HRM in Oman

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Introduction

HRM or human asset is a significant resource for any organization to function effectively to maximize benefit. HRM is progressively getting to be critical with the evolving financial, demographic, budgetary and political scenarios, which are always showing signs of change (Deadrick and Gibson, 2009). There are two key ideas, which have been derived from HRM to be specific, (SHRM) strategic human resource management and (IHRM) international human resource management. SHRM constitutes of the HR practices overall strategic directions of the organization to enhance the competitive advantage of the firm. Similarly IHRM is just as critical because of globalization, it influence each part of the business from monetary, social, political, cultural, technological and legal perspectives (Wright and Snell, 1991).

Convergence theory:

It is a theory by (Kerr et al. 1960) that the methodology of industrialization moves all the nations towards the same political and economical framework as other nations. Everybody in his or her HRM policies could apply the methodology of 'universal truth’. These perspectives were seen as best fit in the late 1960s, they have been debates over time as they over-simplified the methodology and chiefly concentrate just on the industrial improvement. Convergence ideology is true in many perspectives; the Japanese management theory spread crosswise over countries regardless of geographical locations and most as of recently the idea of 'lean production'. Benchmarking is another ideas, which are adopted by majorly the majority of the organizations globally. The above infers that the organizations converge around these ideology or they would be at a competitive disadvantage. These practices are not constrained at a firm level however worldwide and are readily transferred.

Analysis of national effects:

A ton of research is in progress to examine the applicability of various theoretical HRM models, which apply globally. Each one model has been addressed on its universal acceptability. A large number of the organizations are in a dilemma, which is the best-fit HR practice or methodology for their firm to succeed. (Boxall & Purcell, 2000) The best-fit methodology is focused around general perspectives and articulations, in the matter of how the HR practices ought to be alongside the adoption of local and cultural difference to the organizations success. The best fit or the internationally accepted models are built exceptionally with respect to American views and beliefs. (Klenert & Manfredi, 20017). Disregarding the socio-cultural, organizational goals and objectives of Omani Firms.

Oman is a part of a GCC (Gulf Cooperation Council), (Saudi Arabia, UAE, Kuwait, Bahrain, Qatar and Oman) country. Majority share of the GCC nations particularly Oman has different factors, which are different compared with those of US and other developed countries. As per (Pudelko, 2006) there is a wide socio-economic contextual factor difference between countries. He looked at HRM practices of USA, Japan and Germany. In his study he presumes that USA and Japan practices are very different from that of Germany. Thus it is very difficult or too impossible to standardize the management process in culturally diverse nations. These elements restrict the MNCs to efficiently standardize their HR practices. Enormous cultural and institutional difficulty in various countries is the prime limitations for convergence. Taking a close look at the models it is extremely clear that the American model is exceptionally dominating while then again Japanese model is defensive and German model is focused around continuous change in the process.

Taking a gander at all the variables it is sure that it is difficult to say which model of HRM will be best for Omani firms and beat all the provincial and socio-logical components. Therefore not union or unadulterated dissimilarity is the answer for the issue. Pudelko (2006) contends that there requirements to be a center way in the middle of merging and uniqueness as opposed to looking at the two posts.

HRM model for national level of Oman:

With a populace of 3.92 million (Ministry of National Economy, 2014) Oman is the third biggest nation in Arabia commercially exporting oil since to 1967. Gross domestic product (GDP) of the nation fundamentally depends on the export of oil. Omani firms depend vigorously on workforce from different nations, which constitutes very nearly 54% of the workforce in the nation. The majority of which are on a short-term contract enduring a year or two max. Thus it becomes hard for the organizations to attain that employee commitment which is required for overall development of the firm. In a study by (Al-Rajhi et al. 2006) agrees that the HR framework in Oman plays a crucial part in cultural and work adjustments of these contract workers to enhance their productivity and well being. To cut down reliability on foreign workforce Oman has received an Omanization arrangement under which organizations can just utilize Omani individuals. This can differ from sector to sector. This administration activity meets expectations extremely well for the Omani individuals however not for the companies, as they limit the skills, which can be acquired for having a competitive advantage.

