HRM Processes and Practices in UAE - Essay Example

? HRM Processes and Practices in UAE HRM Processes and Practices in UAE In order for a business to succeed in a country, it is highly important for the entity managing the business to understand the business environment of the country in its entirety. The entity must ensure that the business is feasible in accordance with the culture of the country and that it would turn out to be profitable. The country that would be analyzed in respect of its business environment and Human Resource Management (HRM) processes and practices in this paper is United Arab Emirates (UAE). UAE has significantly developed in the recent past and in a very short period of time it has become an example of economic growth. UAE has been attracting investment from all around the globe and it is being considered one of the best avenues for business expansion. The analysis conducted in the paper would try to provide sufficient foundation for the fact that UAE is a suitable avenue for the expansion of business. Socio-Political Background of UAE UAE has been providing routes to international business for centuries and it has been providing access to 1.5 billion consumer markets in West Asia, Africa and East Europe. Thus, it can be said that UAE has been a suitable avenue for international business expansion for a very long time. However, in the recent past, the infrastructural development in UAE has made the country even more feasible for business expansion in the UAE. The economic development in the country makes investment in the country profitable in short term. Over the past 26 years, the economy of the country has swelled by more than six times. In numerous cases, the investment in a business in a country does not turn out any profits for years however the accelerated economic activity in the UAE ensures that investment in the country would turn out profits in a shorter period of time (Oxford Business Group). The political environment in UAE is also feasible for business expansion as the visionary leadership of the UAE is diverting all its efforts towards industrial and economic development in the country. The leadership of the UAE has been really encouraging towards international businesses who intend to invest in UAE. Therefore the political environment of UAE is feasible for the establishment of business in the country. The country is one of the top producers of oil and this fact adds up to the feasibility of the country as a business expansion avenue. Dubai International Airport offers 300 flights on a daily basis to and from around 100 destinations therefore managing a business in UAE would not be a problem since it would be possible to be available in the UAE at any time. Business Environment in UAE Due to the increased economic development in the recent past, UAE has become the center of attention for international investors. A number of international business have started operating in UAE and due to presence of organizations from all around the world, the business environment in UAE is not static. The business environment in UAE is dynamic and it responds towards the increasing international investment in the country. The following factors would shed some light upon the business environment in UAE: Organizational Structure The organizational structures in the UAE are dynamic as business can have complete foreign ownership. Local businesses have an Eastern influence therefore they have hierarchical structures, however it is not necessary for all the organizations to have a hierarchical structure and the line of command can be shortened by adding channels of communication among different levels (Hvidt, 2007). Industrial Relations Industrial relations in UAE are influenced by the political environment of the country. UAE is a federation therefore there are no political parties or elections. Due to lack of any political pressure, the industrial relations are not founded upon unions or any political parties. Due to the increasing economic development, the industrial relations are facilitated by the government. The structure of the government consists of three main levels that are; the federal government, emirate level for each of the emirates, and municipal government. Therefore, power is mostly hierarchical and it is delegated down through the hierarchy. The industrial relations are regulated through federal laws. Since the focus of the leadership of UAE is towards the industrial development, therefore the industrial relations in UAE are such that they facilitate the establishment and maintenance of a new business in the region. HRM Practices The HRM processes in the UAE are regulated through the Federal Labor Law No. 8. This law covers almost all the aspects related to salaries, termination and gratuity etc. Apart from the aspects of the HRM processes covered by this law, the human resource policies and procedures are designed by the human resource management departments of the organizations. The organizations operating in UAE normally follow the processes provided by the law but the secondary and discretionary policies vary depending upon the policies of the organizations. Some organizations promote an innovative culture therefore they provide more flexible work environment to their employees. Options such as; flexible work hours, flexible work days and leave encashment plans are provided to the employees. Internal control procedures of the organizations also vary depending upon the overall structure of the organization. Procedures such as recruitment of employees and termination of employees are normally designed by the human resource management officials of the organizations, and they are approved by the leadership of the organization. Some of the important labor laws in UAE are the following: as of January 2011 the maximum age of foreign workers to be employed is 65 years, foreign national must acquire the work permit before being employed otherwise they may be fined heavily, and employers cannot hold the passport of their expat employees. Management Styles The local business norms suggest that the management style prevalent in the UAE organizations is directive and paternalistic. Managers are supposed to provide clear instructions to the subordinates and the latter carry out their work precisely in accordance with the instructions they are provided with. Lack of directional management is perceived as confusing and sometimes as poor management. For this overly directional management, local managers may seem to be rude or abrupt to the staff to the foreign managers. The staff is supposed to respect the manager and the dynamics of authority are clear within the organizations (Bono & Jones, 2011). Conflicts between Cultures Since UAE is an Arab country therefore the culture of the country is significantly influenced by the Arab culture. There are a number of conflicts between the Arab and the Western culture. One of the conflicts is that of the importance of the family in the life of an individual. In UAE, family holds significant importance in the life of an individual while in the Western culture, the family is important but not central for an individual. This culture also influences the organizational culture where the manager is like the head of a family and the employees are supposed to respect and follow the leader. Another cultural difference that may be of importance for international businesses is the importance attached to ‘time’. In Western culture, time is of utmost importance and there are a number of deadlines to be met however the work environment in Arab culture is a little more relaxed. Another significant cultural difference is that of the religion. In Arab cultures, religion is central to life while in Western cultures religion is important but not a central part of the lives of the individuals and the religion is merely treated as a personal choice. For designing the human resources processes in UAE, religious aspects are considered by the policy makers. Role of Training and Development For an expatriate manager, it is highly important to understand the business environment and organizational culture of the country. For this purpose, training and development can assist the expatriate manager in understanding the cultural differences necessary to understand the staff (Noack, 2007). Training and development hold significant importance in specifying the culture and work environment of an organization. The leadership of an organization communicates the ethical principles and direction of communication that is to be observed in the initial briefing of the staff. In order to ensure that the employees of an organization understand the overall culture of an organization, the leadership of the organization arranges training and professional development sessions. For an expatriate manager, training of the staff is important for the same reason that it helps the manager initiate the staff by communicating what is expected from the staff and the direction of communication. Thus, training and development of staff are important for the success or failure of an expatriate manager taking a position in UAE. Strategies for Successful Repatriation Repatriation of an expatriate manager can play an important role in managing a business in a foreign territory. Since the manager would be aware of the culture and business environment of the country therefore it would be a wise decision on the part of an organization to send such an expatriate manager to manage its business in that country. The strategy to be applied by an organization for supporting the successful repatriation of an expatriate manager should be to ensure that the manager knows about the business environment of the country and that he is capable of carrying out the work in accordance with the global standards of the organization. It is also important for an organization to consider both entry and exit of an expatriate manager because it may become necessary for the organization to require the services of the expatriate manager in some other geographic location once the business in the targeted country is settled. Conclusion From the analysis of the socio-political environment, business environment and the prevalent labor laws in UAE, it can be inferred that UAE is a feasible location for an organization to expand its business in. The economic development in UAE and the encouragement by the government for international investment in UAE can prove be really helpful for a new business to grow in UAE. References Bono, S. D., Jones, S. (2011). Managing Cultural Diversity. Meyer & Meyer Verlag. Hvidt, M. (2007). Public – private ties and their contribution to development: The case of Dubai. Middle Eastern Studies, Volume 43, Issue 4, pages 557 – 577. Noack, S. (2007). Doing Business in Dubai and the United Arab Emirates. GRIN Verlag. Oxford Business Group. (2010). The Report: Abu Dhabi 2009. Oxford Business Group. Read More