David Trim January 26, 2013 Florida International University International Business Law Creating and Managing Economic Competitiveness Case Questions How AY Dabbing View Saga’s Mandate Differently from His Predecessor When AY Dabbing became the governor of SAGA due to his successful career in national and international businesses at the age of thirty eight years, he viewed his mandate differently from his predecessors. During this time, he was designated as one of the hundred global leaders in the world economic forum. He took the term global very seriously during his career as Saga’s governor.
His main belief was that liberation of the world economy needed Saudi Arabia to generate business climate that would encourage foreign investors to venture into the country. In his opinion, the prerequisite of this would be achieved through the introduction of the national and international standards that enhance competition to enterprises in Saudi Arabia. Just like his predecessor, the fuzzy mandate and inefficient financial and human resources handicapped AY Dabbing. He also faced a problem of the strained relationships with other government agencies around the world that had developed four years ahead of Saudi Arabia.
To solve these issues, AY Dabbing engaged new strategies of enhancing private-public partnerships. This strategy would help the SAGA agency in carrying out its mission, ambitions, and lobbying campaign of repairing relations with other key government ministries. According to AY Dabbing, this would help in improving the business climate in Saudi Arabia (Harvard Kennedy School, 2008). To accomplish Saga’s mandate, AY Dabbing spent more than three months of his time in office working on the mission, vision, and strategy.
Together with his chief aides and consultants, AY Dabbing embarked on an intensive search of trying to understand and address the toughest issues related to the business environment in Saudi Arabia. In this process, they conducted over 100 interviews with very senior government administrators and international business leaders. They also held over 15 workshops across Saudi Arabia. At the end of this enquiry, AY Dabbing and his consultants compiled about 100 possible initiatives and roles for the SAGA agency.
Out of this, they applied five-pronged test of attracting investors in the country. He gave priorities to projects that would generate the highest economic impacts and that are cost effective. How AY Dabbing Expects To Leverage and Rearrange His Available Assets to Create Public Value The SAGA agency allowed the transfer of staff to other government ministries, but AY Dabbing noun t difficult to replace them Witt vast qualities employees. To attract better talent to SAGA agency, AY Dabbing decided to effectively double the budget for the human resources.
It was not likely that the finance ministry would approve the added funds, but would approve the increased budget on the condition that SAGA would offer high packages to the public and government sectors. Together with human source director, AY Dabbing reviewed the existing staff members and concluded that only a fraction of these members were suited in enhancing the achievement of Saga’s mission. Most of them were below executive level, and the best strategy was to upgrade them. AY Dabbing decided to send some of the employees to training programs in order to improve their skills. He also turned on private sectors for help.
This was by enhancing private-public partnership. Through this initiative, AY Dabbing ensured that private firms in Saudi Arabia would exchange their expertise and human resources with SAGA agency. This would also help in funding the hiring of the highly skilled staffs. Under AY Dabbing governance, SAGA would represent their interests and concerns in various relevant government ministries in Saudi Arabia. Local businesses would also be assisted by the agency by providing them with information on foreign investment opportunities and match them with the foreign investors venturing in Saudi Arabia.
In creating public value, AY Dabbing ventured into a collaborative approach through networked approach. This is by engaging leadership of high private and public sectors in forming SAGA strategy. He obliged almost a half of the government ministries in order to enhance better performance of his agency. Role of Leadership in Saga’s Approach The main role of leadership in Saga’s approach is empowering global economy. The agency has enhanced competitive economy through attracting Direct Foreign Investment (FED).
Saudi Arabia General Investment Authority (SAGA) uses the approach of attracting foreign investors in the country to facilitate in the expansion of the economy (AY-Yah, 2012). Since its establishment in 2000, it was designed to propel the liberalizing of the economy through different targeted measures. Its main responsibility is the management of a better environment for investment. The other approach used by Saga’s leadership is achieving a sustainable and swift economic growth in Saudi Arabia by creating pro-business environment and nurturing investment through a diverse range of services offered to investors.
Saga’s leadership offers brilliant and outstanding business opportunities on various major sectors in Saudi Rabbi’s economy such as ‘CT, transport, energy, and other knowledge based industries. SAGA has also been entrusted with the chore of implementing and formulating policies that enhance local and foreign investment. It issues licenses, documents, and other formalities required by foreign investors to venture in Saudi Arabia. This has allowed investors to acquire visas and other permits in an easier way.