It is without the doubt known that socio-contextual elements are essential for Middle Eastern nations. As per (Abed, 2003) Dominating Public division, slow political reforms, underdeveloped financial market, inappropriate exchange rate and high trade limitations are the significant five reasons recognized which back off the financial advancement among different reasons. (Looney, 2003) alternate reasons incorporate high unemployment, less contribution into worldwide economy, absence of privatization arrangements and high reliance on oil. There is likewise an uncertain political environment in the nation and weak corporate culture. (Talib 1996; Abed, 2003). Middle Eastern nations have been making a conscious attempt to move towards privatization mainly Oman among them. Oman changed its work laws meeting the worldwide rules and signed FTA with USA in 2006. These are little steps Oman is taking to move towards global acceptance.

A lot has been debated and argued about management theories and organization environment for the Arab region; Arab environment is distinct and needs special attention. (Ali, 1995) feels that due importance needs to be given to Arab culture to develop any management theories. Talking about national culture (Anwar, 2003) brings to perspective that there is a wide difference in the culture of USA and Oman. American companies adopt and change their management and HR policies to suit the cultural demand of Oman. In numerous other research studies it is discovered that to be successful in Oman organizations need to comprehend and consider the culture and political issues of this nation. The nation has a remarkable effect of Islamic principles, Islamic standards of administration and Islamic work ethics on human resource administration. (Budhwar and Mellahi, 2006) In Oman Islamic elements are fundamentally consolidated in the HRM model. Such values are not constrained to organizational level; the government considers religious impacts when making new policies besides other factors, for example, culture, economic conditions, political ideology and legal system.

Global factors:

Worldwide or as known as global Human asset administration is an integration of management, which includes developing, employing, forming strategies, diverse culture, service and rewarding human assets in international organizations. It has operations in different nations dealing with subsidiaries and business expertise along with managing people. International organizations have their own particular set of administration and business style. With their own particular set of theories the managers can't disregard the international impact of their work, some of which are converging as well as diverging in a way. Because of these components administrators need to focus on elements, for example, diversity and globalizations in dealing with their workers. All these components help managers plan for changing global business environment.

Due to globalization managers are hiring people from distinctive contrasting backgrounds taking up with customers and stakeholders from diverged cultural orders and social backgrounds. It is crucially vital for organizations to employee people from different culture so that the customers can relate to them and affect the relationship in a constructive manner.

An impact of globalization on human assets management is the requirement for organizations to comprehend and apply the laws of a country to their specific business. The government sets out various tax and work laws that organizations working in Oman must follow; yet there may likewise be federal laws that apply to organizations that work in diverse states or distinctive nations. Selling items in Oman, for instance, may imply that an organization needs to force a Value-Added Tax differing from state to state on its merchandise. From this perspective Oman is diverging on the basis of VAT (Value added Tax).

Employing people at different locations might have to follow different regulations on the minimum wage permitted by law, tax remittances or working hours. Understanding these laws is crucial to the organizations in light of the fact that any breach of regulations will have a severe effect not just on the business' finance but additionally on its reputation.

Trade Unions:

As per Ministerial Decision 570 of 2012 propagating the formation, implementation and registration of trade associations, labor unions and common federation of Oman labor unions (the “2012 MD”) a labor union can be shaped by any private company with the employee strength of 25 or more and, once listed, has a self-regulating legal identity. Notwithstanding having no less than 25 members, a trade union is qualified for enlistment after having other documents stated in Article 5 of the 2012 MD.

Form a convergent perspective Oman and many other countries have the similar concept of trade unions. By the look of it we can say that it is converging. On the contradictory Oman is diverging in this context as they have a minimum requirement of 25 people to form a trade union while other countries have their own minimum requirement and pre-requisite differing from that of Oman’s’ laws and regulation.

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