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Implications for recruitment in a multinational organization: a case study of human resource management in the United Arab Emirates



Introduction

The case is a study of an organization located in Sharjah, one of the seven emirates that form the United Arab Emirates (UAE). The case study is set in a country where there is a governmental priority of full employment for the local (national) population, and at the same time the majority of the population is non-national. The company is in the industrial sector, is one of the biggest cable manufacturers in the region, and is reliant to a great extent on skilled and non-skilled foreign workers' to staff its factory. This case, therefore, investigates human resource management issues of national importance, and specific recruitment issues important to the company. The study takes place in 2010, an era of unsteady market growth, affecting the short- and long-term planning for the company. The Human Resources Department is under the leadership of Human Resources Manager, Mr Labib Abu-Lebdeh, and it is managed through his professional staff.


The UAE - external environment

In 1972, the UAE was formed from seven states in the Arabian Gulf, Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Ras Al-Khaimah, and Fujairah. Since its establishment, the UAE has followed a growth strategy, and has become one of the most modern, developed countries in the world. The UAE is ranked no. 32 on the Human Development Index, as measured by such indicators as health, education, and income. Balakrishnan (2010, p. xxvi) describes the UAE as a knowledge economy, ''focusing on creation, retention and transfer of knowledge''. Many of the companies attracted to the UAE are directly from that knowledge economy. The manufacturing sector in 2010 was the third largest contributor to gross domestic product according to the UAE yearbook, an official fact book. In 2009, the global economic downturn was evidenced in the UAE through market contraction, particularly in the construction and property sectors. However, growth predictions were made for 2010, the industrial production growth rate was estimated to increase by 3.2 per cent, according to the UAE yearbook and the American CIA web sites. The UAE is a global economy as it trades with many parts of the rest of the world; it is also a global country in deference to the myriad of nationalities that work there.

The UAE population is growing. The national (Emirati) population was 2.4 million in 2004, ''approximately 25 per cent of the total population'' (UAE Interact, 2004; Kemp, 2008, p. 22, 2009). Again according to the UAE yearbook, there has been an annual growth in population of 6 per cent, and by 2009 the numbers had more than doubled to 5.06 million, with 80 per cent of the population being expatriate. A breakdown of numbers of other nationalities shows that Arabs and Iranian represent 23 per cent of the population, South Asian, 50 per cent, and

other expatriates (including Westerners and East Asians) are8 per cent (CIA, 2010). There is a tendency to rely on expatriate workers in the private sector because they possess the skills needed to supply those organizations. Also, there is more of willingness for expatriates to work in the private sector. The nationals' preference of work place remains to a large extent in the security of public organizations where benefits are greater. Other outlets for Emirarti employment lie within family companies and increasingly in entrepreneurship.


The internal environment

The organization henceforth is given the pseudonym NWC for reasons of confidentiality. NWC is a private, family owned company; this is usual in the Middle East and is also fairly common for firms worldwide. The group headquarters is based in the Kingdom of Saudi Arabia, and it has been in existence for 20 years. NWC is an industrial company manufacturing cables mainly for the domestic market and for export to other Arabian Gulf countries. The organization set up its factory operation in Sharjah in 2001, and it is located conveniently for road and air transportation. There are two sales offices in the Emirates of Dubai, and Abu Dhabi for marketing to customers across the country. Hours of working are Saturday-Wednesday, 8.30 a.m. to 5.00 p.m. and Thursday, 8.30 a.m. to 2 p.m. These operational hours are common practice for industrial companies in the UAE. The official language of the UAE is Arabic, but business language in the country and for NWC is English. The company is a member of the Sharjah Chamber of Commerce and Industry, the Chamber is charged with working with all the companies and establishments practicing economic activity in the Emirate of Sharjah.


A family member is the Chairman of NWC, he is also known as the Managing Director/Owner. Mr Al Zaab is a Saudi and is based in the Kingdom working at group headquarters for most of the month.Day-to-day operations of NWCis delegated to the Lebanese General Manager. Reporting into the General Manager are the Senior Managers, designated as ''Top Management'' on an organizational chart (Figure 1). There are six layers in this organizational hierarchy, which are applied to each department; management executive; supervisory; administrator/coordinator; skilled/operatory/clerical; unskilled/service (Figure 2).