This has made Saudi Arabia an excellent investment destination for foreign entrepreneurs and attracted foreign direct investment. Another sole approach used by SAGA agency is promotion and seeking of international investors. In this case, the major role of SAGA is to market and place Saudi Arabia in the overall position as one of the attractive destinations for the foreign investors. Over the years, SAGA has remained independent by playing the role of facilitating the investment flows and other projects within the country.
This NAS lead to the establishment to economic cities in Saudi Arabia, which are the main locations for the potential investors. Potential Problems in AY Dabber’s Proposed Hiring Arrangement The Saturation hiring arrangement policy proposed by AY Dabbing had potential problems. According to AY Dabbing, the arrangement would help in solving the problem of unemployment in the country. Saturation was the hiring requirement that SAGA required new investors to follow when recruiting. AY Dabbing argued that the arrangement would help in accelerating economic growth as well as creating Jobs for graduates in Saudi Arabia (Detailed, 2009).
The big question about this arrangement is whether economic growth in Saudi Arabia would help in meeting the demand for Jobs. It was also questionable whether people in Saudi Arabia would fill the new Jobs as was predicted by SAGA. Another problem with this hiring arrangement is that the diverse economic development and high reliability of the expatriate labor led to the distortion of the labor market in Saudi Arabia. The majority of people in Saudi Arabia lacked training and skills that were required in higher positions despite their non-attraction to the low skilled Jobs while foreign workers were willing to work for lower wages.
This made most of the employers develop unwillingness to hire people in Saudi Arabia. AY Dabbing was still passionate with creating Jobs for the Saudi. Upon realizing that employers preferred non-Saudi workers, he created public-private partnership and training programs that offered Saudi workers the required training and skills that were needed in the modern Jobs. This posed problems in the Job market because it rated competition for the highest Job opportunities. The Saudi forced investors to hire non-Saudi workers ignored low skilled Jobs.
This hiring arrangement was biased because Saudi workers would gain more than foreign workers because they acquired top Jobs in the country while foreigners acquired low skilled Jobs despite their level of training and skills. How Benefits of Private-public Partnership Outweigh the Costs The benefits of private-public partnership could potentially outweigh the cost in a country. Private-public partnerships help in the transfer of entities and exchange of additional value for money in the economy.
Higher capital at stake motivates private and public entities in providing solutions and mitigating financial overruns while maintaining project values. Value for money in private-public partnership helps in transferring project risks from public to private sectors. The value for money is obtained when project risk is transferred through the private-public partnership outweighs. The private-public partnership project that was postulated by AY Dabbing in SAGA agency yielded high value for money. It resulted in a positive gain to the society, which is a greater achievement than any other alternative procurement.
Private-public partnerships constitute a considerable change in the public and private sectors in a country (Harvard Kennedy School, 2008). The model is made on the basis of benefits derived from the established of mutual relationship based on shared mission, authority, vision, information, decision making, responsibilities, accountability, and financial risks. Another benefit of private- public partnership on how it outweighs cost is that it often covers a long term period. It provides a service provision in about 15-30 years. Arrangements covering such a period are subject to uncertainty.
The requirement for the public sponsors or notations faced by private sectors change over the time of the private-public partnerships and the contract NAS to be changed to retract the new changes. Process can entail higher costs to public sectors and the competitive cost is not determined. Private-public partnership as used by AY Dabbing in creating human resource in Saudi Arabia is a clear demonstration that provides value for money in the economy. Alternatives to Human Capital Development Training need analysis and assessment is an alternative to human capital development.
This is an alternative method that could be used by AY Dabbing in enhancing human resources in Saudi Arabia as results of advancing economic growth (Miller & Coonskin, 2002). Training need analysis is an effective method that depends on knowing what is required by an individual, department, and an organization as a whole. Budget limits and need for effective costs, required that SAGA ensures that the resources invested in training individuals target the areas where development is required and a positive return on that kind of investment is guaranteed.
The modern challenging workplace caused by the emergence of new technologies requires effective training need assessment. The modern technologies re associated with new abilities and skills. Analyzing the training needed is an important prerequisite for the effective training of workers in a country. SAGA should engage in training need analysis because allowing individual training leads to the missing of priority need and even covering areas that are not essential in the Job market.
Training need analysis and assessment will help SAGA in channeling resources in areas where they will highly contribute in the development of employees as well as enhancing the morale and performance of an organization. Since SAGA is an agency that is highly determined to attract direct foreign investment, training need analysis will be the natural way of achieving this goal because it is critical in identifying requirement such as performance, skills, knowledge, and abilities required by SAGA agency.
