GRM 2010 GRM 2011

Abstract Details

Family Name:
Al Nahyan
First Name:
Sheikha Shamma bint Sultan bin Khalifa
Title of Paper:
An Empirical Test of the Predictors of National-Expatriate Knowledge Transfer and the Development of Sustainable Human Capital
Paper Proposal Text :
Established in 1981 in Abu Dhabi, the Gulf Cooperation Council (GCC) is comprised of six Arab states: Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Qatar and Oman. Together, they are positioned on the world’s largest proven crude oil reserves (Crescent Petroleum Research, 2010) and play a vital role in meeting the energy needs of the world. Over the last two decades, countries in the Arabian Gulf have successfully attracted professional expatriate labor in contractual, contingent employment relationships to support the rapid development of their economies (Naithani & Jha, 2010). Investing their substantial oil rents in infrastructure, education and human capital development, these countries have successfully improved their economies and global competitiveness (World Bank, 2011).

However, against the backdrop of economic growth, today the governments of the GCC countries are seeking to reduce their dependency on expatriate labor by implementing workplace quotas for nationals in order to sustain their economies with a local workforce. Estimates vary, but over 40% of the GCC population is comprised of non-nationals ranging from 81% in the UAE to 30% in Saudi Arabia. In addition, the total number of expatriates is greatest in Saudi Arabia and the United Arab Emirates at 8.2 and 4.6 million, respectively.

This study tests a theoretical model that identifies the key factors underlying the success of workplace quotas for nationals to develop human capital and therefore, build the performance of a work force that creates a sustainable competitive advantage in the global arena. The premise of this paper is that localization is not successful when a national is hired into a position and an organization meets the strategic targets for nationalization. Nationalization is successful when the local workforce has the expertise and capability to first, sustain the organization and more importantly, lead the country’s economic development to meet their strategic goals. Therefore, sustainability is contingent on effective and efficient knowledge transfer between targeted nationals and expatriates who possess specialized expertise.

By drawing on scholarly contributions in the areas of strategic management, the resource-based view of the firm, strategic alliances, agency theory, knowledge management, and absorptive capacity, this paper consolidates extant knowledge and tests a framework aimed at assessing whether nationalization efforts have been successful. First, the national/non-national exchange of knowledge is predicted to be a function of both dyad members’ qualifications, motivation and receptivity. Whether leadership has established a transparent culture with high levels of trust will influence knowledge sharing. The human resource management infrastructure and incentives are hypothesized to play an important role in knowledge transfer and the development of employee competencies. These strategy enablers are hypothesized to predict knowledge transfer. The final two factors that are important to successful nationalization efforts have to do with whether knowledge transfer is linked to process improvement and the attainment of organizational goals. To this end, important key performance indicators must be identified with appropriate targets that are linked to nationals and non-nationals performance. Specifically, to achieve world class performance levels and the implementation of best practices, process improvements that are linked to meeting and exceeding customer expectations is required. These factors working in concert will result in developing the future generation of leadership that is capable of sustaining the economic growth and prosperity of the country.

This paper investigates the role of incentives for both nationals and expatriates in predicting knowledge sharing. Difficulties arise because nationals do not have an incentive to work in private organizations because expected lifetime income differentials between between public and private sector jobs are substantial. While incentives are being offered to employers to hire nationals, e.g., quotas and fines, it may be more appropriate to offer incentives for nationals to work in the private sector. Based on government-administered labor force surveys, this research will document the extent of the gap in compensation schemes, e.g., wages, pensions, health benefits, housing, education in several GCC countries. In general, approaches to reduce the gap for nationals are to (1) increase incentives in the private sector while (2) reducing incentives in the public sector. Incentives for expatriates are hypothesized to be more likely to include factors such as job security and more long-term employment contracts.

A survey has been developed with over 60 questions to measure the variables in the model. The surveys are being distributed by students at Zayed University in an Executive MBA class to over 25 companies in the UAE, Qatar and Saudi Arabia. The research project requires each student to collect between 10 and 30 surveys so the anticipated response rate will yield approximately 500 surveys. Data collection will be completed by March 14, 2015. Descriptive statistics and a correlation table will be provided as a preliminary analysis of the data. The hypotheses will be tested with an OLS regression analysis. Stepwise regression with standardized regression coefficients will be used to develop the final model so that the smallest number of independent variables that predict the majority of the variance in knowledge transfer and nationalization success are selected.

The GCC countries face challenges regarding the effective implementation of workforce quotas in a strategic initiative to build a competitively sustainable workforce. It is particularly important that workforce quotas are carefully managed to ensure that they contribute to developing an innovative, stable, prosperous and diversified economy. Leaders must create enabling environments to foster knowledge transfer and innovation. This paper adds to the understanding of emerging human resource practices in countries that utilize expatriate employees to build knowledge and competitive capabilities. Both recruitment of expatriate talent and subsequent managing expatriate and national performance to improve business results will generate competitive advantages for years to come. This article will contribute to understanding how policy makers and leaders can strengthen the transformative forces that will drive successful implementation of workforce quotas.