JOURNAL OF

COMPETITIVENESS STUDIES
(JCS)
Vol. 23, No. (3), 2015 ISSN 2330-4103

TABLE OF CONTENTS
Page
Vision and Mission Analysis of Selected Saudi Organizations ________________________1
Sundaram Nataraja
Mostafa M. Kamel
Zia Ul-Haw Paracha

King Saud Universitys Strategic Plan Formulation (KSU 2030) _____________________13

Salem S. Alnassar Alqahtani

Saudi Telecom Company: Rapid International Investments and Divestments __________38

Abdulrahman Al-Aali
Mostafa M. Kamel

What, Who, How, and Where: Retailing Industry in Saudi Arabia ___________________54
Kokku Randheer
Abdulrahman Al-Aali

To Align or Not to Align the HR Strategy; That is the Question ______________________70

Nisar Ahamad Nalband
Hanan Abdulrahman Alankari

Yatooq: A Saudi Female Entrepreneur Innovates Arabian Coffee ___________________90

Abdulrahman Al-Ali
Sobia Ayub

Saudi Telecom Company: Customer Focus _____________________________________103

Mohammad Almotairi
Soad Almeshal

Copyright 2015 by the Journal of Competitiveness Studies

JOURNAL OF COMPETITIVENESS STUDIES

 JOURNAL OF COMPETITIVENESS STUDIES

Special Issue
Abdulrahman Al-Aali, Guest Editor

Business Cases from Saudi Arabia

I take this occasion to thank all those who have contributed to this special issue of
Competitiveness Studies. I thank the reviewers who provided timely feedback to the authors,
thereby helping to improve the manuscripts. I extend a special thanks to the Editor-in-Chief,
Abbas Ali, for giving me the opportunity to serve as guest editor of this special issue, the first
of two that will feature business cases from Saudi Arabia. I cordially thank all of the authors
who submitted manuscripts for consideration. I appreciate their desire to share their
knowledge and experience with readers and business professors in Saudi Arabia, the GCC
countries, and the Arab World in general. The eight cases included in this issue concern
entrepreneurship, human resource management, international business, marketing, and
strategic management.

I acknowledge and greatly appreciate the funding King Saud University (KSU) provided to
enable the creation of business cases set in an Arab context. They are sorely needed. KSU is
the Arab Worlds premier university. Ranked among the top 150-200 universities in The
Academic Ranking of World Universities, also known as the Shanghai ranking, KSU scores
high in many international rankings. To its credit, KSUs College of Business Administration
took on the challenge of developing cases about issues in Arab businesses specifically to
meet the needs and interests of Arab business students and other readers. This is probably the
largest collection of such cases to date. I applaud KSU and the Business College for initiating
this project. Many individuals participated in this journey from case idea through final
acceptance and delivery. To them all, I say: Thanks for a job well done.

Abdulrahman Al-Aali, PhD

Special Guest Editor

About The Guest Editor

Abdulrahman Al-Aali is a Professor of International Business and Marketing at the College

of Business Administration, King Saud University, Saudi Arabia. He gained his BBA, MBA,
and PhD in International Business at Georgia State University. He is the Director of the PhD
in Business Program and a Visiting Research Scholar at Indiana University in Pennsylvania.
He was a Fulbright Fellow at the George Washington University and former Dean of King
Abdullah Research & Consulting Institute. He was a Trustee of Prince Sultan College of
Tourism & Business and is currently a Trustee of Albaha College of Sciences. He has
authored or co-authored ten books and over 36 academic articles. He has consulted for many
agencies including the United Nations Development Programme, Ministry of Higher
Education, Ministry of Commerce on World Trade Organization issues, and is currently a
consultant with UN-Habitat on the Future of Saudi Cities Program.
 TO ALIGN OR NOT TO ALIGN THE HR STRATEGY; THAT IS THE QUESTION

Nisar Ahamad Nalband, Hanan Abdulrahman Alankari

The test of first-rate intelligence is the ability to hold two

opposed ideas in the mind at the same time and still retain the
ability to function. (Mintzberg, Ahlstrand & Lampel, 1998)

On his first day after joining King Abdullah City for Atomic & Renewable Energy
(KACARE), a semi/Quasi-governmental energy organization, Alim Al-Bishara, the new
manager of Human Resource Recruitment and Manpower Planning was in his office, deep in
thought. He was wondering whether KACARE planned to adopt new human resource
practices or stick with its antiquated HR practices.

With recruitment already underway, Al-Bishari did not know if HRs top-level leadership
had considered how best to align KACAREs staffing practices with the organizations
culture and ethos. At times he wondered if there was any selection strategy at all. In his
welcome note, KACAREs President had said, We will transform Saudi Arabias energy
industry and we expect every employee to support that vision. That was a fine statement, Al-
Bishari thought, but was it specific enough to guide future HR practices and meet
KACAREs ambitions?

INTRODUCTION

The deployment of diverse energy sources, including renewable energy options, is

intensifying around the world. Multiple environmental, energy security and economic
considerations drive such endeavors. In fact, the world is progressively undergoing a
transition from a hydrocarbon-based economy to one based on sustainable forms of energy
(Al-Saleh et al., 2008).