The senior management team is composed of nine managers from seven different nationalities; the majority originate from the Middle East (Table I).

There are 203 employees, representative of 18 different nationalities with the majority (43) from the Philippines (Table II).

There is a preference in the company to keep the work force multinational to prevent ethnic groups arising and causing division or cliques in the company. The multi-nationalism is also an outcome of governmental policy (see later).


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The Human Resources Department

The Human Resource/Administration department is responsible for all aspects of human resources management, from manpower planning to recruitment, compensation arrangements, through performance management to attrition. The Human Resource Manager is also the Administration Manager, having responsibility for both functions. Mr Labib Abu-Lebdeh is known by colleagues and staff as Mr Labib, it common practice in the Middle East to use title and first name. Mr Labib is Jordanian, aged 41 and has lived for


IMG-20200817-WA0004.jpg

20 years in the UAE. He has been employed for two years by NWC, and previously worked in human resource management roles within other companies. Mr Labib has a Bachelors degree in Commerce. He currently manages a department of 14 employees, although there is provision for 17 employees (Figure 2).


The two main employees, Mr Faakhir and Mr Kaamil, are at the Management Executive level. Mr Faakhir is aged 31, of an Indian family but born and brought up in the UAE. He holds a computer engineering degree and an MBA specializing in human resources. Having been employed eight years with the company, NWC has been his only employer. Mr Faakhir's position is ''Human Resources & Training'', his main involvement in recruitment is to communicate with the overseas and local recruitment agencies. Mr Kaamil is a 33-year-old law graduate from Syria, employed by NWC for seven years, having worked in the human resource role for the past five years. His title is ''Administration & Personnel'', and his role involves post recruitment work, applying for and obtaining work visas. Mr Kaamil works closely with a Public Relations Officer (PR Officer), an Emirati responsible for liaison with the government offices. Transportation and Accommodation[1] Supervisors report to Mr Kaamil. There is also a female HR Assistant who works with both Mr Faakir and Mr Kaamil, she is responsible for clerical work. Mr Faakhir and Mr Kaamil work closely together in the day-today work.


Recruitment

There is a governmental priority to ensure that all nationals are employed and trained to meet the needs of the local labor market. In addition, an objective is a reduction in foreigners in the UAE labor force. The UAE National Human Resources Development and Employment Authority (TANMIA) has a mission to provide all UAE nationals with employment, training and development opportunities. The combined priorities of full national employment and a reduction in the reliance on foreign labor constitute the Emiratization policy. Keeping within the spirit and the laws of that policy, NWC attempts to attract nationals ''to work in all functions within the company'' (Al Tijarah, 2009, p. 24; company brochure, 2010, p. 7). On the wall in the HR office is a certificate of appreciation to NWC for their attendance as a 2004 careers fair, ''careers UAE, empowering Nationals''.


A company that wishes to appoint a non-national must sponsor that person, and obtain a work visa from the government on their behalf. It is necessary to monitor the mix of nationalities because of the tracking by government on visa arrangements (Table II). There is a higher classification (A) for companies when they keep within a framework of nationality quotas and NWC has that classification. If quotas are not followed, then a company will be classified as ''B'' which increases the cost of visas. This policy is referred to in a blog of January 1, 2011, entitled The Ministry of Labour UAE announced minimum wage limit for different categories of workers. The HR department is responsible for the administration of visa applications; the process takes 30-45 days. The company applies for a work permit online for approval by the Ministry of Labor[2]. Once approved, an entry visa is applied for; approval takes one to seven days, if less than seven day approval is required it will be more costly. After arrival in the country, the worker undergoes a medical examination at a local hospital, the contract is then signed, and a labor card and residence visa[3] are arranged. Applications for visas are dealt with online[4], but the PR Officer also has to deliver a hard copy of all documentation to the Ministry of Labor office. As well, a hard copy of all documentation is maintained in the staff records. All arrangements and costs associated with visas are the responsibility of NWC, and the organization and administration is handled by the HR department.


