Management characteristics and organisation context in Saudi Arabia

516 Pages·2017·19.73 MB·English

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Management characteristics
and organisation context in
Saudi Arabia
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• A Doctoral Thesis. Submitted in partial fulfillment of the requirements
for the award of Doctor of Philosophy of Loughborough University.
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MANAGEMENT CHARACTERISTICS
AND ORGANISATION CONTEXT
IN SAUDI ARABIA
by
Abdulaziz M. Malaika
A Doctoral Thesis
Submitted in partial fulfillment of the requirements
for the award of
Doctor of Philosophy - Ph.D.
of the Loughborough University of Technology
February 1993
Abdulaziz M. Malaika
ABSTRACT
The purpose of this research was to compare the
characteristics of both Western and Saudi senior management
in Saudi Arabian business organisations.
The author investigated management characteristics,
and the differences between Saudi and Western managers in
their styles and management practices. In addition, he
investigated the underlying causes of ineffective manage-
ment and ineffective organisational context and systems in
Saudi Arabia.
Some sources have claimed that Saudi managers are
ineffective in their management styles. Yet no effort was
made by these sources to compare Saudi and non-Saudi
managers. In addition, no study has been made to compare
non-government and government business corporations. Also,
little has been said elsewhere regarding the social and
organisational environments and their effects/impacts on
both management and corporations. The present study has
attempted to do this. Difficulties in developing management
and organisation have arisen because of Saudi Arabia's
rapid development from a traditional society towards
industrialisation and modernisation.
Field research was conducted in several cities of
Saudi Arabia from June 1989 to August 1991. Methods of
eliciting data included questionnaires and interviews.
Data-processing was done by Loughborough University of
Technology computer centre. The author found that most
Saudi managers lack effective skills and relevant knowl-
edge. They were autocratic, exhibiting an authoritarian
style for their personal interests, yet demonstrating
people-concern for keeping subordinates happy. By contrast
Western managers were high short term task-oriented, with
low people-concern, but were strongly influenced by the
Saudi Arabian environment. Recommendations for change or
improvement may be topics worthy for further study.
PREFACE
Saudi Arabia is undergoing intensive development
towards modernisation. Part of this is the international-
isation of the Saudi economy. Saudi Arabia has become an
open country for investment by international companies. In
addition, there are many joint-venture corporations from
all over the industrial world, i.e., Japan, USA., UK., and
several other European countries. Both Saudi and Western
executives and their corporations have a major role in
Saudi business progress.
Since 1982 the author of this research has been
involved in the training and development of Saudi managers,
supervisors, and manpower potential. His first experience
in this field between 1980 and 1984 was with a large
organisation, Saudi Arabian Airlines. Since 1984 he has
also been with another large organisation, International
Airports Projects. Prior to these training and development
experiences, he worked for three years as a project manag-
er. He has conducted training courses for management and
supervision. Furthermore, he has had several international
training courses in management, and organisation develop-
ment, and he had training in instructional skills. Also, he
has become a fellow and member of several international
training and management institutes. He had several training
courses in developing questionnaires, conducting inter-
views, and in data analysis. These experiences plus his
formal education, his MBA, publication of two books on
management development (Leadership Basic Skills, and Time
Management in Saudi Arabia; both in Arabic), and over 60
relevant articles in a well known national newspaper (OKAZ)
have contributed in this research.
Through his management training study and experience,
the author found that there is a great need to understand
the impact of Saudi management characteristics and style(s)
on both their non-Saudi counterparts and on their organisa-
tion's objectives and systems. In addition, there is a
great need to understand the Saudi Arabian cultural and
social value system as it impacts on the organisational
context and on management practice.
The author chose Western senior managers as a compari-
son sample because they may be thought to represent a
ii
better or more effective contribution to the management
task. This results from their advanced management knowledge
and skills, and from their home background from modern and
high technology societies. In addition, they are the
largest non-Saudi sample available at senior management
levels in most of the large Saudi business corporations.
The sample surveyed consisted mainly of senior manag-
ers, executives, and top officials because of their leader-
ship role. Leadership, of course, is seen as an essential
element in corporate success or failure.
Without understanding the destructive Saudi Arabian
business environment any management development programmes
will not be effective. This is particularly important if
these programmes are based on Western techniques and
ideology. In addition, Western managers in Saudi Arabia,
and also all other non-Arabs, may not be effective if they
try to apply Western techniques or practices without
suitable adaptation.
This research, therefore, is intended to describe the
characteristics of both Saudi and Western managers in Saudi
corporations, and to make a comparative analysis. It is
also intended to describe the effect of the local industri-
al and business corporation's context and systems, on those
managers. Furthermore, it explains the Saudi societal
impact on both management and organisations.
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TABLE OF CONTENTS
Page
Chapter
List of Tables ix
List of Figures xii
Acknowledgement xiii