Energy mix projections for 2050 show that growth rates will be highest for renewable energy
sources. In absolute terms however, fossil fuels (coal, oil, gas) will remain dominant up
through 2050 (Al-Saleh et al., 2009). While Saudi Arabia is undoubtedly one of the worlds
major oil exporters, how long it can maintain that position is unknown, given that oil is a
limited natural resource. Apart from matters of supply, the evolving diversification of

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alternative energy sources also affects market price. As the Government of Saudi Arabia has
stated, Oil has been the main domestic economy bill payer in the country since the early
1930s until today, so whenever oil prices decline, the government faces a deficit. Saudi
Arabian General Investment Authority

Energy scenarios includes different sets of assumptions about how robust possible future
energy developments may be. They provide a framework for the systematic exploration of
alternative energy approaches; that is, for possible combinations of various energy options for
Saudi Arabia and for the world.

In a visionary response to these circumstances, King Abdul Aziz has created KACARE, a
prestigious project that will address Saudi Arabias energy future. KACARE currently has
265 employees, and has launched an intense effort to recruit additional highly-skilled staff.
Table 1 provides present staffing details.

TABLE 1: KACARE EMPLOYEE DETAILS

No Staff Level % of employees employed
1 Top Level 14
2 Middle level 22
3 Professionals 53
4 Bottom level 11
Total 100 %

Source: KACARE, HR Department.

BACKGROUND

Saudi Arabia's population, including resident foreigners, will reach an estimated 58.6 million
in 2050 (see figure 1). Until the 1960s, most of the population was nomadic or semi nomadic.
Today, due to rapid economic and urban growth, more than 95 percent of the population
resides in cities and urban areas.

In 2012, Saudi Arabia was the world's largest producer and exporter of total petroleum
liquids, the world's largest holder of crude oil reserves, and the world's second largest crude
oil producer behind Russia (US Energy Information Administration, USEIA). It is also the
Middle Easts largest petroleum consumer, particularly for transportation and power
generation. The economic boom resulting from historically high oil prices and large fuel
subsidies has also spurred domestic consumption growth. In 2009, Saudi Arabia was the
world's 13th largest consumer of total primary energy, of which roughly 60 percent was
petroleum-based, with natural gas accounting for most of the rest (USEIA).

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 FIGURE 1: POPULATION OF SAUDI ARABIA

80
70
60
Population (million)

50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12

Source: Al-Saleh, et al., 2008.

The country has set a goal of producing nearly half of its power from renewable fuels by
2020 in order to meet domestic power needs and to free up oil and natural gas for export.
Without such a change, Saudi Aramco's CEO Khalid al-Falih has warned that rising domestic
energy consumption could reduce crude oil exports by three million barrels per day (bbl/d) by
the end of the decade (USEIA).

The rapidly growing population places ever-increasing pressure on the countrys non-
renewable hydrocarbon resources. It was therefore decided that alternative, sustainable, and
reliable sources of energy for generating power and producing desalinated water should be
introduced to reduce domestic consumption of the nations fossil fuel reserves. It was also
determined that a balanced energy mix of alternative and conventional energy is strategically
important to Saudi Arabias long-term prosperity, energy security, and its leading position in
the global energy market (KACARE, 2014).

This new energy policy reflects Saudi Arabias population growth, as well as its economic
growth. Once dominated by trade, Saudi Arabias economy has developed robust
manufacturing and service sectors which account for increased domestic and corporate
energy consumption. Such population and industry growth require alternative energy sources
despite having the worlds largest useable petroleum reserves.

ABOUT KACARE

Founded by King Abdullah, who is leading Saudi Arabia into the modern high technology era
while keeping its traditional values intact, KACARE was established by Royal order A/35 in
April 2010 with the fundamental aim of building a sustainable future for Saudi Arabia by
developing a substantial alternative energy capacity fully supported by world-class local
industries. By 2032, KACARE plans to meet fifty percent of the Kingdoms demand for
electricity and desalinated water with sustainable forms of energy.

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Realizing this ambitious vision in a sustainable fashion will require the development of a
local, competitive alternative energy industry that deploys world-class national human
capital. The development of a sustainable energy sector in the Kingdom will give rise to high-
value national job opportunities, requiring various skills and expertise, as well as a
determination to contribute to the sustainable development of the Kingdom of Saudi Arabia,
the organization promises to be the nucleus of a new and promising industry in the Kingdom
and will lead its manufacturers, developers and investors to create tens of thousands of job
opportunities.

Energy Sustainability for Future Generations

Saudi Arabia is a dynamic nation facing increasing demand for energy and desalinated water
as the nations population grows and the utilization of low-priced electricity and desalinated
water accelerates. According to government estimates, the Kingdoms demand for electricity
is expected to exceed 120 GW in 2032. Unless alternative energy and energy conservation
measures are implemented, overall fossil fuel demand for the power, manufacturing,
transportation, and desalination industries is estimated to grow from 3.4 million barrels of oil
equivalent per day in 2010 to 8.3 million barrels of oil equivalent per day in 2028.

