Arbitration Laws in UAE

There are many articles that describe the arbitration process that have been described above. We will briefly discuss these articles here and show the legal status of arbitration in UAE. The first article pertaining to arbitration mentions that a legally valid contract is necessary for independent arbitration in the country. It is also mentioned that a final decision can only be reached by the parties who are directly involved in a dispute. Opposing parties can decide to opt for arbitration in which case they would not have to file a law suit. The arbitration process is automatically cancelled if any party goes directly to court with a law suit. 

The second article in this matter provides information on the appointment of arbitrators if the opposing parties cannot agree on an arbitrator or their appointed arbitrator is unavailable due to any reason. It is also essential that an arbitrator must be in a legal position to assist and should not have the status of a person with revoked civil rights such as a criminal. For multiple arbitrators, their number must be odd to ensure a judgement with majority. Arbitrators can only be appointed with written documentation. They can also be asked for compensation if they leave an arbitration during the process. Disputing parties may agree for the removal of an arbitrator in which case a new one will be appointed according to the conditions of that particular arbitration. An arbitrator however cannot be removed once a judgement is made or the hearing is completed. An arbitrator also needs to start the arbitration process within a month of accepting appointment. If criminal proceedings or other such issues arise during an arbitration, the arbitrator is entitled to suspend all proceedings and refer the case to the relevant court of law. 

The arbitration takes place just like a proceeding in a court of law where opposing parties are required to take oath and back their information with solid proofs. The arbitrator can deliver and authorize a verdict just like done in a court and the opposing parties must agree to this arbitration which shall be done in writing and signed by disputing parties. The court can also start an arbitration in which case the arbitrator will issue their award and send its copy to the relevant court. A court can ask arbitrators to reconsider an award but it is ultimately the final body that makes a judgement. If the arbitration occurred through a court then it requires an approval before becoming active and binding on disputing parties. The award of arbitrators can become void if they were not selected according to the rules and regulations mentioned in the UAE laws. These are the main points that are covered in articles which explain the arbitration process in UAE. Local laws also come into play when the disputing party is the UAE Government. 

UAE laws: "The Court's involvement in the arbitral process under the UAE's Federal Law on civil transaction."

Introduction

A court is an institution which has the authority to dissolve legal disputes among different members of society as well as provide administration controls for observing the laws of a country. All legal systems around the world use the system of courts to solve legal disputes as well as to run cases for crimes against the state. All persons accused have the right to defend themselves indiscriminately within these legal bodies. Arbitration is a method of dissolving disputes among people and organizations while remaining outside a legal institution such as a court. The court on the other hand may offer arbitration services as well. There are many cases where opposing parties are willing to find a settlement among common grounds while remaining out of the public eye. Arbitration provides the best method of settlement as it is generally negotiated by a neutral party.

UAE has a system of courts that provides the best mix of Islamic Law and the traditional Western Laws.  UAE has a federal court structure with a Supreme Court in Abu Dhabi but the Emirates of Dubai and Ras Al Khaimah are separate from this system and have independent judiciary. The UAE courts have three basic subdivisions of Sharia, criminal and civil courts. Civil Courts usually deal with commercial matters while the criminal courts obviously are associated with the prosecution of criminals. Although the legislation lacks a direct clause that directs courts to use arbitration, there is the presence of UAE Civil Procedure Code. The Chapter 3 of the Federal Law No. 11 of UAE Civil Procedure Code discusses arbitration in UAE legally. The Articles starting from 203 to 218 discuss arbitration service and all its details. These articles and other local laws form the basis for local courts to become involved in arbitration services on civil transaction matters.

Arbitration

Arbitration is a very important concept which is used in resolving disputes. It is a particularly useful technique for dissolving monetary disputes. The main aim of any arbitration is to provide a neutral point of view for both parties who are involved in a conflict. The details of arbitration vary slightly from country to country and there is always a margin of relaxed laws in arbitration since it requires that the two opposing parties find a common ground of interest. 

Communications Improvement at Local KTG Business - 5

Communication is important in all the activities that we do. In fact communication is the key in any business because without it, clients and businessmen cannot meet and understand each other’s needs. Communication refers to the delivery of one’s message to the others in a form that they can understand. It also refers to the understanding of the message that the person is delivering to us. Organizational communication is the same concept when taken at a larger scale on a company level. One of the key activities of management is to perform communication activities (Bell & Smith, 2010). The management hierarchy at any organization including KTG is arranged in a manner as to provide communication between the top level management and the working staff of the business group. The company in fact has a central system of generating and delivering knowledge. This system runs by using knowledge stream leaders who directly report to a central knowledge manager. The company however requires a lot of improvement at the regional level. There is a definite communication gap between local employees and the higher level management currently. The employees are unaware of the company goals and the management has not communicated the company’s desires with the community or the environment. The company usually operates very well and always works with regards to improving the environment but this message is not being delivered at the local level where not even employees are aware of the basic principles of KTG especially with respect to the environment. The new regional head must change all these concepts and this can only be done through improved communication both on an interior as well as exterior level of the organization.

The regional head will need to apply strong communication skills to quickly improve the situation at the region and create an environment where all the employees can work with maximum efficiency and improve the overall productivity of the organization. The first step in effective communication for a manager is to identify the type of people he needs to communicate with. Different kind of employees such as workaholics and dreamers cannot be communicated in a similar manner as maximum efficiency cannot be achieved (Bell & Smith, 2010). The regional head needs to use the input of the knowledge stream staff to create a detailed profile of each employee. It is not such a difficult task as the regional office has 24 workers and 10 members of support staff. We will mention here some communication techniques and instances that the new regional head seeks to use to improve the organization and help it come over all the discrepancies that the CEO has identified currently for the regional office of the business.