A quality assurance (QA) program is followed rigidly by the company in all aspects of its work, it is a necessity that the Company ''selects experienced and skilled workers to operate the equipment and competent inspectors to check products for any defects'' (Al Tijarah, 2009, p. 24). QA also covers personnel procedures. Manpower planning is an aspect of the company plan and is completed at the beginning of the year and recruitment continues throughout the year. The departmental managers work closely with the HR Manager to specify the manpower requirements for each department. A job responsibilities and authority document is created for each position, and this is approved by the Chairman (Exhibit 1). That document includes details on job responsibilities, a role definition, minimum qualifications and experience. A personnel request form is raised by the departmental manager when the department needs staff. Selection is the decision of the department manager according to Mr Labib, but he also explains that any applicant needs to meet the ''rules and regulations'' within the company, hence it is considered that the ''right person is selected by the manager and myself''. Exceptionally, the GM will want to recruit a new graduate that he knows of but this is rare, Mr Labib considers that can be a good thing as ''graduates can learn''. Figure 3 shows the flowchart that is followed for recruitment.


Overseas hire

The vast majority of recruitment is in the area of factory workers for the Production Department, 98 employees (48 per cent of the workforce) is in that department (Table II). The HR Manager says they are always looking for specialist skills, but these are not easy to find because there are fewer and fewer factories in the UAE. Therefore, the usual recruitment source is via an overseas recruitment agency, specializing in staff experienced in the cable industry. The agency e-mail CVs of available talent to the HR department who create shortlist for the position based on the documentary evidence, e.g. age, qualifications and experience. There is a reliance on the overseas recruitment agency to verify the credentials of the candidates. An interview is arranged, and the information is shared with the respective department head who conduct the interview by telephone. The recruitment company sends an offer letter to the applicant, and this may go back to NWC for negotiation.


Local hire

A decision is made to recruit locally if there is a possibility of available expertise in the country, e.g. administrative staff would usually be hired locally. Recruitment adverts are placed in the local newspapers, e.g. The Gulf News and The National. Contact is also made with TANMIA to check on the availability of nationals for the particular vacancy. If an applicant is available locally then face-to-face interviews take place at the company site.


Information is now given on a series of interviews conducted for two current vacancies for a Sales Coordinator in the Sales Department and of a Secretary to the Production Manager (Exhibit1;Table III.).Vacancies were advertised in the Gulf News; as is a usual practice in this country the salary was not stated in the job advertisement. First interviews for both these positions took place with Mr Abu-Lebdeh, he had already interviewed three applicants who were unsuitable. In line with the quality processes in the company, there is an Interview Summary Sheet completed for each candidate (Exhibit 2). The summary outlines the job specifications, the applicant's background and career accomplishments. Furthermore, the summary sheet has a page for the interviewer to list ''intangible'' impressions of a candidate .All interviewees were female. Interviews1,2and7 were briefly interrupted by telephone calls or by other employees coming into the Human Resource Management office. Many candidates were asked what their salary expectations were. If an interview candidate was successful they completed a short computer test. The secretarial candidates were then sent for interview with theProductionManager.TheSalesManagerwasawayonthedayoftheseinitialinterviews,so suitable candidates for the Sales Coordinator position would be interviewed at a later date:


Candidate (1).

Worked in Taiwan and the Philippines previously. Two years with a UAE Company, but having to leave because company reducing workforce due to economic downturn.


Candidate (2).

 Is in the UAE on a one month tourist[5] visa, attempting to obtain work as husband is employed in the UAE. Currently employed as a Secretary by a construction company in Taiwan - two years. Travel time to NWC from home is two hours by bus.


Candidate (3).

The interview was conducted in Arabic, unlike the previous interviews which were conducted in English. A question regarding her aptitude in English invoked the response, ''a little''.


Candidate (4). Is in the UAE on her father's visa[6]. Works in an Oil and Gas company where she mainly prepares quotations.


Candidate (5).

Was a Sales Coordinator for three months in the UAE, but lost her job due to work force reduction. There is difficulty in working out from her CV


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when and where she has worked previously, nor can she explain this adequately.


