Revisiting Doing Business in the Middle East

By Desplaces, David E.; McIntyre, Nancy K. | New England Journal of Entrepreneurship, Spring 2009 | Go to article overview

Revisiting Doing Business in the Middle East


Desplaces, David E., McIntyre, Nancy K., New England Journal of Entrepreneurship


This case engages students on a number of issues common to doing business in other countries, specifically in the Middle East. It is intended to be a basis for class discussion rather than to illustrate either effective or ineffective handling of the situation. The case seeks to integrate issues of international management and cross-cultural conflict and negotiation. Students are challenged to diagnose a cross-culturally sensitive situation and develop solutions in a team environment under limiting time restraints. This case is also designed to help students understand the cultural aspects of a situation and how different solutions could have major consequences on the bottom line of a company.

Aboard an Offshore Services Contractor's (OSC) flagship somewhere in the Arabian (Persian) Gulf, the captain and crew, as well as two other support vessels owned by OSC, were busy offloading fuel. It was the middle of the night. While the fuel was actually intended for an offshore drilling rig owned by the government of one of the most fundamentalist Islamic and radical countries in the region, offloading the fuel and selling it to smugglers had been a profitable business venture for OSC for quite a while.

In fact, over the years, the company had successfully offloaded more than 745,000 gallons of fuel worth close to $500,000.The captains of all three ships, along with all of the crew members had received money for either actively taking part in the embezzling scheme or for looking the other way when the offloading took place. Although they felt that the risk was worth the payoff, the crew knew that they risked being charged with contraband. They also understood that if they were caught, according to Islamic law, custom's regulations and international law, it would mean that they would risk losing all of the assets of OSC, and might also receive stiff prison terms under horrific conditions.

As the captain scanned the water watching for Coast Guard vessels that regularly patrolled the Arabian Gulf waters, he thought about all of the stories he had heard of boats that had been boarded and searched by the various Coast Guards of countries in the Middle East - stories that included the loss of the cargo, the seizure of the ships, and even imprisonment for the captain and crew. He knew that getting fired by OSC was the least of his worries. What concerned him even more was that if he and his crew members were caught stealing the fuel, they risked being punished under the regulations of Sharia, often referred to as Islamic law. This punishment could include fines, imprisonment, mutilation (i.e., the cutting off of their hands), and even death.

A few hours later, the lights of the Coast Guard vessels scanned the deck of the OSC vessels, and began the process of seizing both the vessels and the cargo .The captain realized that he and his crew might have just made the biggest mistake of their lives. Although he could not get a signal on his cell phone and thus could not contact the CEO of OSC, he hoped that his boss would hear the news soon and come to the rescue of the crew of the three vessels that were now being seized.

Offshore Service Company

Offshore Service Company (name disguised) was formed to provide ships to service offshore drilling platforms. OSC was the brainchild of DJ (name disguised), a 59-year-old British national who had been living and working as a civil engineer in the Middle East for 25 years. DJ worked hard to build both his business and his reputation in the petroleum service industry. He was now living in Dubai, the economic capital of the United Arab Emirates (UAE) in the Arabian Gulf. Recognizing the growing need of large petroleum companies for expert offshore and marine support services, DJ formed the company in 1977. With the help of a local partner, DJ created OSC as an integrated service provider of a range of products and services for oil, gas, and petrochemical companies (mostly providing support and resupplying drilling rigs on the seas). …

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