The Oil Business in the United Arab Emirates - Case Study Example

Student Name Lecturer’s Name Course Name and Number Date Submitted EMIRATIZATION IN THE UAE Introduction The United Arab Emirates first ventured into the oil business in the late nineteen fifties at the Murban Bab Oil field. However, the oil discovery process started thirty years prior and subsequently, the field was producing a little over three thousand six hundred oil barrels every day, after the completion of the oil well. Three years after the establishment of Murban Bab, the Jebel Dhana terminal was constructed with initial exports leaving the port on the 14th of December 1963. Shortly afterwards, successive fields were discovered namely Bu Hasa, Sahil, Asab, Bida Al Qemzan, and Shah[Geo16]. Due to the numerous oil field discoveries, oil production revenues flourished hence prompting the late founder Sheikh Zayed bin Sultan Al Nahyan to inaugurate the Abu Dhabi National Oil Company widely known as ADNOC in 1971[ADN09]. The government-owned syndicate mainly focused on the supply and marketing of petroleum goods in the United Arab Emirates consequently creating compound employment prospects and generating a key factor for the UAE economy determinant. In 1973, the president of the company issued a High Decree hence incorporating ADNOC for a petroleum distribution status. The syndicate is operated under a CEO, and he is supported by an Executive Leadership Team (ELT) consisting of various Senior Vice Presidents from the numerous corporate support services and Distribution Business Lines (DBL). The Vice President (VP) Strategic and Risk Management Division (SRMD), and VP Health, Safety, Security and Environment (HSSE) Division are also members of the Executive Leadership Team. The chief responsibility of the ELT is to guarantee an effective governance in relation to the corporate stance of the company. A regularly audited HSE Management System (HSEMS) ensures that all depots and service stations affiliated with ADNOC adhere to the company’s HSE standards so as to monitor compliance levels, and to maintain best practice measures within the global HSE field[ADN09]. Additionally, the ELT sets up the strategies of the company in line with the corporate expectations through committees and meetings. Good governance requires the leaders of a company to have an enduring observant attitude to safeguard accountability. Retaining workers in the UAE has always been a challenge due to various factors hence the term Emiratization. One proliferating issue arising from the issue is culture since retentive workers are always hard to find[Cha11]. In accordance with the Emiratization requirements, ADNOC encourages employees to take part in annual project achievement settings with relation to sustainability by means of an award program known as the Internal Health, Safety and Environment (HSE) program. The corporation has a stringent code of practice to warrant an integrated framework of operational standards called HSE Management System (HSEMS) serving as a self-assessment protocol for all Emirati and foreign employees[ADN09]. Purpose of the study The resolution behind this correlational report is to determine the employment challenges relating to Emirati nationals, specifically the people residing in the United Arab Emirates, hence the term Emiratization. The significance of the affiliation is that it may form an understanding of why employees in the UAE are difficult to retain and tough to motivate; some of which have been correlated to family pressures, lack of encouragement and support, competition and confidence issues, cultural and management differences, lack of teamwork, unrealistic expectations, and lack of career progression. The objective is to enable the recruitment of high prospective natives for leadership and managerial positions as well as other positions so as to equip employees with hi-tech coaching, training, and mentoring interventions that award appropriate contributions towards the achievement and performance of individual and the organization requirements. Description of key terms Self-determination theory (SDT) – A motivational theory focusing on an individual’s essential attributes. ADIPEC - Abu Dhabi International Petroleum Energy Conference is a global platform for networking professionals in the gas and oil industry. ABSHER – A government information portal under the ministry of interior. HSEMS - Health Safety Environment Management system is the rules, procedures and by-laws instituted by the HR to ensure employee competence. HSE - Health Safety Environment denotes the term used to describe procedures, rules, and by-laws used to protect the community from detriments. HRD - Human Resource Development are outlines stipulated for employees towards the development of knowledge and skills. Wasta - Wasta in an occupation route, occurs when prospective employee candidates know individuals who interfere using their societal capacity or influence in the nation to hire an individual. Research Background Middle Eastern countries are often observed as having economies with partial competitiveness on a worldwide setting due to occurrences facing the country on matters relating to the environment, the economy, politics, and mostly societal trials. For instance, authentic Islam perspectives state that as individuals, women are endowed as the male counterparts, are worthy of respect and dignity, are servants of God with their particular talents as they are independent beings, hence, females should hold the fundamental right to exercise any capacities in any area of social engagements[Nad16]. However, Islam has for a long time plagued women’s standings since traditions and social attitudes have always come across as hard and slow to change. The UAE also undergoes multiple challenges with present and imminent demographics posing a major threat[Paw16]. In the recent history the rise of Islam in the Southern region of Arabia led to unity amongst ethnic leaders hence defeating