Effective Communication with Staff

It is important to note that workers are usually contacted by management when it wants to give a directive or correct the working of a team member. The most effective communication however is the positive communication where people are talked about their general work and discussions are done on the general concept of improving their abilities and the methods of performing these tasks (Bell & Smith, 2010). The positive tone of communication provides multiple benefits as it ensures that employees do not become disinterested in their work and they also believe that the company values them and takes their input on all important matters. Communication must also be done with local authorities as well as community. The company can take part in some social initiatives to ensure that its brand name becomes well known in the region and it can build a success on being a good organization which cares for the environment and therefore is trying to pursue the business in the renewable energy sector.

Communication Feedback and its Benefits

All communication whether with employees or with management must be done with a purpose in mind. It is useless to take the suggestion of employees if the company does not plan to implement steps on it. All the communication must be handled and used in a way as to provide feedback and must be used for improving company operations (Bell & Smith, 2010). If the regional head meets business stream leaders who share their work problems then he must take steps to ensure that these problems are addressed and work related issues are removed. Similarly, employees must be given quick responses in order to create motivation and belief in them. This will also empower the company brand in them and they will psychologically feel attached with the organization which will definitely improve their work quality.

Interdepartmental Communication

Departmental communication is necessary especially in this situation because the local business is not performing well and the company is looking to establish itself in the new market sector of renewable energy sector. The company runs on a double matrix system of business and knowledge stream. The knowledge stream usually gives its output directly to the department head but this policy will require changing as the local office can only work better with communication occurring regularly between knowledge heads and business heads. Both departments must share all their workings and should report to the regional head on a constant basis. The regional head will ensure that a policy of interdepartmental communication is in place and everyone is aware of any new information which is available to any branch of the KTG business in order to succeed at the business of renewable energy.

Expertise Enhancing Training Sessions

Training sessions are also a part of communication as well as improvement methods. The regional head has asked for the recruitment of two employees who know the renewable energy sector. Once these individuals are employed, the organization must provide training to the staff which is already employed at the local office. These training sessions will not only improve the professional skills of the workers but also increase and improve the cooperation between them. The setting of mutual goals will ensure that the employees will need communication between them and such communication will form the basis of natural learning which will be required for improving the local business of KTG.

Conclusion

The study has thoroughly examined the case represented by the local of the KTG business group. The local region needs improvement through the use of effective leadership skills. Different activities are identified in this study and all the management changes will be overlooked by the regional head of the organization. All of the mentioned changes have the focus on leadership skills and motivation is especially discussed as an important tool to ensure that employees improve themselves and become effective at doing their job in an efficient manner. Communication is also an important tool useful in improving organizational standards in such cases and its effects are also discussed for the improvement of regional KTG Business Group.

Bibliography

Bell, A.H. & Smith, D.M. (2010). Management Communication. US:  Wiley.

Crum, R.L. & Goldberg, I. (1998). Restructuring and Managing the Enterprise in Transition. The World Bank. US: EDI Learning.

Frey, B.S. & Osterloh, M. ed. (2002). Successful Management by Motivation: Balancing Intrinsic and Extrinsic Incentives. Germany: Springer.

Hiam, A. (2003). Motivational Management: Inspiring Your People for Maximum Performance. US: AMACOM.

Porter, M.E. (1987). From Competitive Advantage to Corporate Strategy. Harvard. Retrieved from http://people.tamu.edu/~v-buenger/466/Comp_Adv_to_corp_strat.pdf

Sadler, P. ed. (2003). Leadership. US: Kogan.

  

Motivation at KTG Organization - 4

Motivation is very important and it is a vital component of effective management. The management problem described for this research directly requires a lot of motivation especially to the staff of the region which is not doing well. There are total 34 employees which form the local branch of the KTG business group. Most of the employees are not aware of overall company policies and they are somewhat ignorant of the targets that the company desires for the region. The employees therefore require all sorts of motivation to make them not only better but to associate them with company aims and objectives on a personal level. All activities that are done with respect to improving the employee participation and awareness level in a business can be considered as motivational. Motivational is one of the key concepts of operational management and it is used on a consistent basis throughout the world (Hiam, 2003). All successful companies around the world use motivation to build up large and successful business and the current local situation at KTG business requires the use of advanced motivational techniques as the company cannot change its entire workforce and it has to somehow use the same core of employees to achieve organizational success.

Motivation is a vital activity and therefore it applies to most businesses around the world. We have a specific case available here but there are some motivational concepts that are applicable in all the cases of business (Frey & Osterloh ed., 2002). We will first discuss here the general methods that are needed to be applied and addresses to improve the workforce at the local KTG office. We will then discuss some important motivational schemes that will place specially to improve employee motivation in the aforementioned case.

Improving Employee Motivation at KTG

There are some motivational methods that are essential in all kinds of businesses. These methods are basically designed to improve the coordination between team members and team management and therefore are applicable in multiple management situations.

Friendly Management

Good management is friendly and allows team members to easily communicate with management to discuss issues that are bothering them both in professional as well as personal situations. Friendly management always creates productive environment in which people find it easier to learn new skills and improve themselves as better professionals (Frey & Osterloh ed., 2002).

Work Rewards

It is important to motivate employees by rewarding them for their work. It must be understood that employees must be rewarded not for extra work but for the work that is especially assigned to them. Not all employees are on a same level professionally and therefore multiple step system of work rewards must be set up to ensure that every employee feels welcomed and can receive a reward if he or she works hard and achieves a well communicated personal goal.

Work Importance

Different employees usually perform different tasks in a business setting. It is important for all workers to realize that their work is important for the organization and it cannot achieve success or complete its tasks if it is not for them. All employees feel motivated when they are made to believe that their work is very important with respect to the organization that they are in.  Once employees believe that they do important tasks and they are responsible for achieving organizational targets, they feel motivated and their efficiency and overall productivity improves greatly (Frey & Osterloh ed., 2002).

