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.
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.
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). …