Managing labour in multinational corporations in Saudi Arabia

This qualitative research explores how formal and informal institutional structures shape HRM practices of a Japanese MNC operating in Saudi Arabia. The analyses in this research are mainly derived from neo-institutionalism theory and comparative institutionalism. The empirical findings from the in-depth case study show a complex reality that consists of Japanese HRM practices that are highly influenced by the Saudi institutional structure. The company did not transfer all of its HR practices from Japan, rather it has amended and developed its practices while operating in Saudi Arabia relying on host-country HRM specialists. Since the firm focuses on having long-term employment, it mostly hires Saudi fresh graduates rather than migrants to build its workforce in the subsidiary. The social norm of wasta is widely practiced among host-country employees and influence HRM practices, in particular performance appraisal and promotion.