the latter norm of culture especially in the work place. As a result, employment opportunities have shifted to include all genders irrespective of any physical or mental challenges. Growing amounts of literature relating to Emiratisation as a national policy in the UAE indicate that the process has been less successful in the private sector as most Emirati nationals prefer government work scheme environments as compared to private settings[Paw16]. Therefore, unsatisfactory employment opportunities in the private sector are on a high margin. With consideration of direct foreign investment volumes in the UAE, manpower requirements that are managed by non-Emirati consortiums seam non-Emirati socially and culturally. Meaning, the jobs created favour foreign labour and contrary to the sought after the outcome of enticing foreign investments, extraordinary international business involvements are consequently low with lower Emirati employees in the private sector raising concerns[Rac16]. In addition, strong indications suggest that locals do not respond well to some government initiatives like the job placements offered by the Ministry of labour database. In the context of Human Resource Development (HRD), the distinctions that draw the line between anticipated and unattractive goals that seem to relate to job motivational features such as profession rewards, and the prospects seeking to explore the trials defying Emiratization are the features discouraging locals from the job market[Rob13]. All the same, the UAE government has undertaken genuine advances to positively defy the challenges. The president Sheikh Kalifa bin Zayed Al Nahyan recognizes that prior to, and subsequently after the discovery of oil in the UAE, the actual fortune of the state is predominantly attached to the human capital aspect, and he often stresses the urgency to magnify the Emirati involvement in the labour market [Rob13]. Contemporary developments aimed at boosting Emirati numbers in the workforce include training programs, housing programs, and a political model that targets the preservation of the Emirati national identity and the national principles. The program uses a philosophy that satisfies the basic economic, psychological, and social needs, with the inclusion of comfortable lifestyles for all Emiratis[SKS16]. Emiratization Emiratization represents the initiative of the UAE government in trying to employ UAE citizens with respect to efficient and meaningful aspects in both the private and public sectors. Therefore, Emiratization denotes a multi-level progression by which reliance on expatriate labour force is condensed, and UAE nationals set up to take works formerly executed by expatriates. The UAE government places Emiratization as a key priority to develop sustainable employment opportunities for the UAE nationals. In order to promote the employment of UAE nationals, the government named 2013 as the year for Emiratization as it is of major importance in all Gulf Cooperation Council (GCC) states depending on expatriate labour workforce[Nat14]. The main challenge facing the government is how to engage the national human resource (HR) in employment and education while respecting Islamic and Arab traditions whilst keeping up with other advanced nations. Nationalization of the dominant expatriate workforce has been prioritized by the government through human resource development plans as seen in all levels of the education sector. As a result, a large number of UAE nationals have crossed the threshold of the labour market borders[Rob13]. As an added measure government institutions such as the Employment Authority TANMIA, and the National Human Resource Development aid in emphasizing the implementation and formulation of development programs and initiatives. TANMIA works as a federal institution that aids in the deployment of UAE nationals. The institution acts as a job placement database, offering career advice and training facilities. Consequently, an increase in women participation in the employment sector is ongoing successfully, specifically, the service segment[Nad16]. With substantial numbers of dominance in the education sector, further career diversifications are expected in the future for more advanced leadership positions in other sectors as the government area is getting more crowded. Low Emiratization The reasons governing low Emiratization levels rely on various variables based on a general survey conducted by the government. For instance, UAE nationals avoid partaking in the workforce due to lack of motivation, lack of interpersonal skills, lack of experience, insufficient knowledge of English, and lack of trust specifically wasta or nepotism in the workplace. In contrast, the perceived reasons why a little percentage of nationals are in the workforce have been attributed to resistance by expatriates to pass on knowledge, working split shifts, family resistance, long working hours, low wage benefits, and minimum opportunities for promotions and training. Overall, a comparison of the full picture clearly places training, the English language, low wages, lack of experience, qualification, lengthy work hours and tiny prospect for advancement as the primal reasons for truncated Emiratization levels in the labour force[Rob13]. Description of the study Abu Dhabi National Oil Company (ADNOC) Employee Diversity All organizations have different variations of human resource guidelines and measures for the viable competitive lead. ADNOC considers that all employees are important, and all contribute a great amount to the prosperity of the company. The company appreciates all talents irrespective of gender, age, and race hence qualifications and capabilities help in enriching potentials as both suppliers and employees. Therefore, ADNOC has strived to include all genders and race especially the UAE nationals. According to the company, in 2015, the nationality distribution at ADNOC stood at 86% for Emiratis and 14% for the expatriate workers. On the other