OPRIC LMP and CSR

Introduction

Orpic suffers a lack of effective social responsibility and a holistic approach in dealing with the community and the environment and this lead to problems in profitability as a result for passive reputation of the company that has been affected by such a situation. Issues related to oil wastes are neglected by the company and although there is a department for corporate social responsibility in the organization, there is a big shortage in the application and activities of that department. Challenges facing ORPIC growth include the proper application of the policies of corporate social responsibility and to have a holistic approach that ensures the right CSR application in the organization. There are pressures practiced by shareholders to urge the company take serious steps in the field of CSR. The current paper is discussing the problem of Orpic through reviewing and investigating the literature and the relevant theories such as the institutional theory that depends on going beyond the integrating of CSR into the company's behavior and realizing it historically and politically in addition to discussing tools for solving such a problem in ORPIC and techniques such as engaging shareholders in CSR activities or stakeholders' management, neutralization, scientific solutions and doing researches on the organization's current integrated management systems and discussing the business processes optimization. The research aims at discussing leaders' roles in taking serious actions to solve such a problem and suggesting strategies to be followed in order to applying CSR effectively in order to help the community and the environment and to raise the company's competitive advantage in the market and among all stakeholders. 

Problem statement

Corporate social responsibility is a term that has received much interest in the past decades as a result of the global trends towards having a clean world and a safer environment in local and national and international areas especially in developing countries where there are many passive practices in that regard as giving much interest to CSR in developing countries raises the effect on reducing poverty and pollution rates that are high with an absence of the governance observation in many of these countries. Spence, (2010) explained that the danger of the lack of enough CSR practices and activities increases in oil and gas companies that have passive behaviors regarding wastes, oil extraction processes and other relevant activities that are harm to the society and to the environment in general; he added that in many developing countries CSR activities and practices need more care due to the political conflicts and social problems these countries may suffer but Oman is a country that is advantaged with stable political conditions and high economic degree which make it a good place for initiating corporate social responsibility practices but there isn't enough knowledge and applications in this issue which makes it urgent to make different various researches in how to apply CSR in business organizations especially in oil and gas companies such as Orpic. Orpic has a corporate culture that gives interest to CSR and the company has a special department for it but there is need for applying different activities related to CSR and participating in the different social events in the local and the global levels. Orpic needs to have much more understanding for its role in CSR practices in addition to realizing methods that enable it to have strong CSR roles. Orpic practices of oil extraction and refinery works may affect the Omani society and environment as a result of not proper getting rid of wastes that lead to many complaints from shareholders and clients and other stakeholders which made the company in a critical situation that requires instant solutions that can be managed by the CSR department and by the company's leadership that can study the problem dimensions and identify methods for facing it with the help of many theories and investigations. The current research is trying to define the main problem Orpic company is suffering and states how it affects the general profitability of the company in addition to understanding the need for CSR to oil companies and to countries such as Oman and to find solution to face such a challenge that leads to reduced profitability of the company. The research is trying to review the past literature in relation with the problem of oil and gas companies and compare the case in different countries and then to suggest how CSR can be developed and sustained in Orpic in order to help the company reach a solution for its problem that is suffered in the community of Oman and perhaps in the global community.

Theoretical platform

Devin, (2014) discussed the institutional theory in relation with CSR and companies that try to apply CSR principles as he referred to the traditional techniques of business organization in following CSR old practices that depend on the history of the organization and its old means of dealing with the community which results in a resistance in change of the old traditional means of dealing with the world and the community and within the current age and the need for developing criteria followed in CSR, it become urgent to apply new techniques in CSR and look to the world not from an institutional perspective but within a holistic approach that focuses on a wider world and a better environmental globe. Jackson and Rathert, (2015) discussed how business organizations may not be able to understand how and why to communicate CSR in its proper place and what implications can be applied to prove that the company is reflecting real interest in such a policy and not only just pretending to the public that it has a CSR strategy as they confirmed on the need to be professional in presenting CSR to the local and global society and that this policy should be integrated within the organizational mission, values and corporate strategy; this may lead to complaints from the community that regard that the company is not giving the needed care to it through its programs and practices of CSR and then there must be a change in the organizational strategy dealing with corporate social responsibility. Buldybayeva, (2014) discussed how oil organization may neglect that they have to be more careful regarding CSR practices because the society is usually looking at them and considering them a main cause of pollution and are only interested in profits which raises the need to deal with those problems by the oil companies in order to be able to meet the social needs and add new dynamic dimension to the community as oil revenues can be shared with local governments or with the community where oil is found and people see that this oil is already owned to them; he referred that the different levels of corporate strategies in the organization result in different CSR models that may include the participative, hierarchical, exogenous, hybrid, endogenous or minimalist and each of those models can be used by the company's management to address the local and international community but the model should be selected carefully by the company's managers and researchers who can decide what model can be used to apply different CSR practices that can satisfy all stakeholders as each model has its own applications and these applications are what decide if the community is satisfied or not with the CSR type of the organization. Traditional approaches of CSR consider it a type of participation in the society of business without regard to the industry, products, society, the community or the economy of the country where the company is based.  