To build an energy program that can meet a considerable portion of this growing demand
and preserve the Kingdoms oil and gas resources well into the future, KACARE must
develop the necessary technical knowledge, skills, and expertise to build a balanced mix of
economically viable, technically feasible, and sustainable atomic and renewable energy
sources.. By doing so, Saudi Arabia is recognizing its vital role as a respected major supplier
of energy globally while also ensuring the long-term prosperity and energy security of the
Kingdom.

No country has previously proposed a sustainable energy mix as comprehensive as the one
KACARE is currently moving to implement. KACARE examined a number of key factors
relative to the economic viability of its proposed activities. They include a reduction in peak
demand by enhancing energy efficiency and energy conservation; the benefits to be derived
from conserving fossil fuels; generation-related matters such as load management
technologies and an understanding of their limitations; the potential for building human
resource capacity; international product chains and the Saudi role in the alternative energy
sector; and deriving the maximum benefit for the local value chain.

Detailed research indicates that the introduction of alternative energy sources will ensure a
marked reduction in the utilization of oil for power generation and water desalination, thus
ensuring longer-term availability of hydrocarbons for export and utilization as feedstock in
national industry. The economic viability of the renewables sector becomes increasingly
evident given Saudi Arabias year-long high solar intensity, the potential utilization of
geothermal and wind resources, and the conversion of waste to energy all of which have
minimal environmental impact. Such renewable resources are, however, subject to fluctuation
in supply and thus it is recognized they are best used in combination at times of peak demand
whereas the other alternative, atomic energy, can provide an uninterrupted and mature source
of electricity throughout the year. To meet the required demand, KACARE is recommending

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the gradual introduction of renewable and atomic energy, with the goal of fifty percent of all
electricity generated from non-fossil fuels by 2032.

In carrying out its activities, KACARE will ensure the highest standards of transparency,
safety, and security, and will comprehensively implement every possible safeguard to protect
all stakeholders. To achieve these ends, regular consultation with countries that have
considerable alternative energy experience will ensure the transfer of knowledge and
information on industry best practices necessary to help KACARE develop, sustain, and
enhance the local value chain.

In seeking to lead the way in renewables innovation and contribute to national economic
development, KACARE will also create job opportunities for Saudi nationals and enhance
their skills and expertise. To these ends, KACARE will invest significantly in research,
technology and developing human capital through education and training in Saudi Arabia
and overseas, thereby ensuring an on-going transference of knowledge to the Kingdom.

Throughout its implementation of atomic and renewable energy programs, KACARE will
maintain close cooperation with all stakeholders through direct and indirect communication
to raise awareness of all aspects of the activities being undertaken and especially to overcome
any concern or hesitancy about the enterprise among the general public.

KACARE PROGRAMS

Sustainable Energy

The world depends on energy and is moving inexorably toward sustainable alternatives to
fossil fuel, as oil and gas are a non-renewable resource. Saudi Arabia has the vision and
drive to ensure the introduction of renewable sources of energy. To provide a sustainable and
efficient energy future for the Kingdom, KACARE will develop a sustainable energy mix
taking into account the economics of the hydrocarbons saved; electricity and water demand
patterns; technology choices; regulatory and physical infrastructure requirements; human
capacity development; and value chain enhancement.

To maximize sustainability, KACARE has undertaken a comprehensive analysis of

sustainable energy resources to ensure that Saudi Arabia derives maximum benefit from
them. This has led to the conclusion that, while hydrocarbons will remain a prime element in
the likely energy mix in 2032, fossil fuels should be supplemented with nuclear, solar, wind,
waste-to-energy, and geothermal energy, in accord with the following projections: Table 2
below outlines target production levels for all energy sources, once the full array of
alternative energy capabilities comes online.

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 TABLE 2: ALTERNATE ENERGY PRODUCTION

No Type of energy Target Production Levels

1 Hydrocarbons 60GW
2 Nuclear 17.6GW
3 Solar 41GW
4 Wind 9GW
5 Waste-to-energy 3GW
6 Geothermal 1GW

In this scenario, nuclear, geothermal, and waste-to-energy will provide the base load up to
night-time demand during winter; photovoltaic energy will meet total daytime demand year
round; concentrated solar power, with storage, will meet the maximum demand difference
between photovoltaic and base load technologies; and hydrocarbons will meet the remaining
demand.

In implementing its activities, KACARE plans to pursue a transparent and open market
policy to make developers comfortable with the processes involved and ensure competitive
pricing. The ultimate aim is to form comprehensive partnerships with local and international
stakeholders to develop atomic and renewable sectors; this will include energy conservation
and energy support services, such that 60 percent of all nuclear energy development inputs
and 80 percent of all solar-related inputs will be sourced locally.

Atomic

Atomic Energy is a reliable, clean, and mature energy source with an exemplary safety track
record. It widely used around the world, meeting roughly 16% of world energy demand,
while requiring only small amounts of fuel to generate huge amounts of energy. Nuclear
plants neither pollute the atmosphere nor generate much waste, and contrary to traditional
wisdom, there is absolutely no possibility that a nuclear plant can explode.

KACARE has been in direct communication with the International Atomic Energy
Agency (IAEA) and with nuclear energy regulatory bodies in other countries, as it undertakes
atomic energy planning for Saudi Arabia. According to the IAEA, there are 433 nuclear
reactors presently in operation in 30 countries across the globe, with 65 new reactors under
construction, 16 of which are in Asia, and more than 400 planned or proposed worldwide,
including two within the GCC. Plans for the closure of existing nuclear plants in Spain and
Japan were reversed during 2012.

