Mubadala Investment Company’s Human Resource Management Practices

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Introduction

Mubadala Investment Company is a sovereign wealth fund that manages a global portfolio with the aim of generating profit for the shareholder represented by the Government of Abu Dhabi. Mubadala’s impressive $229 billion portfolio spans five continents and includes sectors such as space technologies, computing, semiconductors, metals and mining, petrochemicals, utilities, healthcare, real estate, pharmaceuticals and medical technologies, and agribusiness. Still, the company’s most important sector of investment lies in the development of oil and gas industry expertise, as it presents quite the growth perspectives for the UAE.

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Evaluation of HRM Practices and Perspectives

Seeing as Mubadala’s activity is largely determined by the external factors such as the state of investment market and labor forces, it can be concluded that the company has adopted the 8-box model of HR strategy. The influence from external and internal factors provides the company with the ground for necessary changes in managing human resources. In the picture below, an overall structure of Mubadala’s HR department is presented.

HR Department Organizational Structure
HR Department Organizational Structure (n.d.)

The company has quite an ambitious vision, claiming that its mission is to reshape and diversify the economy of Abu Dhabi, providing potential for growth and improvement in the business sector. This kind of vision statement, as well as the company’s multi-industry business ambitions, calls for a specific Human Resources Management strategy that would reflect the company’s goals. Thus, the HR department of the company decided to split its responsibilities into four types of operation.

The first type of operational activity refers to the organizational culture adopted in the company – the HR department seeks to establish an effective culture that supports innovation and motivates better performance. Kraśnicka, Głód, and Wronka-Pośpiech (2017) state that “innovation supportive culture stimulates the generation of new solutions or their absorption from the outside and contributes to the more effective implementation of creative ideas” (p. 745). Thus, organizational culture is rightfully considered one of the main components of a complete and effective management system of team motivation. Mitra (2020) supports this claim, stating that the diversity of approaches, based on communication, is the key to understanding the concepts of entrepreneurship, innovation, and development, as they are linked with people, organizations, and environment. Thus, it is safe to conclude that adopting an innovation supportive culture was a wise choice of its HR department.

Seeing as the company has highly diverse personnel, its culture has to translate the concept of unification to all of the staff. However, such an approach from HR might prove to be not so beneficial to the company, as it does not always address the cultural differences between the employees. In many studies, the management of socio-cultural diversity is recognized as a key strategic aspect of international companies. For example, Gupta (2021) specifically expresses “the need to keep the workforce engaged while taking into consideration the diverse backgrounds of employees” (p. 1). World business practice shows that companies are often faced with problems associated with people with intercultural conflicts, which often result in incorrect or belated management decisions. Roberson, Ryan, and Ragins (2017) claim that “diversity became recognized as an important contextual variable, or unit-level characteristic, which influences employee attitudes and behavior” (p. 493). Thus, Mubadala’s culture of unification might prove to be inefficient in the long-term distance, as it is more likely to fail in managing cultural differences.

Another practice that was implemented by Mubadala’s HR department is the use of the up to date recruitment tools in the process of hiring. Modern recruitment tools help evaluate not only the knowledge of a potential employee with regards to their respective field of expertise, but also assess if the candidate’s goals and ambitions align with those of the company. By realizing and understanding a candidate’s strategic and tactical values and goals, an HR manager can greatly facilitate goal-setting and the choice of alternatives in various uncertain situations. Thus, it is, indeed, wise to use industry- and time-tailored recruitment technologies to hire the personnel, as they provide the most comprehensive insight into the candidate’s qualities, motivations, and skills.