Candidate (6). Has been in the UAE for six years. Has worked in Sales and Accounting in the UAE and the Philippines over the last ten years. Holds a driving licence. Is asked if she is single, and whether she has a boyfriend. Confirms that a no objection[7] certificate will be given by her employer. Salary expectation, she is told ''is beyond our range'', and she is then informed that the salary is AED 3,000[8] per month.


Candidate (7).

The interviewee stated that she had been waiting two hours for the interview. Confirms she has a driving licence. Worked in Philippines for three years in accounting. Her residence visa has not been processed yet, as has only been in the UAE for a month. Has now lost her job in a property company as the workforce has been halved. Told her salary was ''beyond our range'', she replied ''that is not good'', and the interview was politely terminated.


Candidate (8).

Had worked in the hotel trade for four years, and in sales for 18 months reporting to the Sales Director. Her working/residence visa has now been cancelled[9], and the company will not give her an no objection certificate[10]. It is not known why she left or was let go by the company. The applicant says she will pay off her ban[11]. Was paid AED 3,600 in her last position, plus the company supplied transport to and from work. Is informed would be paid AED 3-3,500. Decision was that her salary expectations were too high, so she was not asked to return for another interview.


The HR Manager decided to send Candidates 1-4 to be interviewed by either the Production or Sales Manager. Candidate 3 was included because although her English was weak, she had a good reference and he thought it would be good to diversify the nationalities in the offices. Later the Sales Manager decided that none of the candidates were suitable either because of lack of experience or poor English. As the Sales Coordinator is a customer facing position, a further reason given for not selecting the applicant was ''poor'' appearance. Adecisionwasmadetore-advertisetheSalesCoordinatorposition.TheProductionManager was still making a decision about the candidates' suitability for the secretarial vacancy.


Conclusion

As was studied in the case, the company exists within an external environment tthat has many implications for recruitment. Governmental policies for local employment and diversity within a work force need to be upheld. As skilled and unskilled labor is mainly sourced from overseas, there is reliance on and liaison with recruitment agencies at a distance. As a multinational organization, internal QA procedures need to be followed. The Human Resource Department strives to effectively steer NWC's recruitment policy through the internal and external forces that impact on the process.


Notes

1. The HR department arranges accommodation for approximately 150 employees who live on site in company provided accommodation. Drivers are used, e.g. for picking up and delivering guests to and from hotels and the airports.

2. The official language at the Ministry of Labor is Arabic.

3. A residence visa is granted for one to three years, it can be renewed if the work visa is renewed.

4. In the HR department there is access to the internet because of the need for accessing governmental sites. Within NWC are strict rules to only use the internet for work purposes, and some departments do not have access.

5. Applying for work on a tourist visa is not allowed, but the practice continues.

6. The father has a job in the UAE and is allowed to sponsor his wife or daughter.

7. A no objection Certificate is necessary if an employee wishes to work for another company. 8. The UAE Dirham (AED) is linked to the US$ rate $1¼AED 3.673. 9. She will need to leave the country within one month. The cancellation of the visa and a refusal of a no objection certificate means she is effectively banned from working for six months.

10. The cancellation of the visa and a refusal of a no objection certificate means she is effectively banned from working for six months.

11. Paying monies to the Ministry of Labor to enable her to work within the six months.



question

QUESTION TWO

Discuss how the company's strategic human resource plans are influenced by the external environment. (25 Marks) 


QUESTION FOUR

From a Human Resource Planning perspective, discuss the advantages and disadvantages of making expatriate appointments in the United Arab Emirates Company? (25 Marks)