Equal Treatment

Equal treatment is extremely important in creating motivation among employees. If a manager does not practice favours and all the employees are given goals that they feel that they can achieve goes a long way in creating stable and motivated workforce. Equal treatment can become difficult in some cases such as the one described in our research because all employees have different skill levels needed to work towards achieving business entry into the new market of renewable energy but all company policies must clearly mention equality on all grounds.

Motivation in Leadership and Management at Local KTG Business

KTG local business also requires some important motivational techniques and practices to ensure that the company can turn this local branch into profits and make use of the opportunity provided by the appearance of a new market where there is a golden chance of success. It has already been mentioned that the local knowledge stream leader has a lot of regional knowledge but is not well adept at providing professional help in the field of renewable energy. This creates a problem in management structure as the previous regional head has also left the company and it is now facing a crisis of local leadership in the region that is well aware of the market trends and can take advantage of the renewable energy sector to once again establish the company in the region. We will mention here some methods that are specific to the situation presented in our research problem.

Managerial Motivation and Engagement

Motivation generally is regarded as a concept that is applied to the general workforce of an organization and there are many times where the management structure of the company is neglected and not even offered any benefits for achieving specific targets. This is a problem commonly faced by the mid level management which has to perform the most difficult of management duties.  The management structure of the regional office must be taken on board with a meeting headed by the CEO of the organization. The regional head must also ask for the opinions of the business stream leaders. This will create the necessary motivation in the management staff which is extremely important for achieving success in such changing business situations (Hiam, 2003). Stream leaders will also feel that they are well engaged in the organization and the upper level management is keen to take ideas from them and it is also looking to take them on board for the entire decision making with regards to improving the local business especially in the renewable energy sector.

Interdependent Challenges

The new regional head has already asked for recruiting new employees who have local knowledge of renewable energy business. These new hiring must have interaction with both business and knowledge stream leaders. Coordinated and interdependent aims and objects can be set up for them in a way that makes them share information with each other and achieve goals that will provide organizational success. The business and knowledge streams will need to be combined in this region in order to achieve organizational success. The mid level management should never be threatened but they must be challenged in order to improve quickly and turn their focus towards the new market industry that has a lot of potential in the region. 

Strategic Planning for Organization at KTG - 3

Strategic Planning for Organization

According to Porter (1987), the main concept and goal of any business is to identify its market as well as how it will manage to work in that market. The theory designates four key activities which include portfolio making, restructuring, transferring and sharing. We believe that the regional head will need to apply many points of this theory. The KTG business in the region needs to be restructured which may require new recruitments. The new recruitments should be made with the policy of promoting individuals with a prior experience in renewable energy sources in the region. The regional business portfolio will also need to be slightly altered to promote the business activities that it needs to perform which are obviously deviating from other regions. Sharing is still the key where basic concepts such as finances and knowledge gathering is still divided in various regions which ensure that the regional offices can truly focus on finding success at specific goals such as tapping into the renewable energy market. The local knowledge stream leaders must coordinate and cooperate with the region head in order to find ways of improving the company workforce. They will also be responsible for devising strategies of motivating employees which may include the offering of added incentives and target based achievements (Porter, 1987).

The regional head will hold meetings with both business stream leaders as well as knowledge stream leaders and devise an aggressive strategy to attack the new business opportunity in the region. He or she may authorize one or two new positions in the region so that they organization has expertise in the targeted business of renewable energy. The regional head should discuss these strategic changes with the CEO of the organization and implement them at the region as quickly as possible to improve the regional business of KTG. The regional head has formulated some key points in the strategy that he is going to use to achieve organizational success. These points are briefly discussed here.

Market Knowledge as a Tool for Improvement

The local organization needs to increase and improve its market knowledge. There are new opportunities available in the renewable energy sector and the company does not have a lot of experience in it. Market knowledge for the sector needs to be improved and the new regional head has identified the necessary steps that will improve the situational awareness of employees. The new additions that are requested by the head will ensure that the market knowledge of the whole team will increase as these team members will share their earlier experiences in the field of renewable energy. The regional organization will also improve its knowledge of the available financial sources and find about the rivals that it is facing in the emerging market so that it can offer customers competitive solutions.

 

 

Hiring Expertise

The regional head plans to add two team members to the regional office. These members will be hired from the renewable energy sector and they will develop the base of the regional business in terms of information regarding the new industry. These individuals will then be made responsible for preparing bids as well as technical documentations with regards to the opportunities found by the company in the renewable energy sector. These individuals will also be responsible for arranging training sessions for existing employees and improving their knowledge of the energy sector. These employees when trained can then offer assistance to their trainers in order to prepare bids and documentations regarding the offer of services in the energy sector in the region.

Reinventing the Workforce

The regional head will restructure the working hierarchy slightly in the region and he has formulated that formation of teams is necessary for performing work ideally. Teams can be assigned individual projects where they share common goals of applying for a business opportunity and making it a success. The teams will be locally responsible for projects from the start of the bidding to the delivery of a project. A feedback loop will also be created where team leaders will discuss their projects with each other and provide weekly reports to the regional head (Crum & Goldberg, 1998). The regional head will also be communicating with knowledge and business stream heads to identify possible business opportunities and assigning them to relevant teams in the region. The regional head will then be responsible for arranging any trainings or demonstrations required by teams to achieve success in their respective projects. He will also be responsible for delivering monthly reports to the CEO with regards to the regional business position and the market penetration of the company in the sector of renewable energy.