Among the major benefits of atomic energy will be the creation of high-value-added jobs,
the establishment of nuclear technology competencies, and the development of technical
leadership amongst Saudis in the years leading up to 2032. Additionally, atomic energy will
be a strong enabler of industrial development well into the future, including the development

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of atomic engineering and research capacity, atomic reactor technology, and fuel cycle
research and development. Other applications in the fields of medicine, agriculture, minerals,
and water desalination are also anticipated.

Furthermore, a comprehensive understanding of the safety culture is essential for the nuclear
industry and it will be instilled, not only among KACARESmployees, but also among the
population in general, in order to overcome whatever concerns the public may have.

Renewable Waste to Energy

Presently, a considerable portion of all solid waste in Saudi Arabia is placed in landfill sites,
even though the Kingdom has an active recycling initiative. While waste-to-energy plants are
unglamorous, KACARE considers them a crucial tool for reducing dependence on landfills
and the related problem of ground and air pollution. The waste-to-energy technology is
mature and also clean. The choice of a particular waste-to-energy technology will be wholly
central to the economic viability of this process, and KACARE sees innovation opportunities
that would position the Kingdom to take the technology forward. KACARE therefore
recommends the generation of 3GW of electricity from waste by the year 2032.

Wind

Wind is an environmentally friendly source of renewable energy generation and is widely

perceived as a key solution in the fight against climate change. As a result, its use is
increasing markedly across the globe, especially in China, India, Brazil, and Mexico.

KACARE is pursuing the installation of wind turbines, bearing in mind that fundamental to
their efficiency is their location. In Saudi Arabia, it is likely that wind turbines will be
installed along the Red Sea and the Arabian Gulf coasts, with the recommended aim of
generating 9 GW of electricity by 2032, to be used primarily for seawater desalination and
the conversion of brackish water to potable water. Given that wind availability is
unpredictable, it is anticipated that wind energy will be most useful in combination with other
renewable energy sources.

Wind turbines are undergoing continuous technological evolution to enhance their

efficiency. Consistent with its open market approach, KACARE will work in partnership
with stakeholders to undertake research and development, develop related national industries,
and educate and train Saudi nationals in the technology, skills, and expertise of wind energy
and turbines in the Kingdom.

Geothermal

Geothermal energy is generated from natural underground heat. It is environmentally clean

and safe, not subject to fluctuations in use, and can be used around the clock throughout the
year. It is a prime source of energy generation in a number of countries around the world,
usually in volcanically active locations, such as Iceland and New Zealand. Volcanic activity
in Saudi Arabia is limited but nevertheless sufficient for utilization of geothermal plants
alongside other energy sources.

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 Geothermal energy can be generated in one of three ways: Dry Steam, Flash Steam, and
Binary-Cycle. KACARE will pursue the first of these methods, driving pipes deep into the
earth in order to generate steam to drive turbines that will generate electricity. As geothermal
technologies develop, KACARE will work with stakeholders in Saudi Arabia to pursue
additional opportunities that arise to make the sector increasingly economically viable. The
target installed capacity for geothermal energy is one GW by 2032.

Solar

The Kingdom is blessed with plentiful sunlight throughout the year, and has one of the
highest insolation rates in the world. As a result, a major plank of KACAREs renewable
energy program will be the implementation of clean, cost-effective solar energy technologies
with the aim of helping to meet peak demands, especially during the summer months, by
recommending installed capacity to generate a total of 41 GW by 2032. Under consideration
are two forms of solar energy Photovoltaic (PV) and Concentrated Solar Power (CSP).

Photovoltaic (PV)

Photovoltaic cells assembled into panels enable sunlight to be converted directly into
electrical energy. These panels can be amassed in fields for direct connection to the national
grid using inverters that convert the solar power into grid-compatible alternating current. The
recommended aim is for KACARE to have installed sufficient Photovoltaic capacity by 2032
to be able to generate 16 GW of power.

The PVs real benefits are its simplicity, convenience in construction, reliability, maturity,
and cost-effectiveness once in operation. KACARE therefore anticipates that the Kingdom
will rely on solar power to meet a significant portion of its alternative energy requirements.
PV panels have been constructed over the years using crystalline silicon, but thin film cells
are now playing an increasingly important role. KACARE seeks to partner with local and
international stakeholders in the development and manufacture of thin film photovoltaic
panels, while also transferring technical capabilities and skills to Saudi citizens.

Concentrated Solar Power (CSP)

The basic principle of CSP, or solar thermal power, is the use of reflector systems to direct
solar radiation onto a receiver, frequently atop a solar tower. The concentrated radiation is
then transformed into thermal energy for conversion into electricity through the use of
turbines. Alternatively, it can be used for desalination and industrial applications. This system
also allows for storage of the thermal energy generated so the system can be used for power
generation at night.

