Does Strategic Human Resource Involvement and Devolvement Enhance Organisational Performance? Evidence from Jordan

Purpose – The purpose of this paper is to test empirically the relationship between the strategic involvement and the devolvement of human resource functions with organisational performance. Design/methodology/approach – This paper is based on the primary data collected from the population of financial firms based in Jordan. The methodology adopted for the purpose of data analysis includes the use of basic statistics, zero‐order correlations, confirmatory factor analysis and hierarchical regressions. Findings – The results provide strong support for the hypothesis that the involvement of human resource functions into the business and corporate strategy reduces employee turnover rate and enhances financial performance. The analysis does not support the second hypothesis that empowering day‐to‐day human resource functions to line managers impacts negatively on employee turnover and positively on financial performance. Practical implications – Our results imply that financial performance can be enhanced and employee turnover rate decreased by involving human resource directors in the overall strategic decision‐making process of companies. However, our results also imply that the devolvement of routine human resource issues to line managers is neither positively related to the financial performance of the companies nor negatively related to employee turnover. This raises doubts as to whether, after having involved human resource functions into the strategic affairs of the company, they are empowered enough to make a positive impact. Originality/value – This is one of few papers conducted on this topic in a non‐western environment, and the first of its kind for the country of Jordan. This paper contributes to the field through its approach to measuring and testing strategic human resource management theory. The paper also successfully links the core aspects of strategic human resource management with objective indicators of financial performance of the companies

Indigenization of Staffing in MNEs: The Case of Saudi Arabia

In the Gulf States, there has been increased emphasis on requiring MNEs to indigenize their staffing. Based on a survey of 157 HR directors in MNEs headquartered in Saudi Arabia, this article explores why so little headway has been made through applying and extending Resource Curse Theory. Surprisingly, we found formal ties with government had little effect; Resource Curse Theory would suggest this would be due to the concentration of regulatory scrutiny and support on the oil and gas industry, where, indeed, indigenization was most pronounced Again, although they may compensate for regulatory shortfalls, we found intra firm ties made little difference in advancing indigenization. Again, Resource Curse Theory would suggest that non-minerals sectors suffer a drain in capital and human resources, which would make indigenization more challenging. Resource Curse Theory assumes that mineral endowments negatively impact on macroeconomic and societal outcomes, but only accords limited attention to how these pressures are transmitted via organizations. Through providing organizational level evidence, we both further illuminate Resource Curse effects in practice, and contribute to extending the base and scope of application of the theory. We draw out the implications for practice

The impact of leadership on absorptive capacity: new insights from the UAE

This paper investigates the impact of transformational and transactional leadership on the absorptive capacity of firms within an emerging market setting. Unlike some findings from the Western world, the results indicate that both transformational and transactional leadership styles positively influence the learning processes of absorptive capacity. More specifically, the results indicate that transactional leadership style positively influences the exploratory and transformative learning processes, while the transformational leadership style positively affects the exploitative learning process. Given the unique context under investigation and the fluid institutional arrangements associated with it, the results reflect the need for leadership guidance. Implications for theory and practice are discussed

Resource Cursed Economies and HR Practices

This chapter explores HR practices in resource-cursed economies, with a particular focus on the context of Brunei. The literature available on the resource curse implies that organisations in non-oil and -gas sectors across petro-states experience a number of key obstacles to achieving competitiveness and becoming self-sustaining. This chapter investigates the link between particular HR policies and practices and business performance; emphasis is placed on examining and drawing contrasts between oil and gas and non-oil and -gas sectors, whilst further seeking to highlight the comparative lessons aimed at garnering insight into the possible and performance-related results associated with HR interventions in resource-focused national economies

Human resource management in multinational and domestic enterprises: A comparative institutional analysis in Southeast Asia

This paper looks at the relative impact of context on the role of senior managers. It compares HR Directors of Domestic Enterprises (DEs) against those of multinational enterprises (MNEs), within an emerging market setting, based on a survey of HR Directors in Brunei. We found that that, with the exception of some aspects of selection and recruitment, HR Directors of MNEs accorded a higher priority to strategic tasks, yet were more reluctant to delegate. This study confirms the importance of MNEs in pioneering more modern and integrated approaches to people management, but also limitations to the extent to which they might act as evangelists of new practices that are adopted by their local peers. In contrast, local firms were more likely to concentrate their attention on administrative, rather than strategic, issues. We draw out the implications of our findings for theory and practice

Can HRM Alleviate the Negative Effects of the Resource Curse on Firms? -Evidence from Brunei

Purpose: The resource curse literature suggests that firms operating in non-oil and gas industries in petrostates face considerable challenges in securing competitiveness and sustaining themselves. Based on a firm level survey within a micro-petrostate, Brunei, this study explores the relationship between specific HR policies and practices and organisational performance, analysing, comparing and contrasting oil and gas with non-oil and gas sectors, and draws out the comparative lessons for understanding the potential and performance consequences of HR interventions in resource centred national economies. Design/methodology/approach: Data for this study was generated from a primary survey administered amongst the HR Directors in companies operating in all sectors in Brunei. A statistically representative sample size of 214 was selected. Findings: We confirmed that firms in the oil and gas sector indeed performed better than other sectors. However, we found that the negative effects associated with operating outside of oil and gas could be mitigated through strategic choices: the strategic involvement of HR directors in the affairs of the company reduced employee turnover and added positively to financial returns across sectors. Practical implications: Developing and enhancing the role of people management is still very much easier than bringing about structural institutional reforms: the study confirms that at least part of the solution to contextual difficulties lies within, and that the firm level consequences of the resource curse can be ameliorated through strategic choice. Originality/value: The nature of the present investigation is one of few studies conducted in South East Asia in general and in the context of Brunei in particular. It also contributes to our understanding whether HR interventions can ameliorate the challenges of operating in a nonresource sector in a resource rich country

Institutions, complementarity, human resource management and performance in a South-East Asian Petrostate: the case of Brunei

This is a study on the incidence and impact of specific sets of HR practices on organisational performance (OP) across different types of firm, within an emerging market setting, where institutional arrangements are fluid and developing. The literature on comparative capitalism suggests that, within advanced societies, formal and informal regulations are mutually supportive, and will be sustained by associated HR systems, optimising OP. In contrast, in settings where institutional arrangements are weaker, there will not be the same incentives for disseminating mutually supportive HR bundles, and when these do exist, they are unlikely to yield any better outcomes. We found that this was indeed the case in the petrostate of Brunei as the usage of integrated HR models did not work better than individual interventions. Whilst it is often assumed that, in petrostates, the primary focus of institution-building is to service the needs of the oil-and-gas industry, we found no evidence to suggest that integrated HR systems were any more effective there; this may reflect the extent to which the industry’s HR needs may be simply resolved through turning to overseas labour markets – both for skilled and unskilled labour. At the same time, we found that the efficacy of HR practices varied according to firm characteristics: even in challenging contexts, firms may devise their own solutions according to their capabilities and endowments