Business Strategy for KTG Regional Office - 2

KTG is a very strong group that is running successfully at multiple locations. It has a very strong base in multiple regions. The region where the command is given is one of the only struggling regions of the company. The company is achieving success everywhere and this situation highlights the fact that normal company policies are not going to provide success in this region. It is very important first of all to understand a region in order to devise a business strategy and plan for that particular region. The company has a double structure of an operational branch which is combined with a research branch. The research branch is also essential as it is responsible for finding new market trends and identifying various products and situations which can be used by the company to achieve success. The research is done with a central control in KTG where all regional knowledge centres report to the central station which controls the overall knowledge flow. The local centre however needs to be given specific targets in this regard in order to find out the current market situation regarding the new opportunities found in the renewable energy sector. The knowledge stream leader will be using the same employees but with a clear thinking, it will be able to divert the strategy and time devotion of individual members towards finding out the renewable energy sector locally. Such a knowledge project will also find out the current strengths and weaknesses of current team members with respect to this new market sector of renewable energy sources. 

Leader of KTG Local Branch -- 1

Executive Summary

KTG Business Group is a strong organization which is working on a multinational scale. It has successful business operations in most regions. One of the regions is not doing well as it was badly affected by the adverse economical situation that the world faced over the past few years. The CEO of the organization has highlighted a few problem areas of the region and has hired a new regional head. The main responsibilities of the regional head include the changing of current business situation and ensuring that the region becomes profitable in near future.

It is identified that the regional employees are lacking the necessary drive for business activities. They are experts at traditional business markets which are currently not working well due to economic situations. The regional head has a leadership opportunity and he has formulated a strategy to change the situation at the company. The study discusses the strategy and the leadership skills that will be used to positively affect the region and produce the desired results.

The study identifies motivation as the key leadership skill which will be required for improving the regional KTG business situation. Different motivational techniques are prescribed and explained in the case assignment. Organizational communication is also discussed as well as how it is useful in the current situation.

Business Approach

Leadership is a key concept in management as it is the necessary skill in achieving the overall success for any organization. A leader is a person who really causes motivation in subordinating people and is responsible for achieving common goals by making different people work together for achieving group success (Sadler ed., 2003). If we divulge in the pages of history, we find that all successful organizations started by the efforts on an individual who was a great leader. We also have common day examples in front of us especially in the field of information technology such as Bill Gates and Mark Zuckerberg. There are many concepts that are attached with leadership and how it is applied to organizational success. We will briefly discuss here the models that we need to apply for establishing leadership trends for KTG business and make a successful business strategy for them according to the organizational situation mentioned in the current situation. Trait theory is one of the most useful leadership theories that appeared in the mid of 20th Century. This theory discusses that leadership can be explained on the basis of certain characteristics or traits of the leader.  This theory however was established using low to mid level managers and it can be quite effectively used at lower levels of management. We are presented here a situation where regional control is available to us for use to make the organization a success by using a well known opportunity that is available to use in the particular region. Another theory explains that leaders must be proactive to use people effectively and create group success (Sadler ed., 2003).

Let us put a model in view in relation to the situation that is presented to us in the example of this study. There is a lot of ambiguity in the minds of workers of the KTG Group. They are completely unaware of how their organization can achieve success in their particular region. The most important concept here to be used is to create integration among workers and management of the organization especially on the regional level. Knowledge base of the organization needs to be used and they must be reassigned under the same manager to perform new researches and gather data with respect to new and emerging business situation in the local market. The integration between support staff and team members also need to be strengthened to ensure that productivity or the local organization can be increased to a maximum. Trainings need to be arranged for team members as well and occasional visits from CEO of the organization must also be arranged. Such activities will ensure that employees can connect themselves to the organization and will feel that it is their duty to achieve success on behalf of the organization. They will also be motivated and their organizational awareness will also increase while attending trainings and meeting sessions.

Democratic leadership will be used for achieving organizational success where the new manager will engage all the personnel on the local team and inform them about the company goals and the possibility of improving the business by looking for new opportunities that are present in the local market. Specific goals must be shared and given to different team members as their individual responsibilities as this will create a sense of responsibility as well as pride in team members who are reluctant and unaware of company ambitions.

Problems of Pension System in UAE (Part 7)

3.2. Qualitative Methods

Research can also be done through the means of qualitative methods. These methods include interviews, reviewing articles and doing other such activities. Such activities provide high quality information from relevant sources that are directly affected by the lack of pension system in the country (Cassel & Symon, 2004). Qualitative methods provide a lot of different perspectives of people about a topic and such methods are used to find the aspirations of people as used by the YouGov and Bayt.com survey (Bayt & YouGov, 2013). Such surveys are quite important as they provide the real data that is present in the field of operations.

 

3.3. Research Suggestions

There are many improvements that can be made in various fields that will improve the association of employees with their organizations. This will positively impact employee retention and will also ensure that employees are happy with their current position and they believe that their situation will gradually improve due to a working system that is in place to take care of all their needs which includes old age benefits. These benefits are extremely necessary in order to create goodwill among employees and make sure that motivated employees are separated from greedy employees who are only working with inspiration from monetary benefits of an organization. A secure future gives a lot of confidence to employees and they are then willing to work at lower salaries if their future career growth is guaranteed (Terry & White, 1997: 160-175). This means that the company should place an independent retirement scheme at the organization which must be voluntary so the employees do not feel that they are enforced into a deal with the organization. Employees themselves will work better in such an environment and most of them will opt for the retirement schemes. Such schemes however can only work at the level of an organization as currently no federal support is available for transfer of employee from one organization to another so a private scheme will provide extra motivation to the employees of BTN Company and will also not increase costs incurred by the company a great deal as the company will save its costs in terms of training and development of employees because retention rate will directly increase due to setting up of such a scheme (Guillon & Cezanne, 2014: 839-850).

