ABSTRACT
This case study focuses on how human resource management (HRM) in a healthcare organization responds to external institutional factors in general and to labor laws in particular. It also shows the significance of strategic HRM and how the integration of business and HRM strategies is important for the success, growth, and resilience of the organization. In particular, this case study illustrates the effectiveness of HRM best practices and the necessity of taking the context into consideration for the same to happen. The case introduces Al-Habib Medical Group (HMG) and its current position as a leading health provider within Saudi Arabia. It then offers a background to the case in detail, with the aim of putting the organization into its regional context so that the reader can fully understand the external factors and how they affect its HRM. The context section of the case explains thoroughly the localization law and reviews the reasons for its failure, the common reactions of employers, and the efforts and initiatives of the decision-makers to make it successful. Lastly, the case presents how the case company responds to the external environment, and what HRM strategy the case company is pursuing so that it not only implements the local laws successfully but also becomes a benchmark in the health sector. After reading the case, students will realize the significance of strategic HRM as a foundation for having a strong business, understand the impact of institutional factors and labor laws, in particular, on HRM, recognize the importance of analyzing the context and adopting a contextual HRM approach, appraise the ability of the universalistic perspective of HRM to achieve competitive advantage and firm performance, and critique localization laws and the necessity of all stakeholders’ participation in decision-making.