The strategy of high impact, adopted by Mubadala’s HR department, can be considered one of the best human resource management solutions that currently exist in the industry. The concept of high impact refers to the value of the employee’s work in regard to the whole industry. It provides a deep meaning to every action the employees perform in their line of work, resulting in enhanced motivation and a sense of meaningfulness associated with the job. For example, people working on the projects of renewable energy sources can observe the impact of their work on the economic and ecological state of the UAE. Horst and Murschetz (2019) state that “the convergence of strategy and entrepreneurship adds to organizational success through developing visions, exploring and exploiting opportunities, managing people, building networks, driving creativity, and facilitating strategic planning” (p. 1). The decision to implement such a strategy proves to have a powerful influence on the personnel performance.

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Recommendations on Improving HRM Practices

For Mubadala, it would, perhaps, be beneficial to modify the approach to employee management, seeing as the current form of leadership in the company does not reflect the company’s vision to the fullest. Ethical leadership has emerged recently as a specific form of human resource management, and for the Mubadala’s organizational culture, it would serve the best. A great example of a modern model of ethical leadership is the concept of servant leadership. Langhof and Güldenberg (2019) claim that “the servant-led culture positively influences team performance and employees work’ engagement” (p. 45). Thus, transforming the approach to leadership in accordance with latest trends is an essential prerequisite for Mubadala’s human resource management today, as it would enhance the employees’ performance and attract new professional workforce.

Additionally, a tougher attitude towards equal opportunities and inclusivity is strongly recommended, seeing as the company has a very diverse pool of employees, and the latest trends in HRM practices advise that for diverse teams. However, it must be noted that the concept of the Strong Affirmative Action and its policies does not truly suit Mubadala’s organizational culture. It creates an unnecessary tension between minorities and majorities, as well as provokes humiliating stereotypes about under-represented groups regarding their intellectual and work abilities. While the Strong Affirmative Action does, in fact, help cover the gaps in the minorities’ representation, it cannot be perceived as a way to the race- and sex-blind society. The Weak Affirmative Action that promotes equal opportunities for everyone, giving different people fair chances, would be a much better choice for the company.

Conclusion

Managing personnel in such a large corporation is, indeed, proving to be difficult; still, it is safe to say that the HRM practices implemented in the company serve its purpose well. Complex interaction and integration of corporate and personal concepts of motivation involves combining them into a single whole to carry out joint practical actions and educational activities that lead to a synergistic effect. However, new business reality requires new approaches and new solutions to every aspect of entrepreneurship. For example, the past year and the pandemics crisis have presented many challenges to business, and the HR industry did not stand aside either. Thus, it is safe to say that, while Mubadala’s HR department has, indeed, a well-tailored approach to managing human resources, it still needs to adjust its practices with regards to the changing trends.

References

Gupta, M. (2021). Management practices for engaging a diverse workforce tools to enhance workplace culture. Burlington, Canada: Apple Academic Press.

Horst, S., & Murschetz, P. C. (2019). Strategic media entrepreneurship. Journal of Media Management and Entrepreneurship, 1(1), 1-26. doi:10.4018/jmme.2019010101

HR Department Organizational Structure [Image]. (n.d.). Web.

Kraśnicka, T., Głód, W., & Wronka-Pośpiech, M. (2017). Management innovation, pro-innovation organisational culture and enterprise performance: Testing the mediation effect. Review of Managerial Science, 12(3), 737-769. doi:10.1007/s11846-017-0229-0

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Langhof, J. G., & Güldenberg, S. (2019). Servant leadership: A systematic literature review—toward a model of antecedents and outcomes. German Journal of Human Resource Management: Zeitschrift Für Personalforschung, 34(1), 32-68. doi:10.1177/2397002219869903

Mitra, J. (2020). Entrepreneurship, innovation and regional development an introduction. London, UK: Routledge.

Roberson, Q., Ryan, A. M., & Ragins, B. R. (2017). The evolution and future of diversity at work. Journal of Applied Psychology, 102(3), 483-499. doi:10.1037/apl000016

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BusinessEssay. 2022. "Mubadala Investment Company's Human Resource Management Practices." September 6, 2022. https://business-essay.com/mubadala-investment-companys-human-resource-management-practices/.

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