There are also multiple steps that the human resource depart can do to improve employee retention. Career development paths and strategies must be developed at the organization and each employee must be clearly communicated his or her chances of moving ahead in the company in terms of goals and achievements. Such goals will clearly encourage employees to work better and increase the productivity of the organization. In UAE, most employees want a clear career path so that they can know about their future growth as well as the monetary benefits that they can achieve in a certain number of years (Emirates News, 2014). BTN Company will be improving the perception of employees a great deal through the methods that are described above for employee motivation and retention. Such steps will conserve the growth of the company and will allow it to expand as employees will leave less while more will join and the company will be able to undertake more projects on a continuous basis.

 References

Bayt & YouGov (2013). The Bayt.com Middle East and North Africa Salary Survey 2013. Retrieved from http://img.b8cdn.com/images/uploads/article_docs/bayt_salary_0513_17122_EN.pdf

Cassel, C. & Symon, G. (2004). Essential Guide to Qualitative Methods in Organisational Research. London, UK: Sage.

Collis J. & Hussey, R. (2003). Business Research – a practical guide for undergraduate and postgraduate students (2nd Ed). Palgrave Macmillan. Retrieved from http://lib.myilibrary.com/Browse/open.asp?ID=25100

Emirates 24/7 News (2013). UAE's first pension scheme for expats. Retrieved from http://www.emirates247.com/news/emirates/uae-s-first-pension-scheme-for-expats-2013-02-10-1.494380

Emirates 24/7 News (2014). Pension scheme on the anvil for UAE expats. Retrieved from http://www.emirates247.com/news/emirates/pension-scheme-on-the-anvil-for-uae-expats-2014-10-21-1.567024

Guillon, O. & Cezanne, C. (2014). Employee loyalty and organizational performance: a critical survey, Journal of Organizational Change Management, Vol. 27 Iss: 5, pp.839 - 850

Hair, J.F., Money, A.H., Samouel, P. & Page, M. (2007). Research Methods for Business. Chichester, UK: John Wiley.

Keiningham, T., Aksoy, L. & Williams, L. (2009). Why Loyalty Matters: The Groundbreaking Approach to Rediscovering Happiness, Meaning and Lasting Fulfilment in Your Life and Work. US: BenBella Books.

Khaleej Times (2014). 46% professionals in UAE not happy with salary: survey. Retrieved from http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=data/nationgeneral/2014/June/nationgeneral_June72.xml&section=nationgeneral

Leedy, P.D. & Ellis Ormrod, J. (2005). Practical Research: Planning and Design, 8th Edition, Upper Saddle River, NJ: Pearson Prentice Hall.

Murphy, T. (2014). Morgan McKinley Salary Survey Market Insights, UAE 2014. Morgan McKinley. Retrieved from http://www.morganmckinley.ae/article/morgan-mckinley-salary-survey-market-insights-uae-2014

Richardson, J. & McKenna, S. (2002). Leaving and experiencing: why academics expatriate and how they experience expatriation, Career Development International, Vol. 7 Iss: 2, pp.67 – 78

Saunders, M., Lewis, P. and Thornhill, A. (2009). Research Methods for Business Students, Pearson Education (5th Ed). UK: FT Prentice Hall.

Terry, N.G. & White, P.J. (1997). The role of pension schemes in recruitment and motivation: Some survey evidence, Employee Relations, Vol. 19 Iss: 2, pp.160 - 175

WEF, World Economic Forum (2014). World Economic Forum Annual Meeting 2014. Retrieved from http://www.weforum.org/events/world-economic-forum-annual-meeting-2014

Wilson K. (2014). United Arab Emirates. World Economic Forum Report. Retrieved from http://www.weforum.org/pdf/Global_Competitiveness_Reports/Profiles/UAE.pdf

Absence of Pension System in United Arab Emirates (Part 6)

2.4.1. Staff Loyalty and Motivation

The trend of employee turnover in UAE is creating problems especially for smaller and mid level organizations. These organizations typically have to rely on individual skills of their employees for most of their work and therefore their working style is disturbed a great deal especially if a worker leaves that has a unique skill set in that organization as the company now lacks the workforce required to complete its projects and it has to quickly spend money in employee recruitment and development to ensure that the set of necessary skills is once again present in the organization. All companies work in a manner that requires some special skills that can only develop while working within the organization. The loss of skilled personnel therefore removes such skills from an organization and also severely limits the training mechanism found at a firm. Staff loyalty is therefore extremely important for smaller firms and it is a basic prerequisite for successful business operations (Keiningham et al., 2009). BTN Company is also a mid level organization with 40 employees and it is certainly affected a great deal if a particular employee leaves from an important work position. A new employee cannot have the similar skill set because some skills are developed while working within the organization. The BTN Company for example uses custom software for work related queries which require some time to become perfect at use and therefore time and resources of the organization are wasted each time the company has to recruit a new employee (Murphy, 2014).

Motivation is extremely necessary for successful business operations. Motivation in employment refers to the urge in employees to perform at the best of their abilities to ensure that their businesses become successful and productive. Employees are motivated due to a lot of reasons. Monetary benefits also play a key part in generating motivation but they are not the most important especially in the UAE where salaries are much better from the neighbouring countries of South and South East Asia (Emirates News, 2013). Motivation of employees in UAE chiefly depends on the number of growth opportunities that are available at a person’s current job environment. Most expats can get stuck in mid level management in UAE and therefore job evolution becomes the most important factor for producing motivation in expatriates of the country. Companies where employees are frequently promoted along with rise in salary enjoy from highly motivated employees but such companies are hard to find in the private sector of UAE and BTN is also such a company which suffers from low level of motivation in new staff members due to multiple reasons. The company on the other hand is also short on confidence especially on the new employees on which it is spending its training and development budget because employees often change jobs within a brief period of a year or two especially early in their career. Extra benefits such as retirement plans and pension systems help in generating the interest of employees in a company and give them a relief that that their future is secure regardless of the company they are presently working at. UAE lacks from a federal pension scheme and this is generating a loss of motivation in all private organizations such as the BTN Company. It is a company that offers various solutions and therefore its services entirely depend on a talented workforce. It gets difficult when employees switch jobs quickly as new staff has to be hired and trained and the overall efficiency of the company drops during the preparation of new workforce for a particular task.