It also helps in providing the best workforce for both domestic and foreign investors in Saudi Arabia. Effective training need analysis also helps in diverting resources to areas that had high demand. Characteristics and Advantages of Effective Networked Governance Networked governance is a distinctive way of coordinating business economic activities across the globe. It is a comprehension of both short term and long term business opportunities in the global market.
Networked governance also includes the negotiation of satisfaction criteria for various business lines and integrates processes that measure the improvement of the global business efficiency and satisfaction of investors. The approach as used by the SAGA helps in monopolizing both the Saudi Arabian citizens and investors in the implementation, development, and monitoring of public resources. During the leadership of AY Dabbing, SAGA engaged in networked governance in order to create a favorable business environment for investors as well Saudi workers.
Various government agencies in Saudi Arabia subscribed to networked governance whose main focus was to balance the interest of various stakeholders in the country. Key ministries in Saudi Arabia also engaged in a role to sat rating and running their own businesses. This was used to change the business climate in Saudi Arabia in order to attract foreign investors. There are various characterizes associated with networked governance. It is a form of operation that has sustained membership.
In this situation, members from various parts of the world are free to operate their business in this kind of governance. In Saudi Arabia, SAGA has enhanced sustainable membership in order to create a favorable destination for the investors from other countries across the globe. Networked governance also helps in recognizing variation of it members. Foreign investors from various countries have varied capacity, which is highly recognized by SAGA agency. This helps investors to invest in Saudi Arabian businesses that are within their capacity.
Networked governance also promotes federal objective of investors by providing them with the appropriate workforce that meets the required skills and training. Ways in Which Saga’s Changes Have Transformed Governance in Saudi Arabia The creation of SAGA was deemed as a step for targeting private and foreign investors. Its main goal is to place Saudi Arabia in the top ten competitive destinations for investors across the world. Over the years, SAGA has transformed governance in Saudi Arabia. Currently, networked governance is operated in Saudi Arabia.
This is a situation where major ministries, municipals, and agencies engage in business different fields. This has created a favorable business environment for both domestic and foreign investment in the country. The transformed provenance in Saudi Arabia as a result of SAGA agency has made the country experience a higher rate of Direct Foreign Investment. This has made Saudi Arabia to be one of the fastest growing economies in the Middle East. Currently, Saudi Arabia is the fourth country in the world in terms of foreign reserves.
The government has a major role of attracting investors from other countries in order to expand the company base and nurture sustainable competitiveness in the product and labor market. SAGA has embroiled different governance in the country in order to engage in business activities that boost the economy of the country. To enhance business operations in Saudi Arabia and create a favorable business environment for the investors, AY Dabbing interacted with the ministry of finance, commerce, labor, justice, rural affairs, health, education, transport, and custom agencies.
His main concern was to balance the interest of the multiple stakeholders investing in Saudi Arabia. Investor Service Center as an Innovation Investor Service Center is an innovation that provides a share registration for business related services to shareholders. The company has provided a website that creates awareness to investors by providing information on various stakeholders. The service center is dedicated to a proactive task of disseminating information to both investors and analysts by responding to their specific queries.
The center is also an operational innovation that is used by large enterprises and multinational companies for effective integration of global resources and in providing internal services. The center plays a major role in the global capital market. It serves as a supplementary credit analysis that provides financial institutions with ways of assessing risks on various securities. The company NAS prescribed services standards tort various activities related to both domestic and foreign investors. Deviations are examined by internal security auditors who advice companies on various measures to be undertaken to enhance better performances.
The committee in this service also observes the performance of the business and recommends some measures that should be undertaken by investors to improve their output. Assets brought to the table by the private sector other than business acumen and other skills Private sectors encourage globalization and investment by the foreign and local corporations. The liberalizing of the world economies encourages private foreign investors to take advantage of the opportunities in other economies (Mitchell, 2011).
This is driven by the corporations’ ethical quest for more profits and minimization of the shareholders wealth. Interconnectedness through corporate foreign investments achieves the goals of ethics in globalization. When foreign investments increase, competition builds up; this creates room for innovation. Employment increases lifting the living standards. With the same measures, a corporate organization profitability increases in the short run; this maximizes the stakeholders’ wealth and attains the report social responsibilities such as creating a favorable environment for businesses.
Foreign direct investments in corporate and industrial sector lead to the depletion of resources and make the world vulnerable global warming and climatic changes. In the developed and developing economies, most of the private sectors are based on foreign investments especially in the industrial sector; these emit toxic substances to the atmosphere causing pollution. As competition builds up in the industry, resources are depleted and the environment is polluted. Private sectors in an economy facilitate output and productivity and subsequently enhance economic growth.