hand, the age distribution was well balanced with the majority aged 30 years at fifty seven percent, second group at thirty nine percent lie between 30-50 years, while the least percentage belonged to people over 50 years old. Emirati involvement In order to convince Emirati nationals to enter into the UAE labour force, a nation-wide strategy called ABSHER was implemented. The strategy commenced in 2012 with the agenda of amassing more nationals to work in both private and government-owned companies. His Highness Sheikh Khalifa bin Zayed Al Nahyan established the policy so as to help Emiratis live a decent life under proper career prospects. In reaction to this edge, ADNOC Distribution vowed to hire many natives in its numerous facilities. For instance, in 2014, the company expected to hire at least three hundred and ninety recruits. However, the number exceeded anticipations when 472 recruits were attained instead, and over one hundred of the new recruits comprised of ladies. Giving back to the community ADNOC plays active roles in trying to blend with the Emirati nationals through social schemes involving education, sports, and culture as the company uniquely depends on the wellness and contentment of the surrounding community. The social schemes fall under three major categories mainly Environmental Awareness Sessions, Corporate Social Responsibility Initiatives (CSR), and Health Society Programs. The Environmental Awareness Sessions mostly aim at convincing the community of the environmental benefits associated with novice products in the market for improvements to public health. ADNOC has a major influence on the UAEs environment, society, and the economy, hence the need to safeguard a sense of balance between the existing energy resources and the community’s well-being. Corporate Social Responsibility Initiatives, therefore, practices various mandates to give back to the community. For example, ADNOC employees take part in workshops to create awareness on any ongoing community development initiatives like cancer awareness programs. The Healthy Society Programs concentrates on good service delivery and good product usage. The corporate social responsibilities aim at enticing Emiratis to take part in the UAE labour force thus obliging to the Emiratization call by the government. Emiratization Achievements After the signing of ADNOCs 2009 sustainable charter, the company’s various corporate branches adopted various principles to achieve progress across all business fronts. Private trades such as ADNOC have adopted skilful Emiratization quotas and applied programs intended to develop skills for Emiratis so as to motivate native employees. For instance, employee diversity has been achieved with no prejudice, training programs that entice more natives known as entry points are in place offering technical knowledge, especially in the drilling segment of ADNOC. Despite having no females at the executive and senior management levels, ADCO has achieved awards like ADIPEC for empowering Emirati females to work in the oil and gas industry. The company supplies for all female needs including females with babies hence the inclusion of child nurseries on premises. ADNOC has a very competitive commitment relating to benefit plans such as annual leave, disability coverage, sick leaves, life insurance, maternity leaves, and even Hajj travels so as to attain more nationals in the highly competitive private sector. Additionally, ADNOC contributes to the pension benefits of all UAE Nationals through the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF). Furthermore, housing and lifestyle provisions for all UAE nationals are in place through stipends or direct provisions so as to enable a comfortable life, especially for remote location workers. The ADNOC HR policy has an embedded employee grievance program that permits all employees to air any grievances privately thus ensuring unprejudiced and fair approaches in any dispute. Emiratization strengths and weaknesses Strengths a. The education sector has undergone immense transformations thus taking knowledge and skill development of the Emiratis to a higher level at par with international standards. b. Emiratization has resulted in minimal marriages hence the female population can now concentrate on personal developments rather than family life. c. ADNOC has enabled the female workforce to work in all areas while ensuring the safety and well-being of infants belonging to working mothers. d. ADNOC has enabled more employment opportunities for Emiratis by employing Emirati nationals as Human Resource personnel. e. Emiratization has led to increase and development in tourism. Weaknesses a. The Emiratization process is a long-term initiative thus the outcomes of the process are also long-term in nature. b. In the cultural aspect, Emiratization has led to a decline in the early Arabic marriages that have been a hindrance to female professionalism and education. c. Emiratization has significantly changed the view on marriage hence more females are currently classified under the singles category, a norm that was not permitted initially. d. ADNOC is still not clear on its stance on the Wasta menace. Emiratization viability The practicality associated with Emiratization majorly relies on personal factors like education, job experiences, and skills acquired. The Emirati population is capable of achieving the nationalism strategy if an emphasis on education is implemented[Geo16]. Additionally, the workforce should be conversant with the aspects of human resource strategies relating to all organizational factors. ADNOC has achieved a great percentage of Emiratization in the work personnel thus proving that Emiratization is applicable in the real-world prevailing after working hours. A major factor that has contributed to the viability of Emiratization is the Emiratization of job professions[Paw16]. In the year 2005, the UAE issued a directive for banking and insurance sectors to hire only Emiratis as branch