Chapter 3: Research Methodology

The research will be based on the answers provided by the employees of BTN Company and different articles that discuss the problem of expat retention in UAE. Basic methods that are applicable here are designed to find answers to the problems imposed by the lack of federal pension system in the UAE. Let us prepare a survey to be used to find out about what people think about their current job and what are their expectations in the future regarding this job. Different methods can be used in the study of finding the effect of the lack of federal pension system in UAE. The major effect that can be seen through both qualitative and quantitative methods is that people like to quickly switch jobs in the country because they do not feel much associated with their relative companies due to a lack of long term attachment system.

Research methodology defines the important methods and ideas that are implemented when looking to perform a research over a known topic (Collis & Hussey, 2003). The research methodology is an important tool which describes the ideal methods for evaluating key solutions against research problems. The problem of lack of a federal pension is quite evident and clear in UAE. It is a perfect problem to apply research principles and find what can be done in order to study the problem and find appropriate solutions for it (Hair et al., 2007). There are two basic kinds of search methods that are used to do research in all kinds of fields. These two methods are simply qualitative and quantitative research methods. The different methods that are going to be used for finding critical data for analysis in this research are briefly explained below.

3.1. Quantitative Methods

This method attempts to take the opinion of people who are already working at BTN Company. An appropriate method is of surveys where the questions are clear and do not force the persons who fill out the surveys to take a side. A survey must be created in a way as to keep it free from prejudice. The survey must also be designed to provide real help and always provide answers to the different aspects of our research problem. Surveys provide quantitative information even if they do not contain a question regarding numbers (Saunders et al., 2009). This is due to the fact that they produce multiple data sets which can be analysed to find similar trends within the employees of the BTN organization. Questionnaires are also an effective method of surveying and can be used at multiple organizations to find employee data and relate its trends to the general problems found in UAE.

Absesnse of Pension System UAE (Part 5)

Conceptual Framework

A framework is quite necessary for the development of a research proposal and it also identifies the right methods that are required for completing a proper research. Federal pension system is a necessary benefit which must be present in the country as it is present in other countries around the world. A framework can be designed to formulate a research and select the best parameters for solving key issues (Leedy & Ormrod, 2005). The research uses common methods such as surveys and newspaper reports to evaluate the situation of pension and expatriates in the country. The basic theory of the problem here is that pension systems are available everywhere around the world. UAE is a prospering country but it does not have a proper pension system. This has adverse effects on the retention and motivation of employees in the field. The example is of BTN Company which has lost more employees than those that have joined up.

2.4. Working Theory

Pension refers to a monetary fund that is given to a person after completing a term of service at an organization. It is one of the main monetary methods available in old age to people who retire after offering their services to their employers. Pension is slightly different from job benefit or severance pay because it is usually given on a continuous basis periodically while other methods provide one time money. Governments around the world ensure that there are labour laws in place which govern different aspects of pension as how the money is generated and then distributed to old and retired employees. There are many pension schemes available around the world and it is therefore hard to understand that the concept of a regular governmental pension scheme is not present in United Arab Emirates. The absence of a regular pension program has caused many issues in the country and it is generally attributed to cause the loss of foreign workforce in a longer time period.

BTN Company can be presented as a typical example of a company which suffers from the lack of a pension program. The company suffers to maintain its size and finds it very hard to grow due to the lack of employee motivation as well as expat retention. The study stresses and finds the fact that a government based federal pension scheme is necessary for retaining expatriate employees in UAE and it is almost the major reason why people switch jobs over a shorter period of time in UAE.

Problems of Pension Systems in UAE (Part 4)

2.2. Problems of Pension Systems in UAE

There are currently many issues that are faced by people who are working in the United Arab Emirates. A survey done by the famous website Bayt.com carried out a survey in collaboration with YouGov to find out problems faced in UAE has revealed many discrepancies in the UAE job market. There are many people who have indicated that there has been no pay rise at their current jobs. Most people also work in companies with a fixed payment structure. Almost half of the people were found to be dissatisfied with their current salary which means that there is a serious mistrust issue among employees and their employers in the country. Only 4% people were happy and well satisfied with their salary structure. Employees in UAE are given some common job benefits which include medical insurance and air tickets on an annual basis (Bayt & YouGov, 2013). People though are not interested in keeping their jobs if they can find work in a flexible manner. People in general are not loyal on the basis of their salaries in UAE. Most employees believe that their loyalty is mostly affected by career growth opportunities at their workplaces. Most employees in UAE receive gratuity on retirement but the number of persons who receive pensions are very low. Many people are interested in contributing in a pension plan and say that they are will to contribute in a pension fund from their salaries. The cost of living is increasing in the country which has made the expatriates more serious about saving their earnings to secure their future especially in old age after retirement (Richardson & McKenna, 2002:67-68). It is becoming difficult to save while living in UAE and this means that UAE government must take steps to ensure that people are still attracted to especially work in the private sector organizations of UAE as the conditions in neighbouring countries around the world are improving continuously and important workforce is getting attracted to return to their countries after serving for 5 to 10 years in UAE.  The quality of life is certainly better in UAE but there are a lot of issues that make the decision of staying in UAE difficult for longer periods. Most people believe that there are better jobs available and they want to switch jobs for better ones. Some people also believe that salaries are currently stagnant because there is a lot of talent available for hire in UAE which decreases its monetary value. The general laws of UAE are also employer friendly and do not support employees more frequently. Most people with good jobs also spend money outside the country as they take international holidays and go to other places for leisure. Most people find themselves in middle level management which stagnates their careers because there are fewer opportunities available in the higher management of companies.

