are the same as the unspoken business practices of the United States. Scheduling business appointments and being punctual are viewed as positive attributes throughout the culture. Medium to large sized companies in Iraq are very hierarchical in structure and business decisions are made from the top-down. Social power and titles are held in high regards in the Iraqi culture. Because of the uncertainty avoidance discussed previously it takes time to establish a trusting relationship with businesses and their employees. It is something that takes time but can be rewarding once you get to that point. There are also customs throughout the Iraqi culture that can be considered disrespectful if not followed. A person should only shake hands with their right hand, as the left hand is seen as unclean. Also while conducting business, a person should never apply pressure or try and force hasty decisions because of their uncertainty avoidance. Business meetings are very casual and light in manner; they often resemble a conversation between two friends instead of the transactional relationship that you see in American business. One final business practice that is very important in the Iraqi business culture is business attire that is worn. First impressions are very important to the Iraqi people, so a person going to a meeting should dress in traditional business attire airing on the side of conservatism, and women should wear coverings on their hair when appropriate (Gorrill, 2007).

PERSONAL REFLECTIONS OF AN EXPATRIATE

Starting in November of 2007, one of the authors embarked on a 17 month journey that would change his life forever. He was hired as a civilian contractor for one of the many civilian contracting companies operating in Iraq under a contract from the Department of Defense. He had no previous experience or knowledge of what it was like to work and live in the middle of a war torn country. Throughout his time in Iraq he met and became friends with people from every corner of the globe and delved into the intricacies of different cultures. From his interactions with Iraqis, both as a consumer of their goods and services and as a manager and friend, he was able to get to know several Iraqi citizens and observe intimately how they conduct business.

For the first twelve months of his deployment, he was stationed at Camp Anaconda, a base Northeast of Baghdad in the town of Balad. This was known for being one of the largest bases in Iraq in terms of square mileage and the number of soldiers and civilians on base. One of the prized jobs for any Iraqi was to get a chance to come onto base and sell goods and merchandise to the soldiers and civilians there. This is no easy job to get. Any Iraqi interested in selling their goods on base are thoroughly interviewed by several intelligence agencies; they are searched thoroughly upon entering and exiting the base; and while on base they are accompanied by armed military personnel at all times. Many Americans would think of an Iraqi business as a mud hut with very few amenities or goods sold. This is exactly what the Iraqis are given as a shop on base. The main shop on base sells an assortment of Iraqi souvenirs but the main commodity is the thousands of bootlegged DVDs that are sold. The colloquial term for the shop on base is the "Haji Shop." Most of the people using the term are using it as a form of pejorative statement meant to show some type of superiority over the operators of the shop. One day when he had a few minutes to spare, the author was talking with one of the Iraqis trying to sell the latest arrivals or cheap cartons of cigarettes. The Iraqi is dressed in the traditional Arab Keffiyeh and is in a very jovial and laughing nature. The author asked him about the term "Haji Shop" and if the Iraqi found it demeaning. The Iraqi told the author that to be called a Haji is a great honor; that it denotes a person that has made the holy pilgrimage to Mecca, a requirement for every able bodied person of the Islamic faith. The Iraqi told the author this story with a smile on his face, almost as if he got the last laugh on a joke that missed its target completely.

The transactional atmosphere in the shop is very similar to what one would see in the markets and shops in Mexico City. Almost none of the merchandise has price tags and there is an unspoken expectation of bargaining that is expected by both the buyer and seller. The art of bargaining is just that, an art. For most Americans who are not accustomed to bargaining at a shop, this could be very unnerving at first. If the Iraqi gets the feel that you are new at the process, he will see that you are accepting his initial price and often times try to offer you more goods at the same price or higher prices. There is also a point while bargaining that it becomes insulting to the seller and he may walk away from you or refuse to sell you anything at all. The best way to approach the situation is to try and start a conversation with the seller. As previously stated, the Iraqi people value trust above anything else in business. If the seller feels comfortable with you then bargaining becomes a very fluid process that resembles a conversation between two old friends.

