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© 2007 Wi ley Per iodicals , Inc .Publ ished onl ine in Wi ley InterScience (www.interscience.wi ley.com)Global Business and Organizat ional Excel lence • DOI : 10.1002/ joe .20156 • May/June 2007

Currents:Book Review—The Tensions Between the Islamic Ideal and Business Practices in the Middle East G I L L I A N R I C E

& K H A L I Q A H M A D

Abbas J. Ali. Islamic Perspectives on Managementand Organization. Edward Elgar Publishing, Ltd.,2005, 272 pp. ISBN 978-1-8437-6766-4 (hardcover) $90.00

Pawan Budhwar and Kamel Mellahi (Eds.).Managing Human Resources in the Middle East.Routledge, 2006, 309 pp. ISBN 978-0-4153-4962-8 (paperback), $44.95

In late 2006, ARINC Managed Services (AMS), anAmerican airport-technology company, won a $22-million bid to provide computer and communica-tions systems for a new airport terminal in Cairo,Egypt. Starbucks has recently entered Cairo andAlexandria using an Egyptian franchisee. There arenews reports of a possible Disney theme park inBahrain. Many global firms such as P&G, Unilever,Coca-Cola, Pfizer, Microsoft, and STMicroelectronics have long been established in theMiddle East region but there is continual new activ-ity, growth, and investment. Despite the politicalproblems that are prominent in the news, mostcountries of the region attract considerable businessattention from all manner of organizations seekingto provide, for example: educational services (par-ticularly from the UK and Australia), pharmaceuti-cals and medical services, consumer products for agrowing middle class and very youthful population,and construction and engineering services for devel-oping economies. The region, broadly defined fromIran to North Africa, is of primary strategic impor-tance because of oil reserves, but there has beenslow economic development in general. One impor-

tant key to building competitiveness is the effectivemanagement of human resources. This can be achallenge for indigenous firms trying to overcomeeconomic and cultural barriers to modern manage-ment methods. It is also a conundrum for firmsoperating in unfamiliar countries. To achieve suc-cess, global businesses need cultural awareness, buthow might this be defined?

The GLOBE research project, led by Robert Houseand his colleagues, is an investigation of culture asvalues and practices. Values are judgments about“the way things should be done.” Practices are the“ways things are done in this culture.” Two booksthat illustrate the tensions between values and prac-tices are Abbas Ali’s “Islamic Perspectives onManagement and Organization” and “ManagingHuman Resources in the Middle East,” an editedtext by Pawan Budhwar and Kamel Mellahi. Ali’swork focuses primarily on the Islamic ideals withrespect to managing and leading groups and orga-nizations. Budhwar and Mellahi illustrate humanresource management (HRM) practices in fourteendifferent countries.

Ali builds upon his many years of conductingresearch on the work ethic in numerous MiddleEastern countries in order to compile a set of essaysdealing with various aspects of management such asmotivation, leadership, organizational structure, andorganizational development. His effort is rich withdetail of the history of Islam, although it should benoted that this is almost entirely focused on theMiddle Eastern region. This is somewhat unfortu-

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nate, as it can perpetuate the myth that “all Arabsare Muslim and all Muslims are Arab.” The countrywith the largest population of Muslims is Indonesia.Arab countries represent approximately 18 percentof the world’s Muslims, who have lived alongsideChristian and Jewish minorities for centuries. Achronological timetable of Muslim history, alongwith a complete glossary of all Arabic terms in thebook, would have been extremely helpful to readers.Most of the Arabic terms are transliterated intounconventional English spellings, creating confusionfor those particular readers who might already havesome level of familiarity with the subject matter.

Ali’s book details fundamental principles of Islamsuch as the unity of God, fasting, prayers, charity, jus-tice, the avoidance of prejudice and discrimination,and the prevention of the abuse of power. Particularlyhelpful in a business context is the explanation of thecentrality of commerce in Islamic thought and its ori-gins in pre-Islamic Arabia. Ali clarifies why Islamencourages trade among its followers.

As Ali explains, Muslims derive their ethical sys-tem from the teachings of the Qur’an (whichMuslims believe is a book revealed by God toMuhammad in seventh-century Arabia) and fromthe sunnah (the recorded sayings and behavior ofMuhammad). Ali includes numerous quotations toillustrate Islamic precepts relating to organization-al behavior. For example, from the Qur’an: “Thosein power should not be selected based on wealth orheredity, but on knowledge and physical fitness”(2:247) and “Man can have only what he strivesfor” (53:39). Some quotations from the sunnah orsayings of Muhammad include: “God loves a per-son who perfects his craft”; “God curses the onewho gives and the one who receives bribery”; “Hewho cheats is not one of us”; and “No one eatsbetter food than that which he eats out of the workof his own hand.”