UAE is generally a great country to live due to its tax free economy and great quality of life. The only trouble is a lack of retirement plan options for expatriates. Pension is necessary because everyone gets old and gets past the working age. The saving for pension should start with the start of earning. There are very little employer based pension schemes available in the Middle East region. People however can opt for independent financial advice to make a retirement plan for themselves. The Emirate of Abu Dhabi has seriously considered the creation of a pension system for expats in the region. There are no state sponsored funds present currently but the trend is now on the path of change with serious consideration given to such system on higher administration levels of the UAE government. Such schemes though need to be made mandatory to create regular pensions for people and this will also mean that expats will look to invest their money in UAE because of a secure future due to the setting up of a pension fund for them. The Emirate of Dubai is now also seriously considering different pension schemes for expats as most people who live in Dubai send major portions of their salary back home and do not save in UAE as they are unsure of UAE financial rules and system in general (Bayt & YouGov, 2013).

Effect of Absence of Pension in UAE (Part 3)

1.3. Research Objectives

This research intends to focus on the importance of a federal pension scheme and its influence on the loyalty and motivation of BTN foreign employees and on the long term success of the company. Motivation is a very important factor in increasing the productivity of the workforce and also to increase the loyalty of employees. Motivation is created through the creation of positive steps of the management of a firm which gives confidence to employees that there work and time spent in the company would be compensated in the most ideal way and their resources will be well developed in the current organization.

The main objectives of this study are:

·         To identify the impact of the absence of a federal pension scheme in the UAE on the loyalty and retention of BTN employees.

·         To identify the influence of the staff loyalty and motivation on the long term success of BTN company.

·         To give suggestions to improve employees loyalty, retention and motivation.

·         To draw conclusions about the applicability of a pension scheme in UAE.

Chapter 2: Literature Review

2.1. Pension Systems in UAE

The absence of a pension policy is now under serious discussion at all the important forums in UAE. The Federal National Council of the country is responsible for advising on new laws and programs for people. There have been many active debates in the council of the topic of retirement and pensions. There has been a lot of sound support for pension schemes. Currently, different private firms provide gratuity funds in the UAE which deliver onetime payment to an employee who is retiring from the fund. There is a lot of room for improvement and enhancement in this regard. The pension schemes must also be available for both nationals as well as expatriates as the economy of UAE is run and fuelled by millions of expatriates working away from home countries for the development and running of United Arab Emirates. A state run fund is necessary for the country just as it is found in most countries around the world. UAE pays high salaries to employees when compared with most countries but firms working in the country have the lowest employee retention rates due to the absence of long term pension or retirement plans in the country. A starting plan can be a mutual retirement fund available for employees through personal choice. Such a fund would be managed by state and all the registered workers in the country will have the choice of paying in that fund. This will encourage people as well as private firms to become part of the pension fund and investments will gradually increase in the system making it more stable and prone to success. State run pension plans are available in most countries around the world and there is no issue that such systems will face any problem in UAE where state funding is not a problem and most private firms are also stable and not short on funding in the country (Khaleej Times, 2014). Currently, public sector salaries are higher than private sector salaries for nationals. A more powerful scheme can be set up for nationals to encourage them in working for private sector organizations. A common scheme will also be present to cover all employees working anywhere across UAE. Such retirement schemes will ensure that employees who work in the private sector will feel more secure at their jobs and will remain at their companies for a longer time period. Employee retention will improve nationally especially in the private sector and we will see an improvement in the overall employee productivity across the country. There are many benefits of such funds. One advantage is that the money remains on the soil of UAE and the state will be able to invest it and earn more money on a national level. The expatriates would also receive more funds at their retirements and they may choose to remain in the country and therefore take part in improving the economy of the country. Pension funds are huge investors in most developed countries and this model can be successfully repeated in the UAE. A pensions plan is also successful in creating a sense of responsibility in people and they become more serious about their future and their method of savings and job choices (Terry & White, 1997: 160-175).

Effect of Absence of Pension in UAE (Part 2)

1.1. About BTN Company

BTN is a private company providing management consultancy services and located in Ras Al Khaimah, the fourth largest of the seven Emirates forming the United Arab Emirates. The company was founded in 2003 with a vision to help local organizations improve their performance by providing solutions, new strategies and best practices.

The Company has over 40 qualified employees belonging to 10 different nationalities. The company is spending around 10% of its annual expenditure on recruitment and development of its human resources.

The company believes that its long term success is depending on the loyalty and quality of its human resources and also that loyal employees can create loyal customers (McCarthy, 1997). This is significant because there is a lack of employee retention in UAE and good employees can quickly move to other companies to look for better opportunities. The employee retention in the company has the same behaviour as in the region as 4 employees have left in the previous year while 2 have joined up. Although the company spends good budget on employee development but still it is not enough to turn the tides in the face of moving employees. The company has the usual policy of giving away gratuity at the end of employment which depends upon the number of years of service and it is a onetime payment given at the close of service period. This payment is never invested anywhere by the company and it simply depends on the current position of an employee. There are no additional benefits that are offered at the company although the employees are free to contact any individual financial advisor who can devise them a personal saving plan for future pensions. Such plans are not present at the organizational level and mid level organizations such as BTN Company are suffering from the loss of important talent that would otherwise stay in a place for longer period and therefore produce better and long time results for the organization (WEF, 2014).

1.2. Research Significance

The topic of this research was chosen due to the importance of pension scheme and retirement plan for any employee anywhere. The absence of such plans in the UAE affects the long term domicile decision of expatriates and makes the country a transient place to work for 5 to 10 years maximum, but not to live permanently.