CSP technology is as yet immature but is undergoing very rapid development. KACARE
and its stakeholders aspire to establish a niche market for Saudi Arabia in this sector through
technology transfer, research, new product development, and training to develop a highly
competent Saudi workforce. Over time, KACARE will establish fields of CSP mirrors and
receivers across the Kingdom, improving the cost effectiveness of this technology as new

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developments are introduced. By 2032, it is anticipated that CSP will account for 25 GW of
electricity generated.

In establishing solar energy, and especially CSP, potential exists in the years to come for
KACARE to connect with similar facilities being installed in North Africa that seek to supply
energy to Europe at certain times of the year.

PARTNERS

Corporate Partners

From the start, KACARE has sought to partner with local and international businesses in all
aspects of its activities as progress is made towards implementation of every facet of its
ultimate energy objectives. Thus, prominent local and foreign engineering consultants have
been directly involved in developing the Master Plan for the proposed Sustainable City. As
progress is made towards implementation of the Plan, local and overseas developers,
contractors and engineers, working alone or in partnership, will be sought to participate in the
business opportunities that arise.

Over time, KACARE also plans to consult with local and international companies in the
atomic energy sector. There also will be substantial construction and materials supply
opportunities for Saudi businesses; KACARE foresees 60 percent of all inputs being obtained
locally.

As part of KACAREs interest in the development and growth of the sustainable energy
sector, consideration is also being given to introducing a Dialogue with Professionals
Forum, which will eventually have its own online interactive portal.

Educational Institutions

To inspire the new generation and to ensure comprehensive human resource

development, KACARE also has developed detailed educational plans that foresee
sponsoring students and providing scholarships at multiple universities, including King Fahd
University of Petroleum and Minerals in Dhahran; King Abdullah University of Science and
Technology at Thuwal, north of Jeddah; King Abdulaziz University in Jeddah; MIT in the
USA; and at other top educational establishments around the world, some of which are
expected to partner with KACARE. Moreover, KACARE has signed cooperation agreements
with leading international institutes, such as the Fraunhofer-Gesellschaft Institute in Tokyo; it
is in the process of finalizing similar agreements with other institutions.

Mishkat

Mishkat Interactive Center for Atomic and Renewable Energy is a not-for-profit Science
Discovery Center established by KACARE. The Mishkat mission is to support the
Kingdoms overall energy plans by engaging with the general public about the importance of
energy in daily life, educating todays Saudi youth about atomic and renewable energy, and
inspiring them to become tomorrows energy innovators.

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 Mishkat is the first center of its kind globally, as it is focused solely on energy, both
conventional and non-conventional. It is a full member of the American Association of
Museums, the Association of Science and Technology Centers, and of Ecsite, the European
Network of Science Centers and Museums.

Regulators and Primary Organizations

In pursuing its activities, KACARE fully recognizes the role of both national and
international regulators and other groups, be they socially, economically, or directly related to
the energy sectors in which KACARE is becoming involved.

National: KACARE looks to the Council of Ministers, the Shura Council, and to relevant
Ministries and other government agencies for help and guidance.

International: KACARE liaises with the International Atomic Energy Agency (IAEA),
the International Renewable Energy Agency (IRENA), and with the governments of those
countries closely involved in nuclear power generation.

Investment: KACARE works with the Saudi Arabian General Investment Authority, the
Royal Commission for Jubail and Yanbu, and the Saudi Basic Industries Corporation
(SABIC).

Water: KACARE cooperates with the Saline Water Conversion Corporation.

Electricity: KACARE receives support from the Electricity and Co-generation Regulatory
Authority (ECRA) and the Saudi Electricity Company.

Other oversight bodies: When these groups are formed, KACARE will liaise with them
on a mutually beneficial basis.

Employees

KACARE is an equal opportunity employer with a corporate culture that attracts talented
individuals and inspires them in pursuit of their day-to-day activities. KACARE expects to
assume a significant and critical role in the future of Saudi society as a whole, and will seek
to ensure that every member of its team appreciates the role of KACARE and his or her
individual responsibility in making the future a better place.

The Community

As the earth passes through a period of climate change and global demand for energy and
water continues to grow, there is a major need to innovate and to introduce new energy
technologies, as no single source of energy can meet growing world demand.

KACARE seeks to ensure the safety, security and safeguarding of the Saudi people when
introducing new technologies, especially in the nuclear sector. The ultimate aim of KACARE
is for every member of the population both now and in 50 years time to be a beneficiary of

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King Abdullahs vision and the efforts of all those involved in introducing, developing and
growing the countrys sustainable energy resources, with many individual Saudis also
expected to participate in this effort as managers, employees, contractors or suppliers.

Public Protection

Under the terms of the proposed National Policy Statement, electricity generated from all
sustainable (atomic and renewable) energy sources will be subject to regulation by the
Electricity and Co-generation Regulatory Authority (ECRA). All other regulatory elements
of the atomic and renewable energy sectors will fall under the jurisdiction of KACARE,
according to the Kingdoms atomic and renewable energy laws (proposed by KACARE and
promulgated upon ratification by the Council of Ministers), along with implementation of
those regulations. The Atomic Energy Law will be fully consistent with the guidelines
specified by the International Atomic Energy Agency (IAEA).

Research Development and Innovation

As part of KACAREs mandate, its main role is to develop and deploy a sustainable energy
mix for the Kingdom that will include both renewable and nuclear energy.