managers. As a result, the following year experienced an increase in Emirati employee numbers. Therefore, Emiratization has proved to be feasible across most job platforms. Findings The most substantial impediments to Emiratization in the labour force are related to the unavailability of career development prospects, experience, education and skills, low wage, little opportunity for training and promotion, lack of English language, and lack of trust in the capacity of UAE nationals to efficiently complete their work. However, other hindrances in existence such as nepotism, insufficiency of a work-culture, work attitude and gender related issues, are also important factors when trying to increase the contribution of UAE nationals into the national workforce. In addition, Emiratis often incline toward white collar jobs as opposed to blue collar jobs because they associate the latter to the low-class spectrum and as manual labour jobs. Recommendations 1 Labor regulations, as well as production methods for instance in the case of ADNOC, should be modernized so as to appeal more to the UAE population, and as a result, create more and even better employment opportunities. 2 The private sector work ethics and salaries are high as compared to the public sector counterparts thus a bridge between the gaps would escalate Emiratization. 3 In order to fulfil manpower forecasting’s that aid in the completion of organizational structural requirements, organizations should have long term plans as well as short term plans to help in transfers, succession plans, promotions and career development goals, especially for UAE nationals. 4 All companies must recruit UAE or Emirati nationals as human resource managers since such a move will ensure that the personnel first considered for any job recruitment are going to be of Emirati or UAE origin. 5 In the government’s case, they should continue monitoring and regulating the Emiratization process, mainly within the private industries such as ADNOC, to be in line within the fulfilment of all company investor interests. 6 In order to tackle the language barrier menace, the government should ensure that the English language taught in all educational levels measures up to international market standards. 7 The UAE government should help in abolishing the problem of Wasta by all companies as a means of recruitment through the creation of institutions that will majorly consider young UAE nationals irrespective of any prior considerations. 8 Promotion of new and flexible organizations plus new management styles supplementing the UAE women labour market by the government should be put in place as they help increase economic globalization and competition in all sectors with more emphasis on flexible, cooperative, and holistic, attitudes. 9 In order to solve the Emiratization problems swiftly, mass media communication and public awareness should be employed to explain to the population the urgency and need of tackling the issue fast since a large number are unaware of the issue. 10 There is great need to encourage more women to enter the workforce through equal job opportunities, and affirmative action. The government should utilize the media as a promotion strategy for promoting the roles of working women, especially the training, growth, and elevation of Emirati women to higher management positions. Summary GCC member states with the inclusion of UAE are mainly dependent on the expatriate workforce, and as a result, local nationals in the labour force are quite a few[Nat14]. Therefore, a nationalization policy, Emiratization, was introduced in order to reduce the reliance on expatriate labour and to enable Emiratis to compete fairly with the other foreign workers. ADNOC represents one of the government syndicates that has taken up an immense role of trying to achieve nationalization targets set up by the government. ADNOC has managed to employ more Emiratis into the UAE labour force by enticing all genders with good salaries and good working environments. Education has also taken centre stage in that training programs have been established to deal with knowledge management[ADN09]. Conclusion The UAE has relished in pragmatic civic policy frameworks, and political loyalty under the leadership of the late founding father, Sheikh Zayed bin Sultan Al-Nahyan and the economic growth has been remarkable[Rac16]. The main achievement has always been cosmopolitanism, or social change and the UAE has been achieving modernization based on peace and intercultural understandings[SKS16]. The rapid pace of modernization has however caused challenges, and the government developed policies to help tackle the issues[Nat14]. Emiratization denotes one of the challenges that have surfaced due to the geographical location of UAE. The location of UAE together with the international oil production trade resulted in high migration levels into the UAE in search of job opportunities. With migrants to citizen ratio taking over eighty percent of the population, the UAE workforce suffers from a serious need to employ more natives[Pat17]. Companies such as ADNOC have tried bridging the huge gap and are doing a great job. The company has also taken centre stage in promoting better education programs since Emiratization has been attributed to insufficient knowledge and skills within the national population. The government has also taken centre stage in trying to reduce more expatriate workforce than indigenous public. In short, slow and steady transformations relating to modernization are already underway, and the implications are already in view[SKS16]. The Emirati workforce is on the rise, and the future of Emiratization is looking good. References Geo16: , (Daleure), ADN09: , (ADNOC, ADNOC Sustainability Report), Cha11: , (Charlie Karlsson), Nad16: , (Nadereh Chamlou), Paw16: , (Pawan S. Budhwar), Rac16: , (Rachid Benlamri), Rob13: , (Roberta Gatti), Rob13: , (Roberta Gatti), SKS16: , (Stevens), Nat14: , (Ridge), Pat17: , (Patricia Short), Read More