From a practical perspective, Ali’s book lacks caseexamples and company illustrations. There is a

strong need for detailed examples of managerial sit-uations that would add some flesh to the bones ofthe reported survey research results about MuslimArabs’ values and work ethics. A key observationthat Ali makes, however, is crucial in leading thereader to books like the one edited by Budhwar andMellahi. He writes that, in contrast to pragmaticsocieties such as the U.S., “infatuation with the idealis something ingrained in the psyche of those whofollow the Islamic faith.” Muslims therefore strug-gle to overcome the inconsistencies between theirideal and societal realities.

Budhwar and Mellahi stress that their particularselection of fourteen countries through which toexemplify human resource management systems isintended to show the diversity of the Middle Easternregion. For some countries, such as Jordan andthose in the Arabian Gulf region, there is a clear tri-angle of influence on HRM practice. The Islamicideal is not the only influence. The three points ofthe triangle are Islam, the tribe, and the family.Organizational culture generally has the weakesteffect on individual behavior and so it is hard toestablish a strong corporate culture that can com-pete with other cultural layers in influencing anemployee’s behavior. The most important culturesare the family and the tribe.

The chapter on the UAE presents a rather rosy pic-ture that is hardly credible: “The work climate inmost organizations seems to be healthy with opencommunication between superiors and subordi-nates” and “Managers do their best to make surethat all employees are treated with dignity andrespect.” Perhaps a description of Kuwait is morefrank: “… in Kuwait, both religion and traditionconstitute an obstacle to HRM. Religiously, theKuwaitis utter religious principles and sayings butseldom act upon them.”

Outside influences are having positive impacts onthe HRM practices of some countries. For example,as Turkey has liberalized its economy, it has imple-

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mented legal and economic changes geared toEuropean Union membership. The new labor law of2003 mandates that, in the case of dismissals,employers carry the burden of proof of inadequateperformance. The implication is that careful assess-ments and records must be maintained. In Morocco,a new legal code for employment issues was insti-tuted in 2004 to improve the country’s attractive-ness to foreign investors. The code is compatiblewith international labor conventions and recognizeshuman rights in the workplace.

In Israel, HRM has faced the challenges of assistingorganizations in managing a multicultural, multi-value workforce and taking an active role in theassimilation of a “melting pot.” This has not provedeasy, with Israeli Arabs suffering a significant levelof discrimination. In the Arabian Gulf countrieswhere there are also multicultural workforces, dis-crimination is also present. Ali, for example, writesthat in Saudi Arabia, pay scales differ according tonational or ethnic backgrounds. Saudis receive thehighest salaries, followed by Americans andEuropeans, Arabs, Filipinos, and at the bottom ofthe scale, those from the Indian sub-continent. Partof the reason for such discrimination might be the“Saudization” policy (also implemented in othercountries as “Omanization” or “Bahrainization,”for example).

The Arabian Gulf countries have enormous andgrowing populations of people under the age of 25.Unemployment and underemployment are severechallenges (not always officially acknowledged).The Saudization employment policy, with a goal tocut foreign labor from 50 percent to 20 percent ofthe population, is controversial because organiza-tions do not like quotas for employing Saudi nation-als; companies need flexibility and opportunities touse HRM as a way to improve competitiveness. Onemanager is quoted in the chapter on Saudi Arabia assaying: “I want to hire Saudis, but why would I hiresomeone who I know won’t show up, won’t care,and can’t be fired?”

The multiculturalism of several Middle Eastern soci-eties could be beneficial as a source of creativity, butbecause of the lack of integration and the lack of jobsecurity (many work visas are provided for one yearonly), this potential creativity usually fails to per-meate the workplace. HRM has much effort toexpend in this regard. An in-depth understanding ofthe various cultures can help senior executives inboth the public and private sectors to encourageintegration and to develop systems for doing so.

It is certainly in the self-interest of global companiesto contribute to the economic development of thecountries in the Middle Eastern region and Shell, forexample, has funded an initiative in Oman calledLiveWIRE, which supports unemployed Omanis tostart their own businesses.

In Egypt, the culture differs from that of the Gulfregion and Jordan, and tribal influences are absent.There are other subcultures within the businessenvironment. These emanate from the governmen-tal sector, the family-owned businesses, and aWesternized subculture lived by the more seniormanagers of most joint venture operations.Egyptian social culture is collectivist and encouragesgroup work and team participation. Yet individual-ism is an obvious trend in Egyptian business culturebecause people feel a lack of security and yearn forpower. This is reflected in the GLOBE study’s“Institutional Collectivism Values” score for Egyptof 4.85, which is higher than the “InstitutionalCollectivism Practices” score of 4.50. A Gulf coun-try also shows this trend towards more individual-ism in a workplace setting. Kuwait has an“Institutional Collectivism Values” score of 5.15,higher than its Institutional Collectivism Practices”score of 4.49.