During the last seven months of the author's deployment, he was contracted to the Department of State to oversee operations of the embassy in the southern Iraq town of Basra. It was here that he became a manager of a group of Iraqis that truly opened his eyes to the nature of the Iraqi culture. The same process as mentioned above to get the job working for the U.S. government applied to the Iraqis in Basra. Every morning the group of Iraqi men who were hired to work for the embassy would be picked up at the front gate of the base in a fully armored bus for transportation back to U.S. facilities. The author never gave a second thought to this process until one day one of the workers came to him and told him a story of another worker. Since the State Department took every precautionary step to ensure the safety of embassy workers, much attention was drawn to the Iraqi workers being picked up at the gate in the armored bus. This apparently was spread back into the town and the insurgents took notice. One day after finishing his day's job at the embassy, the Iraqi man went home to find that his son had been kidnapped and was being held for ransom. After this incident, the author began to see a noticeable change in the demeanor and work behavior of his workers. They would disappear for weeks at a time and when they did show up for work they were very distant and reluctant to help. The workers were equating the author with the State Department. They had lost the trust because of the kidnapping and were therefore reluctant to do any business and only did so out of necessity for money.

CONCLUSION

In a country that has a little over 29 million citizens the opportunities to make money are endless. Iraq's natural resources will help provide a financial advantage to a blossoming market. Once the region accomplishes political and regional stability, the market will be able to join the free market economy and will be in a better position to import and export goods and become a member of the global market economy. As with most markets, success is neither guaranteed nor will it happen overnight. Patience and perseverance are the key words to understanding business in Iraq. Those who have the time, money, and patience will surely succeed in the Iraqi business market.

The country of Iraq has spent most of its existence in war and turmoil. It has survived through the brutal regime of Saddam Hussein and is trying to stand back on its feet. The work ethic and the business culture of modern day Iraq is not that different from the American business culture around the time of the Industrial Revolution. The entire business culture in Iraq is built on the idea of trust in an almost friendly exchange of ideas, goods, and services. There is no doubt that once stability has returned to the region, Iraq will be a major player in the world market, if for nothing else than for their possession of vast amounts of natural resources.

(APPENDIX A)

IRAQI POLITICAL ENVIRONMENT

Iraq is located in the Middle East, bordering the Persian Gulf, between Iran and Kuwait. It shares borders with Iran, Saudi Arabia, Kuwait, Syria, Jordan and Turkey. Iraq has an area of 438,317 square kilometers making it the 65th largest country in the world. The country is quite diverse in topography and climate. The population of Iraq is estimated at nearly 29 million, with 67% living in urban areas (CIA Factbook, 2009).

The official language of Iraq is Arabic, though other languages are spoken: Kurdish, Turkoman (a Turkish dialect), Assyrian (Neo-Aramaic), and Armenian. The country's ethnic groups are diverse: Arab 75%-80%, Kurdish 15%-20%, Turkoman, Assyrian, or other 5%. The religion of Iraq is overwhelmingly Muslim 97% with Shia encompassing 60-65% and Sunni 32-37% (CIA Factbook, 2009).

Political environment.

Iraq was formerly part of the Ottoman Empire. It was occupied by Britain during World War I. In 1920, it was declared a League of Nations mandate under British administration. Iraq attained its independence in 1932 as a kingdom, and remained as such until 1958 when a republic was proclaimed. However, the republic was in fact ruled by a number of strongmen until 2003 when Saddam Hussein's regime was ousted (CIA Factbook, 2009).

Saddam Hussein came to power in 1979 and was said to rule with a true "iron fist." He used fear as a regular tactic to keep the Iraqi citizens under his control. Examples of the harsh tactics used under Saddam Hussein are many. Wikipedia.org lists several of them to give an idea of what life was like under the dictator: "Full political participation at the national level was restricted only to members of the Arab Ba'ath Party, which was the political party of Saddam Hussein. Therefore, it was impossible for Iraqi citizens to change their government. Iraqi citizens were not allowed to assemble legally unless it was to express support for the government. The Iraqi government controlled the establishment of political parties, regulated their internal affairs and monitored their activities. Police checkpoints on Iraq's roads and highways prevented ordinary citizens from traveling abroad without government permission and expensive exit visas. Before traveling, an Iraqi citizen had to post collateral. Iraqi women could not travel outside of the country without the escort of a male relative. The activities of citizens living inside Iraq who received money from relatives abroad were closely monitored. In April 1991, Saddam cracked down ruthlessly against several uprisings in the Kurdish north and the Shia south. His forces committed wholesale massacres and used weapons of mass destruction against the people. In June 1994, the Hussein regime in Iraq established severe penalties, including amputation, branding and the death penalty for criminal offenses such as theft, corruption, currency speculation and military desertion, while government members and Saddam's family members were immune from punishments ranging around these crimes" (Wikipedia).

