Saudization (Localization) – A critical review

Abstract

This paper introduces the concept of Saudization and critically reviews its existing and potential impacts and consequences. It identifies that Saudization has positively contributed to reducing the overall percentage of foreign labor. However, there have been some difficulties, such as a decline in competitiveness among regional business companies with respect to a business friendly environment, and reduced direct foreign investment, which influenced the reduction of the tax on foreign investors. Saudization should place importance on skill development among Saudi nationals by strengthening educational and vocational training, and providing time-specific incentives, rather than relying only on a quota system. Saudization should be implemented more through market forces and incentives. Collecting comprehensive information on the nature and magnitude of Saudi unemployment could be a first step in developing appropriate Saudization policies. This paper suggests appropriate coordination and consultation between the government, the private sector and the public at large, so that any policies on Saudization become more easily acceptable and executable in both the public and private sector.     

Build–operate–transfer (BOT): an emerging entry mode for service offshoring

Build–operate–transfer (BOT) is a well-established solution used in the engineering and construction industries for building different types of infrastructure (e.g. railways, highways, power plants). In recent years, BOT has increasingly been adopted by companies in the service industry as a mode for entering foreign markets. BOT in service offshoring (SO) is characterised by a number of significant peculiarities (e.g. different numbers of involved parties, fee methods, lengths of the concession period), which may call into question the possibility of extending existing findings that relate to infrastructure projects. The aims of this work are as follows: to collect and systematise existing knowledge on engineering and construction BOT projects; to highlight – through an exploratory case study – how these results could be applied to BOT in SO; and to shed light on the factors affecting the choice between different entry modes (including BOT).     

Beyond leader–member exchange (LMX) differentiation: An indigenous approach to leader–member relationship differentiation

The existing literature has established that leaders differentiate among their followers; however, the focus has long been on the Western leader–member exchange (LMX) theory. This paper examines leader–member relationship differentiation from an indigenous, leader–member guanxi (LMG) perspective. Using a sample of 60 groups and 228 employees, we examined the dual effects of LMG differentiation on employee job satisfaction, organizational commitment, turnover intention, and co-worker helping behavior after controlling for LMX, LMX median, and LMX differentiation. The results of this study supported the proposed dual effects of LMG differentiation, demonstrating that LMG differentiation, in general, is detrimental to employees' work attitudes and their intentions to stay in an organization. On the contrary, interestingly enough, LMG differentiation can accentuate the positive relationship between LMG and job satisfaction, organizational commitment, and co-worker helping behaviors.