KACARE differs in strategic intent from universities and industry. Universities typically
conduct basic research funded by grants, while industrial R&D is largely financed by private
enterprise and driven by commercial goals and targets. KACARE seeks to bridge these two
domains by facilitating basic research with the potential to meet national needs, while also
facilitating commercialization.

Projects

Nuclear Holding Company (NHC).

This will be a credit-worthy and independent entity, in-charge of building and

operating nuclear power plants in the Kingdom.
The NHC will be the private sector arm of the Kingdom in designing and operating
nuclear power plants and research reactors in the Kingdom, which aim to localize
60% of its nuclear value chain.

Renewable Resource Monitoring and Mapping (RRMM) Program.

The project will be carried out in cooperation with U.S.-based National Renewable
Energy Laboratory and Battelle Memorial Institute to evaluate the potential for solar,
wind, geothermal, and waste-derived energy. The findings will be used to establish
an online Renewable Resource Atlas that will form the basis for implementing future
renewable energy projects, primarily for the production of electricity and water
desalination. The Atlas will also support other functions such as research to develop
technologies tailored to the unique climate in various regions of the Kingdom.

Studying the Impact of Introducing Sustainable Energy on the Saudi Arabian Energy
Grid.

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 The primary objective of this project is to maximize the synergy between different
stakeholders strategic planning regarding the development of the electricity networks
in the Kingdom. In addition, to anticipating the impact of introducing the sustainable
energy-mix and collaboratively work with stakeholders to craft an execution plan to
serve the national strategy and support its applications.

HR FUNCTION

The KACARE organization comprises people from government, semi-government

organizations, and the private sector. Figures 2 and 3 depict the current personnel structure.
Government employees mostly occupy top management. Additional employees are recruited
from among both natives and foreigners. KACARE has only one branch office in Vienna
with one employee working to build the collaborations between KACARE and other
countries

According to the HR assessment completed by KACAREs HR strategy and policy

consultant, the organization is facing recruitment, restructuring and reengineering
challenges.

The HR department is presently involved in running the organization-building process that

is, the HR department is building all KACARE processes and procedures.

The most important task facing HRs recruitment department is to recruit 300 more
employees by 2015. There are currently just 12 employees in the HR department, including
the General Manager, Khaled Al-Zahrani. KACARE operations are at present being run
based on procedural guidelines developed by HR. KACAREs overall structure and the
structure of its HR operation, in particular, are both currently undergoing transformation,
according to KACARES HR policy consultant.

The overall structure of KACARE in general and HR structure in particular are both
undergoing changes the changes suggested are under consideration according to the policy
consultant of KACARE.

The most pressing task facing the Human Resources General Manager (GM-HR) soon after
taking the position two years ago was to set up the HR department as quickly as possible. He
started by recruiting HR Department personnel and establishing all departmental services,
including Recruitment and Manpower Planning, as well as Training and Development.

After establishing the HR department, GM Khaled Al-Zahrani convened a full-fledged

meeting and asked all staff members to present their views on how best to build KACARE.
He made clear that staff had to take present circumstances into account. KACARE has not
yet decided on a business strategy, he said, but many of its business projects have already
been approved. That shocked some of the departments junior members, who wondered how
the Department would formulate and align HR strategy with a business strategy that had not
yet been decided.

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 Al-Zahrani smiled, and then continued, emphasizing the importance of KACARE. It is one
of the Kings dream projects, as it is going to significantly change the countrys
development.

The first to reply came from Omar Al-Ghamdi, the Training and Development manager. I
feel that going forward, we should fulfill short-term objectives, rather than set and follow
long-term objectives. Until the business strategy is approved, I will plan to provide training
that helps create a homogeneous, uniform KACARE culture, since the people KACARE hires
will have diverse backgrounds, skills, and experiences.

Then Al-Bishara, the Recruitment and Manpower Planning manager spoke. And I will look
for homogeneity as much as possible among our employment candidates, he said. So at this
point, I think centralized recruitment would work best for KACARE.

But I have another question, he added. Maybe we need to think about the kind of culture
we need to build at KACARE, our own culture?

Of course we can, Al-Ghamdi said, after we establish a common culture to adapt to

because we must make some of the employees to give up their thumb rule practices, some of
the employees to switch a bit slow pace to get adjusted with the other employees to bring the
balance among all employees in achieving the common goals of the organization without
disappointments, homogeneity in the organization. Then well train the employees based on
our training needs analysis and each employees Individual Development Plan.

Al-Bishara kept the rest of his thinking to himself. In the absence of conducting a Job
Analysis and a Job Evaluation, and without being able to align KACAREs HR strategy to a
company business strategy, he wondered, how can we develop an HR strategy that fits the
business strategy and how can these people fulfill the Kings dream for the country?

Next morning, filled with doubt, Al-Bishara entered the HR General Managers office. Al-
Zahrani welcomed him with a smile. As the recruitment manager was thinking about how to
express his doubts, Al-Ghamdi rushed in and said, Boss, one guy was appointed as secretary
three days back without our knowledge by one of the top level employees. Do you want me
to ratify the appointment or--?

