In this current business scenario, a foreign organization needs to face significant challenges in terms of the host country’s economic structure. For instance, Morocco is known to be an Islamic nation. Similar to another majority of Islamic nations, the business environment of Morocco is highly influenced by the religious beliefs of the nation which might create certain challenges for the American Clothing & Apparel Company. Notably, King Mohammed VI, the pre-eminent authority of the political systems of Morocco, declared to build a democracy and granted limited executive power to the Prime Minister of the country in the year 2011. This facilitates a significant change in the economic structure of the nation developing it as a ‘Unitary parliamentary democracy and Constitutional Monarchy’ (Arieff, “Morocco: Current Issues”).
According to the World Bank, the economic status of Morocco is often regarded as a Lower-Middle-Income (LMI) country. The Free Trade Agreement (FTA) with the United States was conducted by the government of Morocco in the year 2006 indicating the objective of the economy to enhance the trade relationship between the two nations, i.e. Morocco and US (United States Agency for International Development, “Morocco New Business Opportunities Program”). It is worth mentioning that in the current economic regimes of Morocco, Foreign Direct Investment (FDI) is considered as an important tool for its overall development. It is also regarded as a major indicator of the efficiency of those policies and incentives implemented toward investment activities undertaken by Morocco. Based on this notion, the economic trade policies within Morocco have been developed to facilitate the trade relationships on the international ground enhancing the business opportunities within the nation (PKF, “Doing business in Morocco”). It is in this context that the continuous growth attained by the nation in its recent fiscal performances can also prove to be quite virtuous for new foreign entrants in the Moroccan business environment. The political environment of Morocco was highly influenced by the misconduct of the numerous illicit and large numbers of activities that were illustrated as against human rights. Moreover, the various parts of the country have been under detention by the government due to illegal activities.