Managing HR in Arab Countries: The case of “The Arabco Company” (10 marks) The company was…

Managing HR in Arab Countries: The case of “The Arabco Company”(10 marks)

The company was established in January (1998) in Saudi Arabia and has expended during the past 20 years into other countries in the region, including U.A.E, Bahrain, and Oman. The company is a subcontractor for various construction activities, mainly civil and electromechanical works. Under the leadership of its founder, Mr. Majed Al Amri, and due to the wise management of the previous HR Director Mr. Hazem Shaker and the commitment of all employees; the company gained a good reputation in the Arab region, and marked itself in the construction industry for quality and the timely delivery of projects.

In the year 2019, the HR director, Mr. Hazem Shaker, retired and a new Young HR Director, Kareem Sabry, was appointed as an HR Director in the company. In order to meet the economy downturn

challenge that happened and due to the Covid 19 pandemic, Kareem was proud to tell Mr. Majed that he will implement plans that can help the company to decrease spending and increase revenues.

Kareem attempted to change some of the company’s HR policies and practices by the implementing following practices:

? Lowering salaries for all employees.

? Eliminating some benefits such as schooling fees, and medical insurance provided for the employees’ families.

? Eliminating the test method from the selection practice and relying only one interviews.

? Reducing the training and development budget.

? Laying off three of the old managers who receive high salaries.

? Hiring two young women and one fresh graduated young man who were willing to work for lower salaries and very low financial incentives.

In less than four years, the clients started complaining of poor delivery of Arabco projects which drew Mr. Majed al Amri attention to that something was going wrong, but he did not know what. He met with Kareem and learned that the employees’ turnover rate was very high, and at the time an employee was hired, another one resigned.

After visiting the 20 projects and finding similar problems in many of them, Mr. Majed noticed that five senior project managers (all are line managers) had resigned, and many of their team members were not happy in the company. He wondered what action he should take.

Questions:

1. Identify the problem/s resulted from the new policies and practices. Why do you think it happened?

2. Do you think that Mr. Majed was also responsible for this problem to occur?

3. How would you evaluate the hiring of the two women and the fresh graduate young man?

4. As the new policies have shown negative impact on the company’s relevant outcomes, how can a good HRM strategy help the company in creating a sustainable competitive advantage?

5. Do you think that we, in Saudi Arabia is experiencing an average level of changes in developing and implementing HR policies and practices? Does the employment law provide strong explanation and guide for many of the HR practices?