These are the kind of problems that are going to develop when we have no strategy and no
guidelines, interrupted Al-Bishara, who could no longer control his frustration with how
haphazard the selection process seemed.

We have guidelines, Alim, The HR General Manager replied. But we also have some
urgency. Now, if you dont mind, shall we meet some time later?

Coming out of the GMs office, Al-Bishara was again deep in thought. With KACAREs
business strategy not yet approved, what guidelines can we rely on to help us make
decisions? And how can KACARE and especially those of us in HR - cope with such
uncertainty?

82
 The ambiguity was worrisome. Continuing to think about the meeting as he drove home, Al-
Bishara suddenly had an idea. He had just completed his MBA two years earlier. Perhaps he
could find his thesis, which had actually been about strategic human resource management.
He would re-read it that night and hopefully return to work tomorrow with a clearer head,
and some good ideas.

FIGURE 2: KACARE CURRENT STRUCTURE, 2014

President

Investments &
Business

Vice President for

Vice President Renewable Energy RDI
Affairs

Project & Renewable PMO

Technical Affairs Energy Team IT

Property &
Strategy Team
Atomic Energy Legal
Assets Mgt
International
Bolentino Sustainable Grid PR Relation
Cooperation Integration
Project
HR Senior Advisor

Procurement

Administrative
Service
Financial and
Finance & Administration
Accounting

Source: KACARE

FIGURE 3: KACARE HRM, 2014

HR GM

Recruitment &
Training & Manpower Employee Service &
Development Dept. Planning Dept. Payroll Dept.

Source: KACARE

83
 Strategic Human Resource Management: A Literature Review

By Alim Al-Bahiri

Since human resources strategist James Walker first called in 1980 for HR directors to
consider the organization's business strategy in the development of HR plans, the literature
and practices in this regard have echoed his thinking.

The impact of globalization and highly competitive markets has undoubtedly caused HRM to
take on a more strategic role in the organization and management of human resources
(Lundy, 1994). Similarly, the new positioning of HRM as Strategic HRM (SHRM)
emphasizes the integration of HR practices with business/corporate strategy. To achieve
strategic integration, it is anticipated that all key HRM activities, e.g., recruitment, selection,
training and development, should be similarly integrated, vertically and horizontally aligned,
with their strategic imperatives (Wright and McMahan, 1992). Strategic human resource
management practices and the competitive advantage of an organization reflect its effective
implementation of human resource practices (Othman, 2009).

Prior to the more recent emphasis on and pleas for strategic integration, organizational
recruitment, selection, training, and development remained relatively unchanged, having
evolved into a relatively standardized approach frequently labeled as traditional (Storey,
2001).

Holbeche (2001) asserts that recruitment should not be simply a question of filling gaps but
should focus proactively on bringing into an organization the skills and experience which
cannot be built from within. Undeniably, effective recruitment and selection are critical to
success of the organization. Similarly, HR teams are often criticized for developing training
and development strategies that do not match business priorities.

The lack of integration between human resource management (HRM) and strategic business
planning (SBP) processes is increasingly acknowledged as a major source of implementation
failure. It is often alleged that companies develop strategic plans based on extensive
marketing and financial data but neglect the human resource requirements necessary to
successfully implement those plans. Accordingly, there is now greater recognition in the
strategic planning literature of the need to consider implementation feasibility during the
strategy formulation stage itself (Tichy, 1983). HR should consequently play a key role in
strategy formulation.

In the present case (KACARE) the recruitment challenge is one of the key issues More
specifically, KACARE will require workers with a variety of competencies construction,
operations, production, management, technology research and development, data analytics
and financial analysis, etc. - in KACAREs target energy areas: nuclear, wind, solar,
geothermal, etc.

Given the worlds fluctuating economy and energy environment, the organization requires
maximum flexibility. It therefore needs workers throughout all levels of the organization who
are willing to remain flexible and learn new skills

84
 Failure to articulate a business strategy that prioritizes the organizations target energy
sources, production levels, geographic areas, and markets will prevent HR from recruiting the
appropriate personnel and achieving its production targets and overall business goals.

Without such a strategy, HR probably has two options, to recruit a workforce with general
skills in case specialist are not available and hope for the best, or perhaps to identify an
already successful, multi-dimensional energy conglomerate like Australias energy agency,
and take it as a bench mark.

Most of the writings advocating greater integration between HRM and SBP take either of
two predominant approaches. One group of authors envisions a somewhat reactive role for
the HR function, viewing organizational strategy as the driving force determining HR
management strategies and policies. These authors have concentrated on developing specific
HRM strategies to fit identified business objectives (Ferris, et al. 1984; Smith, 1982; Walker,
1980, 1981). They contend that HR systems such as selection, training, and compensation
should be tailored to match the company's growth objectives and product life cycle stages. A
second group of authors has suggested that HR should also play a more central and proactive
role by becoming involved in the strategy formulation process itself (Alpander and Botter,
1981; Dyer, 1983, 1984a, b; Lengnick-Hall, 1984, 1988; Tichy et al. 1982).