Eweje, (2007) explained how good CSR practices can raise the company's profits and improve its image in the society because it is then considered as a responsible member of the society with a legal standing that supports its position in the society due to the applications of corporate conduct that reflects the company's serious responsibility that is assured with its legal commitment; he also referred to the voluntary corporate conduct that is involved within the company's social responsibility as he asserted its importance to the company and to the society and they should reflect both local and international corporate social responsibility values in order to provide diversity of activities and provide a wider image of CSR that can be accepted locally and globally with a great variety of relevant activities to different attitudes, values, cultures and systems. This was affirmed by Gulbrandsen and Moe, (2005) as they confirmed that oil companies in particular should raise its interest in CSR practices as this type of business has long term dimensions that may really affect the society and harm the world and the environment in addition to addressing a very wide number of people from the industry and the public so there should be special regard to CSR of the company and to update the different practices and applications of the company's CSR. They explained that the government should also be careful from such types of industry by setting laws and legislations that control the process of production of oil and refinery in order to ensure general CSR to be applied by the company and set punishment on companies that are not following rules regarding wastes and production; they asserted that those who should deal with the practices of CSR in the oil companies shouldn't be among engineers, managers or low experienced professionals but they should be high experienced CSR professionals who are able to provide successful CSR projects and develop the different activities related to it in addition to recognizing the degree of social acceptance to the company's CSR participation locally and internationally as those high experienced professionals are able to conduct research and use different tools to assess the public acceptance of the company's share in CSR and can suggest new innovated solutions for any problems that may appear in that regard. Another important thing added to that is that oil companies' corporate culture such as Orpic is mainly focusing on technical skills of solving an identifiable problem which may be quantifiable and this limited focus lead to delivering limited community involvement and participation which in turn leads to great public dissatisfaction with the company's CSR projects in addition to a lack of sustainability. It is not important for the oil company to insist on the ‘business-case’ model that is applied as an approach to CSR as it leads to give interest to only relevant CSR issues to oil but the CSR activities need to be more social related and should be characterized with sustainability and accountability.  

Justification of theory

Orpic considers the environment as a major interest to its priorities which makes the company aware to the way its products and operations are done but the efforts done by the company are not enough for coping with today's world demands in the field of CSR so there should be a holistic approach that adopts new ideas and new CSR projects. Although the company has launched some environmental initiatives that are meant for reducing the environmental effects associated with the company's operations; Orpic is still suffering the need to provide the local and global society with enough activities and projects to ensure its insist on new innovative ideas in CSR and to prove that the company is adopting new modern methodologies of CSR and not following traditional institutional techniques. Orpic is working hard for reducing the harmful emissions the company may add to the environment and thus it thinks that it complies with the global environmental requirements but there should be more efforts for keeping the environment cleaner and trying to use new scientific techniques to keep the environment away from such harmful emissions and wastes. According to Thomsen, (2012), the institutional demands of CSR shouldn't be neglected by the company but they should be aligned with the social demands and environmental demands as all stakeholders should be put into the company's consideration when thinking of CSR in order to achieve success in that field, he confirmed on making analysis for the company's institutional strategies in adopting activities and practices relevant to CSR and explained that CSR policies should be updated from time to time by the company management and all shareholders should be discussed in order to realize the methods the company can apply to achieve acceptable CSR activities and projects. This was also discussed by Anderson and Bieniaszewska, (2005) who confirmed the role of including CSR within the company's strategy and how this should be integrated as a part of the company's business strategy, they also added that CSR should meet the needs of the different interest groups including shareholders as this can maximize profits and enable the company to strengthen its name in the community locally and globally. Orpic has provided the Omani society with different CSR development projects estimated with million dollars including Falaj Al Qabail Maintenance 124,667,23 Quick Win – completed 2 Ramadan Campaign 129,861.70 Quick Win – completed 3 AIESEC Partnership program 19,479.25 On going 3 Eyidia Campaign 129,861.7 Quick Win – almost completed 5 Football Tournament 31,166.81 Quick Win – will take place soon 4 Kick worldwide Outreach Program 317,901.44 On going 5 Tailoring Project 52,983.57 On going 6 Farmers Project 168,820.21 On going 7 Professional Education (for Providing training programs for the employment of 90 technical Professional) 420,751.91 and current Cyber Café project but these projects were not all successful and the community still complained of the emission of gases and the pollution the company causes by wastes throwing in addition to its location near villages and people homes which requires instant solutions to satisfy the public and confirm the company's policy relevant to CSR. (Orpic, 2016)