I. 1
INTRODUCTION: RESEARCH ISSUES AND PARAMETERS . 2
A- FRAMEWORK OF THE RESEARCH 2
1. Purpose 2
2. The Areas Covered by this Study 4
3. Reasons for Comparing Western and Saudi
Managers 4
B- RESEARCH PARAMETERS METHODOLOGY 6
1. Areas of Analysis 6
2. Research Methodology and Hypotheses . 9
3. Development of the Questionnaire and
Data Gathering 11
4. Analytic Procedure 14
5. Data Collection and Limitations 15
C- MANAGEMENT/LEADERSHIP and THE RELATED TERMS 16
1. Leadership Definition 16
2. Management Definition 19
3. A Comparison Between Leadership
and Management 20
4. Distinction Between Leadership
and Management 20
5. Management Functions, Skills,
and Activities 21
29
FEATURES OF SAUDI ARABIA 30
A- GEOGRAPHICAL 30
1. Location 30
2. Water 34
3. Temperature 35
4. Agriculture 35
5. Mineral and Petroleum Resources 36
6. Urban Development 36
7. Population 41
8. Workforce 43
iv
B- THE POLITICAL SYSTEM OF SAUDI ARABIA . . . . 53
1. Political Organisation 54
2. The Royal Family of Saud 56
C- THE SOURCE OF VALUES IN SAUDI ARABIA 65
1. Islamic Religion 66
2. Social Values and Saudi Society
Structure and Tradition as the
Second Source of the Value System . . . 73
3. Family and Kinship Systems and Values. . 81
4. Saudi Arabian Culture and Value
System, Effects on Management 87
SUMMARY 96
98
BUSINESS AND DEVELOPMENT IN SAUDI ARABIA . . . 99
DEVELOPMENT GOALS 99
1. The Development Strategy of
the Government 99
2. Development Plans of Saudi Arabia 100
3. Investment Credit by Government
Sponsored Financial Institutions . . . . 115
4. Money Supply and Banking 118
5. Saudi Economic Development 120
6. Merchandise Trade in Saudi Arabia. . . 136
7. The Non-oil and the Private
Business Development 139
8. Other Aspects of Saudi Arabian
Development 142
9. The New Plan (1990/95) 154
10. Business Development in Saudi
Arabia and Some Obstacles 156
SUMMARY 174
IV. 176
REVIEW OF LITERATURE 177
I. MANAGEMENT CHARACTERISTICS AND
ORGANISATIONAL CONTEXT BEFORE 1971 178
A- MANAGEMENT CHARACTERISTICS IN
THE PUBLIC SECTOR 178
B- ORGANISATION CHARACTERISTICS AND
CONTEXT BEFORE 1971 181
1. Cultural Environment: Impact on
Government Organisation 181
2. The Impact of Cultural Environment
on Government Employees'
Behaviour 184
II. MANAGEMENT CHARACTERISTICS AND
ORGANISATION CONTEXT SINCE 1971 186
A- MANAGEMENT CHARACTERISTICS SINCE 1971 . 187
1. Management Characteristics in the
Government Sector Since 1971. . . . 187
2. Management Characteristics in the
Private Sector Since 1971 192
B- THE CHARACTERISTICS OF GOVERNMENT
ORGANISATION, CONTEXT AND THE IMPACT
OF SOCIETY, SINCE 1971 195
1. Major Studies 195
2. Organisation Characteristics in
the Private Sector Since 1971 . . . 199
C- AN OVERVIEW OF HOW SAUDI CULTURE
AFFECTS SAUDI MANAGEMENT vs. WESTERN
MANAGEMENT PRACTICES AND PHILOSOPHY . . . 206
D- A NOTE ON THE COMPARATIVE MANAGEMENT
LITERATURE 208
SUMMARY 212
V 215
FINDINGS RELATED TO MANAGEMENT CHARACTERISTICS 216
A- FORMALITY AND INFORMALITY 217
1. The Use of Formality 217
2. The Use of Informality 226
B- DECISION MAKING 231
C- DELEGATION 238
D- COOPERATION AND CONFLICT 243
E- CONFRONTATION AND CRITICISM 250
F- MANAGEMENT OBSOLESCENCE 257
G- SOME CHARACTERISTICS OF BOTH WESTERN
AND SAUDI MANAGERS AS VIEWED BY THE
PARTICIPANTS 260
1. Westerners 260
2. Saudis 265
H- NEEDS FOR IMPROVEMENT AMONG SAUDI
MANAGEMENT 268
SUMMARY 271
vi
•▪•
▪

VI.
275
FINDINGS RELATED TO THE ORGANISATIONAL CONTEXT 276
A- THE MISSION STATEMENT, OBJECTIVES AND GOALS 278
B- PLANNING 284
C- STANDARDS OF PERFORMANCE 287
D- POLICY, STRUCTURE, POWER, AND AUTHORITY
AND RESPONSIBILITY 289
1. Policy 289
2. Structure, Power and Authority 292
E- THE COMPATIBILITY' OF ORGANISATIONAL
BOUNDARIES AND FUNCTIONS 297
1. Organisational Boundaries 298
2. Interdepartmental Functions
Compatibility 304
F- THE BUDGETING SYSTEM 305
G- EMPLOYEE RECRUITMENT, PROMOTION, REWARDS,
TRAINING SYSTEMS, AND SATISFACTION 310
H- PUNCTUALITY AND DISCIPLINE 322
I- ORGANISATIONAL COMMUNICATION SYSTEMS . . . 325
SUMMARY 330
VII 332
FINDINGS RELATED TO SOCIETAL EFFECTS,
AND INTERVIEWS 333
I- EFFECTS OF THE ENVIRONMENT ON SAUDI
ORGANISATIONS 333
A. THE ORGANISATIONAL CULTURE AND VALUES. 334
B. THE EFFECTS OF SOCIAL RELATIONSHIP ON
PERSONNEL AND ORGANISATIONS 342
C. EFFECTS OF SAUDI CULTURE ON BUSINESS . 347
D. FEATURES OF THE SAUDI ENVIRONMENT THAT
COULD ENHANCE BUSINESS 352
E. SAUDI ARABIAN EDUCATIONAL SYSTEM . . . 354
II. INTERVIEWS 355
1. Saudis from Government Organisations . 355
2. Saudis from semi-Government
Organisations 366
3. Saudis from Private and Share-Holding
Corporations 371
4. Westerners from Government
Organisations 379
5. Westerners from Semi-Government . 381

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