Despite this debate, emphasis in practice has increasingly been placed on the concept of
flexibility in Strategic HRM (Kerr & Jackofsky, 1989; Lengnick-Hall, 1988; Milliman et al.,
1991). Strategic HRM researchers advocate that in the current complex and dynamic
environment, organizations require flexibility to adapt to diverse and changing requirements
(Snow & Snell, 1992). From this perspective, Strategic HRM is primarily concerned with
developing the organizational capability to adapt to changing environmental contingencies
(Snell et al., 1996).

Organizational flexibility stems from the availability of a vast repertoire of behavioral scripts
among employees. Flexibility is necessary so that existing practices can be altered in
response to non-transient changes in the environment (Weick, 1979). The firm must possess a
repertoire of novel scripts among organizational members that allows them to recognize and
accommodate ecological changes. Weick refers to this as a two-choice process. The
"interpretation choice" consists of asking the question, "Knowing what I know now, should I
change the way I label and connect the flow of experience?" in order to determine whether an
individual should revise how they have interpreted a given situation. The second choice is the
"enactment choice," where individuals ask the question, "Knowing what I know now, should
I act differently?" in order to determine if one should revise the behavioral responses that
create or respond to change (Patrick M. Wright, Scott A. Snell, 1998).

85
 TABLE 3: STRATEGIC HRM INDICATORS OF RESOURCE AND
COORDINATION FLEXIBILITY

Strategic HRM Component Resource Flexibility Coordination Flexibility

Practices Applicability of Practices Malleability of Practices across

Rigidity of Application Jobs, etc.
Across jobs, etc. Speed of Feedback on Practice
Impact

Employee Skills Individual Skill Breadth Variety of Skills in the

Ability to Acquire New Workforce
Skills Ability to Acquire Diverse
Skills from Contingent Workers

Employee Behavior Rigidity of Script Complementarity/Conflict

Application between Scripts of Different
Groups

Source - Patrick M. Wright, Scott A. Snell; Toward a Unifying Framework for Exploring Fit and Flexibility in
Strategic Human Resource Management, Center for Advanced Human Resource Studies (CAHRS) at
DigitalCommons@ILR. It has been accepted for inclusion in CAHRS Working Paper Series by an authorized
administrator of DigitalCommons@ILR.

Business Strategy and HRM Integration (Pawan Budhwar and Samuel Aryee, 2008)

Greer (1995) talks about four possible types of linkages between business strategy and the
HRM function / department of an organization:

Administrative linkage refers to a situation in which there is no HR department and

some other figurehead (such as the Finance or Accounts executive) looks after the HR
function of the firm, relegating HR to a paper-processing role. In such situations, there is
no real linkage between business strategy and HRM.

One-way linkage refers to a situation in which HRM functions only during

implementation of the business strategy.

Two-way linkage refers to a more reciprocal situation in which HRM is involved not
only during implementation of the business strategy, but also at the corporate strategy
formation stage.

The last kind of association is that of integrative linkage, in which HRMs involvement
in business development is equivalent to the involvement of other organizational
functional areas..

Purcell (1989) presents a two-level integration of HRM into the business strategy upstream
or first-order decisions and downstream or second-order decisions:

86
 First-order decisions, as the name suggests, mainly address issues related to
organizational mission and vision. These decisions emphasize where the business is
going, what sort of actions are needed to guide a future course, and broad HR-oriented
issues that will have long-term impact.

Second-order decisions deal with scenario planning at both strategic and divisional levels
for the next 35 years. These are also related to hardcore HR policies linked to each core
HR function (such as recruitment, selection, development, and communication).

MOVING FORWARD AT KACARE

One week later, the General Manager called the Manager - Recruitment and Manpower
Planning into his office. Have your best researcher clear his desk, Al-Zahrani said. Over
the next two weeks have him analyze and document the history of HR practices at the worlds
three largest and most successful energy corporations. Then three weeks from today, bring
me your recommendations for KACAREs short-term and long-term HR objectives. We will
need to review your recommendations quickly, so that we can start HR implementation the
first of next month, he concluded. And please, close the door on your way out. ------you
can delete this

One week later the General Manager called the Manager Recruitment and Manpower and
said the big boss wants us to present our human resource department plan of action I need to
review your recommendations both of short term and long term

Alim Al-Bishara was glad he had done his homework. At least he had a theoretical
framework to help him think through some of the issues. The question would be, How does
all that apply to KACARE? But still, he felt relieved. He had a deadline and a clearly
articulated workplan. That was the best he could hope for, but it was enough.

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www.kacare.gov.sa/en/

Dr. Nisar Ahamad Nalaband completed his PhD in Management with specialization in
Human Resource Management, and has Masters degrees in both Human Resource
Management and Law from India. Prior to becoming Associate Professor of Management at
King Saud University, Dr. Nalaband worked in various academic and administrative
positions and was the director for Private and government of the Andhra Pradesh
organization. His research interests are Human Resources Management, Human Resources
Development, Corporate Social Responsibility, and Innovation Management.

Ms. Hanan Al-Ankari is a lecturer and the Deputy Chairperson of the Department of
Management at King Saud Universitys College of Business Administration. Al-Ankari
received both her BS in Business and MBA with honor from King Saud University. She has
research interests in Human Resources Management and Development, and Corporate Social
Responsibility.

89
 AMERICAN SOCIETY FOR
COMPETITIVENESS
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