The ruthlessness of the Hussein regime and its inner circle is exemplified by the story of a young Iraqi woman named Zainab Salbi. Marci Shimoff in her book Happy for No Reason (2008) relates Zainab's story:

"Like all Iraqi kids, I was instructed to call Saddam "Amo" (Arabic for "uncle") but unlike the other Iraqi kids, I was often invited with my family to palace parties. Being in Saddam's inner circle was fraught with danger. My mother instructed me never to relax or let down my guard. Many times we'd be sitting in his living room having a conversation and he would casually mention killing a member of his family or a friend or colleague. Then he'd watch us very carefully. Offending Saddam with the wrong remark or facial expression could be fatal, so I learned to match my responses to his. If he was serious, I was serious. If he smiled, I'd smile. For years, my family and I lived in fear of this man and his craziness.

Then, when I was almost twenty, my mother asked me to accept a marriage proposal from a man I'd never met, an Iraqi expatriate who lived in Chicago. I was horrified. Marrying someone I didn't know and definitely didn't love went against everything my parents had said they wanted for me: love, passion, and the freedom to choose my own life. At first, I refused, but my mother cried and pleaded with me so desperately, I finally agreed, more to make my mother happy than anything else. What I didn't know then, and my mother wouldn't tell me for another ten years, was that she was worried that Saddam might have begun to have amorous intentions toward me and she was frantic to get me out of Iraq and out of his reach" (Shimoff, 2008: 72).

In August 1990, Iraq invaded Kuwait. The Iraqi forces were expelled by US-led UN coalition forces during the Gulf War of 1991. Following the First Gulf War, the UN Security Council (UNSC) requested Iraq to destroy all weapons of mass destruction and long-range missiles and to permit UN verification inspections. Continued Iraqi noncompliance with UNSC resolutions ultimately led to Second Gulf War in March 2003 and the ouster of the Hussein regime. US forces have remained in Iraq under the UNSC mandate since that time. In 2005, Iraqis approved a constitution and elected a Council of Representatives. Following the national referendum and election, Ibrahim al-Jaafari was selected as prime minister. He has since been replaced by Nuri al-Maliki. The transition to a constitutional government has occurred and in 2009 provincial council elections took place. Elections for the next Council of Representatives

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Don B. Bradley III, University of Central Arkansas

Justin Eric Brown, University of Central Arkansas

Michael J. Rubach, University of Central Arkansas Table 1: Cultural values and Priorities United States Arab Countries 1. Freedom 1. Family Security 2. Independence 2. Family Harmony 3. Self-reliance 3. Paternalism 4. Equality 4. Age 5. Individualism 5. Authority 6. Competition 6. Compromise 7. Efficiency 7. Devotion 8. Time 8. Patience 9. Directness 9. Indirectness 10. Openness 10. Hospitality (Source: Adopted from Hodgetts and Luthans (2000). International Management: Culture, Strategy and Behavior). Table 2 * Doing Business in Arab Countries * Never display feelings of superiority* Do not take credit for joint efforts * Efforts to sidestep red tape can be regarded as disrespectful of legal and governmental institutions * "Wasta"--Connections are extremely important * Patience is critical to business transactions (Source: Adopted from information in Hodgetts and Luthans (2000). International Management: Culture, Strategy and Behavior). Table 3: Differences in Middle Eastern and Western Management Styles Emphasis on Leader's Leadership Highly Authoritarian Style and Performance Organizational Highly Bureaucratic Highly delagatory Structures Decision Making Top-level Decisions; Sophisticated Risk Adverse Planning Techniques Performance Informal Control Advanced Control with Evaluation & Control mechanisms Focus on Cost reduction Personnel Policies Heavy Reliance on Qualifications are Bases Personal Contracts for Selection Decisions Communication Social Position Stresses Equality; Present; Rigid Chain Friendships are not of Command; Binding Binding Friendships; "Wasta" (Source: Adopted from information in Hodgetts and Luthans (2000). International Management: Culture, Strategy and Behavior.