In some of the countries (such as Israel and Turkey)discussed in the Badhwar and Mellahi text, theHRM position is increasing in status and somemanagers have a role in strategic decision-making.On the whole, however, the position is still admin-

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istrative. In Morocco, the financial manager oftenplays the role of the HR manager. In Algeria, forexample, the HRM process is influenced by aninherited French bureaucracy. The chapter onAlgeria provides details of how job applicants forthe public sector must prepare a dossier completewith a handwritten letter, original or legally certi-fied copies of qualifications obtained, a birth cer-tificate, a residence certificate, a nationalitycertificate, a certificate of exemption from nationalservice (for men), a certificate of jurisdiction, fouror more photographs, and four or more self-addressed, stamped envelopes. Some organizationsalso ask for the birth and nationality certificates ofthe applicant’s parents. It is not surprising thatmany ambitious young people prefer to work formultinational companies. Certainly, in Iran, theworkforce prefers to do this because of better pay,training, development opportunities, and expatri-ate possibilities. There is much competition amongforeign companies for the best talent.

HRM is influenced, then, by Islam, tribalism, andfamily as well as by bureaucracy. In reality, theIslamic values explained in Ali’s book are givenshort shrift. There is considerable nepotism in hir-ing. In the chapter on Algeria in the Badhwar andMellahi text, the contributor writes how when the“piston” is used and/or a trusted friend recom-mends the person, the required job applicationpaperwork is minimal and jobs are offered directly.The “piston” is the North African equivalent of“wasta,” discussed in the chapter on Jordan. Themeaning of these words is “to go in between” andrelates to favoritism or the use of connections forpersonal gain. In a region with high unemployment,the practice of wasta is often the only way for manypeople to get employed. Wasta is rooted in familyloyalty and tribal dispute resolution. In spite ofIslamic ethical arguments to the contrary thatemphasize justice and equality, in the chapter onTunisia there is an explanation of how the practiceof wasta can indeed have positive aspects.Researchers have described it as a “psychic haven

amidst the chaos of social change.” Wasta providesa sense of belonging that implies unconditionalacceptance and assistance to a novice or young per-son. This function is helpful for both the individualand society.

The chapter on Iran shows how organizationalculture is paternalistic and how Iranians viewmanagers as sympathetic brothers and sisters orcompassionate fathers and mothers who are fre-quently involved in their employees’ private livesand family matters. A similar situation exists inJordan where although Jordanians have the rightto form unions, there is an absence of “workingclass consciousness” and workers are controlledby management. The “unwritten rules of employ-er relations” specify that an employer has a dutyto protect the employee, who in turn must showloyalty and obedience to the employer. Ali’sresearch shows that overwhelmingly, and accord-ing to Islamic teachings, Muslim employees wouldprefer a consultative organizational culture. Inpractice, companies are run in an authoritarianfashion with highly centralized decision-making.The chapter on Turkey in Badhwar and Mellahinotes, however, that Turks are gradually becom-ing less collectivist, less hierarchical, and morerisk-taking in the workplace.

One important contemporary issue in HRM todayis the position of women in organizations. Muchhas been written about the “glass ceiling” inWestern organizations. Neither Ali’s book nor theone by Badhwar and Mellahi provide much dis-course about women employees and their roles inbusiness.

Ali’s book, with its historical perspective and levelof detail on Islamic beliefs and values, is a solidsource for an Islamic perspective on a number ofkey issues in management and organization. Theedited text by Budhwar and Mellahi is a compre-hensive treatment of HRM in countries comparingand contrasting practices in countries such as

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Tunisia, Iran, Jordan, Oman, and Sudan. Given thedearth of suitable material on the subject, both arerecommended for executives who work or are plan-ning to work with their counterparts in the MiddleEast. The books are also valuable for expatriates inthe region. Budhwar and Mellahi, in their conclu-sion, stress that change is occurring rapidly in theregion. Their text provides many relevant and help-ful Web sites for further investigation.

Readers would do well to keep in mind the vital dis-tinction between desired values and actual work-place practices. Cultural changes are subtle andpervasive as the region develops economically andas its peoples engage in more and more exchangeswith other cultures via trade, investment, and allforms of contemporary communication (not theleast important of which is satellite television).

Global corporations and their HRM policies alsoare crucial change agents in the region.

Reference

House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., &Gupta, V. (2004). Culture, leadership, and organizations: TheGLOBE study of 62 societies. Thousand Oaks, CA: SagePublications, Inc.

Gillian Rice teaches Marketing and Marketing Research atArizona State University. She was a Fulbright Senior Scholarat the University of Bahrain in 1996–1997 and is professoremeritus at Thunderbird School of Global Management. Sheholds a PhD from the University of Bradford. Dr. Rice’sresearch interests include environmentally related consumerbehavior, the fair trade movement, and models of employeecreativity and organizational innovation. She can be contact-ed at Gillian.Rice@asu.edu. Khaliq Ahmad is associate pro-fessor and director, Management Centre, at InternationalIslamic University in Malaysia.