Orpic has many refineries and plants for producing oil and relevant products and the company produces different chemical products that may affect the environment when the production processes are not safe enough but the company tries hard to keep the environment around it clean yet this is not completely done as there is criticism and protests from the community that the company has to take more precautions in addition to providing the society with more share of the helping projects and job opportunities to solve problems of unemployment of native Omani so it is important that the company find solutions to such a problem, there should be greater roles for leaders in the company who can discuss the validity of the CSR department and checking if it is doing enough research in the Omani community and in the international society and then to compare the measurements of quality to those of the company and leaders should encourage CSR department to compare the current strategies used by the company in this regard to those of other international companies and then to find out new solutions; shareholders should meet with the company's management in order to discuss the matter, the public claims and suggest new scientific solution for wastes keeping and safe production. Dando and Martin, (2003) asserted the need to have friendly relationship with the community and the oil companies and that can be achieved if the oil companies found effective safe ways to get rid of wastes without causing harm to the public as he confirmed the need to find natural ways for waste recycling or usage in order to reduce harmfulness to the environment and reduce the pollution hazards by developing suitable techniques for the last disposal of dangerous wastes with bad substances it has or wastes can be used as energy source without harmful effects. The company should also provide the community with enough explanations about its activities related to CSR and this should occur in public events, meeting and conferences. Scheel, (2012) discussed how oil companies can maintain sustainability when they apply CSR practices as he stressed to have long term plans and make use of time to get rid of the complexity of the CSR practices which makes them less valued and regarded by the society and he focused also on changing the different practices of CSR in the community to have a holistic approach that can be realized locally and internationally and this can be made with the help of international institutions and organizations that care for CSR and provide international frameworks that can be applied by many countries such as the activities presented by the United Nation conferences. Orpic can make use of its current projects relevant to CSR and upgrade them, develop them and make them coping with the international frameworks in that concern in order to provide innovative ideas to the public and should focus on new methods for using wastes and emissions of oil production.  

Orpic is adopting many different projects that can prepare the company for the great changes occurring currently and till 2018 as the company is having three main projects that are supporting fuel Orpic’s transformation from being a national oil refinery to become an international integrated refining and petrochemicals company and in that regard the company is trying to expand its CSR practices and projects to cope with international measurements such as the company's current projects including beautification of Majees street and Al Mina Roundabout Street that is made by planting the streets' both sides in addition to making the construction works for their walkways and a forestation of Al Hilal Club playground that is existed in Auqda village in Liwa, as well as making a beautification project in the wilayat, in addition to other social projects that will be conducted by Orpic. (omanobserver, 2014) All the previously mentioned news is good and promising but the problem is that the company regards CSR as following laws, legislation and complying with the laws which is not true as CSR are those actions and events that are more and beyond the commitment of laws and legislations but this is a policy and a valued approach by the company and all stakeholders. According to Frynas , (2009)the oil and gas companies should have significant community development schemes to be implemented by them in order to help satisfy the public community as new projects such be more close to people as for example, development projects including schools, hospitals and employment programs in addition to participating in international partnerships with known trustworthy established development agencies such as the U.S. Agency for International Development (USAID) as well as the United Nations Development Program (UNDP) and at the same time they have to ask specialist consultancies and non-governmental organizations for implementing the needed development programs actually on the ground as this raises the company's reliability and the projects' validity. This was confirmed by Justice, (2016) who added that CSR should explain the industry practices and they should reflect a real value of the organization and not being just a pretended practice and oil companies in particular should show high CSR responsibilities and a big share in the community development. Witte and Jonker, (2006) referred to the nature of oil companies that raises the risks resulting from operations such as exploration of oil and gas, land clearance and the emissions and wastes from operations of gas refinery processes and that all these operations raise the public awareness and rag against such companies which makes it very necessary for them to develop a sustainable CSR program that is characterized with high biological protection systems and pollution related initiatives in order to prove its kind intention and hard work in that regard in addition to implementing practices against environmental risks and declaring the methods used by the company in protecting people and sharing responsibilities with them. Sustainability is important and needs to be stressed on while achieving CSR projects and this ensures future of these projects that is developed and promising and ensures safety for all stakeholders on local and international levels.