The researcher is an employee of BTN and aware of the serious impact of the absence of a federal pension scheme on the loyalty & motivation of the staff and on the long term success of the company. The researcher is aware that the “end of service gratuity policy” is not encouraging staff to stay in the company for a long term as they will be always looking for another company offering a high salary to make their end of service higher. The company is spending significant funds on recruitment and staff development but if its staff can’t be loyal also its customer won’t be too.

Since the establishment of the company, 44 employees have left the company: 75% of them have resigned and the other 25% were terminated. The researcher has learned through discussions with the previous staff that one of the common reasons was the instability and insecurity caused by the absence of a federal pension and retirement plans in the country.

Effect of Absence of Pension in UAE (Part 1)

Chapter 1: Introduction

The United Arab Emirates, according to the World Economic Forum (WEF), is the 12th most competitive nation globally for 2014-2015 which puts the country ahead of all the Middle East and North African (MENA) countries (Wilson, 2014).

The UAE is a popular destination for expats and has become an “expats paradise” due to the high salary levels and the zero tax policy. According to the UAE National Bureau of Statistics, UAE’s population has reached 8.2 million in 2011 and the expats account for 88.5% of it. However, the UAE does not offer to its expatriate population any federal pension scheme or retirement plan, this is unlike the other job markets around the world (WEF, 2014).

The 2014 MENA salary survey has demonstrated that UAE people are highly satisfied with the salaries but they are also the least loyal in the region, the rationalization is that loyalty in UAE is less connected with the salary level but more connected with the long-term career opportunities. Consequently, increasing the salaries in UAE may fail to keep expats in the country for long term, but this can be better accomplished with the introduction of a federal pension scheme (Bayt & YouGov, 2013). The majority of companies in the UAE are offering high salaries and attractive packages but they are still having trouble with the foreign employees’ retention and loyalty. Due to this transitory expat culture, many companies are hesitant to implement a private pension schemes for their foreign employees with the absence of a federal one (Wilson, 2014).

The purpose of this research is to study the impact of the absence of federal pension scheme in the UAE on expats’ retention and loyalty in “BTN”, a private company based in Ras Al Khaimah.

This research also intends to focus on the influence of the loyalty and motivation of BTN foreign employees on the long term success of the company. BTN Company therefore presents an ideal example of a UAE firm that is suffering from the lack of a federal pension system in UAE especially for expats as they are the ones who are working in the economy of the country. The private sector already has lower salaries than the public sector and it becomes difficult to keep the employees interested and at a single organization for a longer time period in the absence of very high annual salary rise. 

General Motors and Saturn

Case Study

Saturn: An Image Makeover

Questions for discussion:

Q1: Using the full spectrum of segmentation variables, describe how GM has segmented the automobile market?

GM is a company that produces a lot of car models which are directed towards various segments of the market. A complete structural breakdown is discussed below that provides detailed information about GM’s market segmentation.

Demographic Segmentation:

If one arranges market segments on a demographic basis, one finds that the company basically targets young to middle age customers. It does not distinguish between the gender of its audience and targets both male and female people. The Saturn models are designed to provide a life cycle of vehicles that can follow the history of young people who may be married or not. This means that Saturn models start from compacts and gradually increase in size to offer SUVs for large families. The company targets people with low income as most models are cheaper than the competition and designed to provide people with good experience. Saturn models are available for everyone whether be a salaried person or a person with professional job position.

Geographic Segmentation:

The case study does not mention people of different ethnicities or cultural entities. This means that the company targets the general people that are available in the target market of United States. The company is also targets its models for urban situations such as those found in New York City.

Behavioral Segmentation:

The Saturn brand offers safety, economy and personal experience in their car models. They believe in providing different models for different stages in a man’s life. This business model strongly relies on creating loyalty status with its customers. The company targets this kind of segmentation by providing personal services and offering gradual improvements in its models.

Psychographic Segmentation:

The Saturn brand targets people of a lower social class who are looking to move ahead in the society and occupy a position that offers prestige due to the use of good quality cars.

Q2. What segment(s) is Saturn now targeting? How is GM now positioning Saturn? How do these strategies differ from those employed with the original Saturn S-series?

Targeting :

The company is targeting various customers. These customers include high quality imported car users as well as mid-level income people. The company also targets its loyal customers to change models. It targets young people with compacts, roadsters and sedans. The company also produces luxury SUVs to target people who only have an eye for class and luxury travelling.

Positioning:

The company is set up to offer a new brand by introducing European Opel. GM also constantly attracts people who want to buy imported models. The company has also positioned itself in sports car market by introducing two models of roadster and sports sedan. The brand is now shifting to provide higher quality vehicles that are more costly yet provide better services.

How do these strategies differ from those employed with the original Saturn S-series?

The company is now offering two lines by the name of red and green line. The red line is designed to provide the improved Opel Astra and will take the place of Ion model. The green line is designed to offered car models that are completely based on hybrid technology which are offered at the most cheapest rates in the region.

Q3. What segmentation, targeting, and positioning recommendations would you make to GM for future Saturn models?

Segmentation recommendations:

GM should work more on providing high quality luxury cars for its high end customers. These customers are loyal to the GM brand and this market segment should be given more importance. These luxury models should also be improved by offering more options for sports accessories as well provide various style options.

Targeting recommendations:

GM should move ahead from targeting the mid income market and move towards both the high end customers as well as low income customers. The company profits will definitely improve if the market segmentation and targeting improves and covers different groups of people with different ages and social positions. The company should add more options of comfort, style and sports in its car models to increase its loyal fan base.

Positioning recommendations:

GM must create their own brand name effectively by targeting not only the local but also the global market. It must work to produce a good quality name among its competition. GM should consistently improve its car models by providing more features and offering higher quality.