The impact of Saudi Arabia’s societal culture on human resource management practices within the public and private sectors: the case of Saudi Arabian airlines

Abstract

Culture plays an integral role in shaping Human Resource Management (HRM) practices and policies within any organisation. This role is manifested through determining the norms and accepted behaviours in any given society. However, the extent of this societal cultural influence has been deemed to be greatly unexplored among researchers. Societal culture has been defined by Prasad and Babbar (2000) as the compilation of values and ideologies that are shared among an assembly of individuals in a certain country or region. Researchers have been concerned by the relationship between societal culture and HRM practices in developing countries; HRM practices are defined by Armstrong (2006) as all aspects associated with the management of people within the organisation. Therefore, this research represents an investigation of the link between Saudi Arabian societal culture and existing HRM practices within the public and private sectors. Taking into consideration elements affecting Saudi societal culture, such as changing economy and globalisation, these elements impact organisations in Saudi Arabia on two levels. First, the local level, where public organisations are gradually transforming into private organisations with a focus on profitability. Second, the global level, represented through multinational organisations adapting to societal culture elements in order to achieve success. As a result of both levels, HRM practices are changing in order to be effective. Therefore, the aim of this research is to explore this particular development and discover how Saudi societal culture impacts five specific HRM practices – highlighted following a comprehensive review of literature – and the role they play in shaping those practices. These practices are: job desirability, recruitment sources, performance appraisal, compensation and rewards, and training programmes. For the purposes of this research, a case study has been conducted in order to provide an in-depth examination. This benefits from a unique opportunity to investigate an ongoing privatisation process within a leading organisation in the Middle East. Saudi Arabian Airlines (SAA) represents an ideal candidate for this study, as the technical services section of the company, SAEI, is going through a privatisation process; this started in 2009 with expected completion in 2015. As the research data collection took place over seven weeks in 2013, this timeline allowed the examination of the transition from public to private sector within one organisation with the same workplace environment. Furthermore, having both sectors within the same organisation creates the possibility of making comparisons between them, as it would have been impossible to find two organisations from each sector possessing the same organisational structure, financial level and operational levels. Moreover, this study involved adopting a mixed-methods approach to incorporate qualitative and quantitative methods. This approach included semi-structured type interviews with eight senior HR managers as well as non-HR managers, and disseminating questionnaires among 200 engineers within the SAEI department. The findings and results of this case study have shown the extent to which each HRM practice interacts with Saudi societal culture. There have been HRM themes greatly influenced by the societal element, while other themes remained neutral and did not reflect any cultural influence. Furthermore, the findings produced mixed results when compared to those in the existing literature. As for the HRM practices affected by societal culture, three were affected based on the collected data: compensation and rewards, job desirability, and training programmes. These practices show clear indication they were influenced by Saudi Arabian societal culture. As for the HRM practices that remained neutral – performance appraisal and recruitment sources – they remained independent of any societal influence. However, after concluding the study and its discussion, this research provides several contributions to the field of HRM practices in Saudi Arabia on two main levels. On the theoretical level, the outcomes confirm a link between Saudi Arabian societal culture and compensation and rewards, training programmes, and job desirability practices. On the other hand, recruitment sources and performance appraisal practices are not greatly influenced. A further contribution is the up-to-date investigation of the impact that Saudi Arabian societal culture has on HRM practices, which helps to address well-known and documented gaps in the literature. As for practical contributions, one contribution is providing a first-hand review of the ongoing transition using primary and secondary research methods for SAA. This is 00considered beneficial for practitioners and multi-national corporations, as this study provides an action guide and insight into preferred HRM practices in Saudi Arabia. Further practical contribution is associated with the developed framework utilised in this research, where this particular framework can be used in the future to accommodate similar privatisation processes or make comparisons with international organisations.