Tackling And Resolving The Unemployment Problem - Assignment Solution

The classical theory suggests that reduced competitive wage rates are the best way of tackling and resolving the unemployment problem. In the developed world, where competition operates on the labour market, this can be problematic. This is because issues like a low salary rate are unacceptable and could lead to syndicated action, i.e. strikes. (Carlin & Soskice, 2005; Seifert, 2015). Moreover, this theory cannot be adopted by some developing countries because the supply of labour exceeds the demand and because low paid workers exist. (Espinoza, Fayad & Prasad, 2013; Hein & Stockhammer, 2011). The issue is that lower wages already cause unemployment in the GCC region (Peck, 2014), and the issue of high government involvement in the economic industry is also posed (Alshahrani & Alsadiq, 2014). Therefore, the classical theory appears insufficient for explaining the situation of unemployment and labour market policies for these reasons and others already stated.

• Power Distance and Employment

The power distance according to Hofstede (1980) is the sum that workers accept that the authority is unequally distributed in companies and organisation. Also, power distance is a function of influence or power perceived between workers and a boss. Individuals and groups in a society with high power distance demonstrates that they avoid confronting bosses and disagreeing with them, whereas people from a community with low power distance feels that the inequity of authority is further reduced, Farh, Hackett and Liang (2007) It is implied that in a society the power distance is an instrument that indicates how a leader is going to behave and use his / her energy. The study by Atwater, Wang, Smither and Fleenor (2009) suggests that employees in this kind of culture believe that the behaviour of the copying manager is bad and they do not ask their bosses anything to obtain any information. Therefore, according to Farh et al. (2007), High power distance community workers don't interact with their superiors and therefore keep the social distance from their bosses. Workers with a lower power distance mentality are on the other side comparable (favour social equity) and do not recognize so much authority (Lam, Schaubroeck & Aryee, 2002). The workers feel that their management should be closer to them in terms of job responsibilities and work. In a study by Kirkman et al. (2009) it was stated that in such a situation communication between managers or supervisors by employees or subordinates shall be expected openly and expeditiously and preferred. Power distance is a highly important cultural dimension as it affects the behaviour, processes, and organisational structure of employees. Nagandhi and Prasad (1971) state that: “For me is to say yes to whatever my supervisor asks me to do, rather what I achieve for my company” (P58). It shows how the supervisors and subordinates are connected in a culture of high power distance. Therefore, abusive supervision compared to low power distance cultures will be high in a culture characterized by high power distance.

Smith and Trope (2006) and Magee and Smith (2013) indicate that people in power positions have a greater social divide than those who do not. It means that such individuals may not wish to work in the same occupations as them. Saudi Arabia particularly has a high power distance culture and is a prime example of such culture (Hofstede,1980). It can also be argued that supervisors are normally involved in abusive supervision in Saudi Arabia where there is a high distance of power. In the sense of the Saudi case, it could, therefore, be suggested that the local Saudis might not want to work with expatriates in the same positions, because the former feel that they are superior. Based on the previous theoretical argument and especially its recognition of the current literature on causality this research is based on Saudi employment study, the hypothesis for this study is:

H1: Saudi Employment is negatively related to the construct of power distance where all other things are equal