Workforce Localisation policies in Saudi Arabia (commonly known as ‘Saudisation’) have passed their nineteenth year, aiming at replacing foreign employees in the private sector with local employees. The government’s rationale behind the localisation of the workforce includes both the high rate of unemployment amongst Saudi nationals and the massive presence of expatriates in the labour market. The government acted firmly in this issue as organisations are threatened by closure and severe financial penalties if they do not comply with the policy requirements. Although these policies apply to all private firms, the regulations have been even tougher on Multi-National Enterprises (MNEs) as one of the main objectives of Saudi’s foreign investment policy is to create employment opportunities for locals. However, many MNEs have been found to be lagging behind in implementing the policies. Despite the importance of these policies and their implications on MNEs’ performance, research in this area remains very limited. The literature available has focused on issues of rationales and barriers of WL polices. One of the main gaps in literature is the lack of multi-dimensional models that identify the factors associated with the success of such policies. In an attempt to overcome the mentioned limitations, this research identifies the determinants of localisation success through the employment of multi-dimensional model. From the model proposed, the research evaluates the impacts of Institutional determinants, HR determinants, and firm characteristics on localisation success. The study draws its conclusion from the analysis of quantitative data collected from Human Resource Directors representing 157 MNEs. Hypothetical relationships are examined using multiple regression analysis. With regard to the first group of localisation determinants, the results support the institutional determinants of cause and control whilst supporting only the consistency proposition in the content determinants. With regard to HR determinants, the roles of HR director, recruitment, and training were found to be powerful determinants of localisation success. Finally, the results have shown that determinants related to MNEs’ characteristics—namely MNE size and MNE age—have no significant impact on localisation success. We also found that MNEs operating in the petrochemical industry are more likely to succeed in their localisation polices than other industries namely high and low technology industries. The overall findings have raised a number of areas of interest. First, the drivers of these policies were specifically social perception in the form of legitimacy and extrinsic economic pressure. Secondly, it was also duly observed that legislative and regulatory influence was found to be a strongly positive determining factor. From a theoretical perspective, it is concluded that greater diffusion of policies which acknowledge the potential variations in skill sets and labour availability and capability would, in fact, result in a more transparent approach. In the long term increased trust between organisations and policy-makers could have the effect of accelerating the localisation process because MNE’s work collaboratively with policy-makers and are prepared to invest resource in improving the level of localisation as a form of strategic and competitive advantage.

Few public and social policy subjects have attracted as much attention as Affirmative Action Policy (AAP) in social sciences. AAP’s main aim is to eliminate or prevent past discrimination against disadvantaged groups and to enhance their position in society. Its role has become controversial around the world. In Saudi Arabia, despite changes and improvements in laws and strategies, over past decades, to tackle the age-old issue of native unemployment, the problem is still deeply ingrained in society. This research has investigated the role, effectiveness and consequences of AAP on Saudi labour market structure. The research has employed a pragmatic methodology over three phases of analysis. The first phase has been based on an interpretive paradigm, and been conducted through semi-structured interviews with labour market experts, to identify and understand the policy. The interviews have been analysed using a thematic analysis technique. The findings of this phase contributed significantly to the understanding of AAP’s legislative nature and role. Two different historical versions of AAP (pre- and post-2011) have been identified. The earlier version (pre-2011) was found to be a non-strategic and vague policy that made no real impact on natives’ employment, while the new version (post-2011) has been positive in increasing native employment (relatively), but it has been associated with serious unintended consequences due to its stricter enforcement. The second phase has been based on a positivist paradigm, and been conducted through time-series analysis (2004-2014), to examine policy effects on labour market structure. The results have indicated that, in addition to the continuing issue of the high inward flow of expatriates, AAP has failed to either improve the distribution of job opportunities across the country, or enhance structural issues with some occupations in the private sector. The third phase has also been based on a positivist paradigm, and was carried out using a survey (sent to over 1,000 participants) examining the policy’s socio-psychological effects on employees. The findings have suggested that employees tend to perceive AAP negatively. Mainly, the results reveal a strong correlation between AAP and all types of discrimination, both individual and institutional, and such a negative perception of discrimination has direct and indirect effects on employees’ intention to leave. The main contribution of this research is to provide much desired information on the AAP’s practice and approaches, in an interesting context. The research provides vital information about old and new AAP legislations in Saudi Arabia. Two frameworks have been developed, (with one being tested), to understand the policy effects from different perspectives. Importantly, the research shows how a strict form of AAP can have side effects on the beneficiary group and destabilise the labour market.