IMG-20200817-WA0001.jpg
emba%20mkhize/Documents/honours%20hr/assignment%203/Assignment%203%20Case%20Study.pdf
There is a preference in the company to keep the work force multinational to prevent ethnic
groups arising and causing division or cliques in the company. The multi-nationalism is also
an outcome of governmental policy (see later)
Figure 1 Organizational chart
and Iranry
Source: Quality Management System Quality Manual, Reviewed and approved by: Owner Managing Director, Prepared by: (QAM Deputy M.R)
PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES | VOL. 1 NO. 4 2011
IMG-20200817-WA0002.jpg
Figure 2 Organizational chart - Human Resources Department
Human Bees.rea
Isch: Relation Offest
Human Resource
Cocrana
Accompdating
Source: Prepared and reviewed (HR Manager) Compiled by (QA Manager) Approved by (Owner Managing Director)
Table I Senior management team
Predominant
Gender
No. of
IMG-20200817-WA0003.jpg
nba%20mkhize/Documents/honours%20hr/assignment%203/Assignment%203%20Case%20Study.pdf
Candidate (4). Is in the UAE on her father's visa[6]. Works in an Oil and Gas company
where she mainly prepares quotations.
Candidate (5). Was a Sales Coordinator for three months in the UAE, but lost her job due
to work force reduction. There is difficulty in working out from her CV
Table III Interviews
Interview duration
Computer
Salary expectation
No.
(minutes)
Nationality
test result
(AED per month)
Qualifications
Filipina
Pass
Not asked
Engineer
ONOURON
13
Filipina
Pass
2,000-3,000
BSci (Business Administration)
16
Syrian
Fail
Not asked
Sales in a clothing store
12
Filipina
Pass
2,300
BSci (Computer Science)
7
Filipina
Pass
2,500-3,000
BSci (Business Administration)
10
Filipina
Pass
4,600
BSci (Commerce)
12
Filipina
Pass
7,500
BSci (Commerce)
11
Filipina
Pass
3,600
BSci (Computer Science)
Source: Kemp (2011)
VOL 1 NO. 4 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7
IMG-20200817-WA0004.jpg
Table II Nationalities
Staff details nationally wise as on 2 January 2009
S.no
Department
Syrian
British
Lebanese
Jordanian
Indian
Pakistani Sri Lankan
Filipino
Indonesian
Bangledasian
General Manager's Department
M.D. Plant Manager
Operations Department
Sales and Matketing Department
Purchase Department
Quality Assurance Department
Technical Department
Human Resources Department
10
Accommodation Sec,
IT Department.
11
Finance Department
12
13
Maintenance Department
QC Department
14
Warehouse Department
15
Shipping Department
16
17
Planning Department
Production Department
Total
CON
19
5
BaNN-WN ON--
24
Grand Total
S. no
Department
Iraqi Egyptian Sudanese
Kenyan
Turkish Emerati
Omani
Nepalese
Tota
General Manager's Department
M.D. Plant Manager
Operations Department
Sales &Marketing Department
Purchase Department
Quality Assurance Department
Technical Department
Human Resources Department
2
Accommodation Sec.
2
10
IT Department
Finance Department
N -
Maintenance Department
13
Q.C. Department
14
Warehouse Department
15
16
Shipping Department
Planning Department
Production Department
Total
3
Grand total
203
IMG-20200817-WA0005.jpg
Source: Prepared and reviewed (HR. Manager) Compiled by (QA Manager) Approved by (Owner'Managing Director)
Table | Senior management team
Predominant
Gender
No. of
nationality
Role
Nationality M
F Qualification
Tenure Subordinates in department
General Manager
Lebanese
MBA
28 yrs
8
Lebanese
IT Manager
Syrian
BSc (Computer Science)
6 years
Indian
Procurement Manager
Indian
Bachelor (Commerce)
8 years
10
Indian
Technical/Quality Control
BSc (Mechanical
11/2
Manager
Indian
Engineering)
years
14
Indian, Bangladeshi
Finance Manager
Egyptian
Bachelor (Commerce)
8 years
Egyptian
Emirarti,
Administration/HR Manager
Jordanian
Bachelor (Commerce)
2 years
27
BSc (Computer Science)
11 mths
2
Bangladeshi
Quality Assurance Manager
Iraqi
Sri Lankan, Filipino
GM Sales and Marketing
Lebanese
BSc (Electrical Engineer)
2 years
12
Indian
Plant and Production
BSc (Mechanical
Manager
Syrian
Engineer)
7 years
98
Filipino
Not
Legal department
Emirati
License in law
known
0
Emirarti
Other departments (5)
28
Av. 7
7
210
203
Total
9
years
Source: Kemp (2011)
The Human Resources Department
The Human Resource/Administration department is responsible for all aspects of human
resources management, from manpower planning to recruitment, compensation
through performance management to attrition The Human Resource

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