Conclusion

In conclusion, CSR is not only following the rules and legislations of the government in order to apply projects that prove the company is following those laws but it is broader than this as it should bear a value of the organization and a mission that ensures the existence of a holistic approach followed by the organization to participate in the social responsibilities including keeping the environment safe and clean and providing services to support the public in the community. Oil and gas companies in particular are always accused by the public community and organizations of keeping the world safe of being very dangerous on the world and the environment due to the harmful emissions and wastes those companies affect the world with and due to their existence besides villages and cities full of people so there should be high interest by these companies for CSR practices and activities that should reflect a deep awareness and understanding for the stakeholders' needs and the society aspirations from the company. Orpic has its own policy and strategy for CSR that are followed by the company to help the Omani society and keep the environment clean and safe but there should be more interest in reducing the harms and emissions of the company in order to have better reputation among local and international societies and this can be applied by the help of managers who should suggest new strategies for the company that are based on involving CSR practices and projects that are coping with the international measurements of international organizations responsible for world corporate social responsibility. 

Recommendations

It is recommended that Orpic should make deep analysis for the current practices and activities of the company relevant to CSR and to assess how far those practices, activities and projects reflect the real company's intentions in achieving helpful and cooperative approach that presents to the society help and safety regarding all the operations the company makes and the different intentions of improving the Omani society and its people in addition to proving the company is following a holistic approach that considers all global considerations regarding keeping the environment clean and safe and helping the world community. Orpic is recommended to change some of its current strategies in order to ensure the company is updating its corporate strategies and including CSR in all its practices. The company is asked to work with international organizations that give care to new updated and innovative ideas and suggestions regarding CSR practices and this can help Orpic follow international measurements of quality regarding oil emissions and helping the society programs. It is better if Orpic asks high professionals to implement the different CSR practices, analyze them, discuss how far they are successful and update them to cope with the international society and to be careful for declaring to the society how the company is careful to assure quality of its practices especially CSR practices.

Leadership and Trust

Introduction

Leadership has a big role to be played in the business organization as leadership can push the business organization towards success or failure and this depends on the leadership style, the methods and techniques used by leadership to guide employees and on the degree of trust between leaders and employees and how far this can achieve the organizational goals and can motivate employees, raise their morale and job satisfaction for achieving welfare for themselves and for the organization. Leadership and trust are two main factors that helps any business organization achieve its goals and reach competitive advantage as according to Vadell, (2009) there is a great role for trust in leadership as there are senses of obligation and duty involved in leadership and there is a relationship between trust and organizational commitment as leaders who are trustworthy are those who are usually more commitment to the organizational values, culture and goals. Trust is the new core of leadership as trust has to be mutual between employees and leaders and there should be limits for trust which makes the organization is not liable for dangerous decisions and risky issues but risk is also needed to be mastered and implemented and trust encourages effective successful risky decisions.

Leaders have to build trust among stakeholders through different means and methods as according to Nooteboom, (2003) the trust process in an organization can be managed by successful leaders who are able to maintain and use the right tools for building trust between them and all stakeholders as leaders who are great leaders can't be so without trust. Trust in leaders can increase the work engagement, productivity, efficiency and profitability because when employees trust their leaders, they believe in the jobs assigned to them by their leaders and they work to satisfy themselves and their leaders who are working for their welfare and the welfare of the organization where they work. The current paper is discussing leadership and trust by referring to the relationship between leadership and trust, the effects of trust on leadership, how trust can change the work outcomes and how the lack of trust can affect the work and the business organization, this will be presented by critically analyzing different authors' views from the literature in addition to presenting the researcher's point of view based on readings in the literature.

Body

Mineo, (2014) discussed the importance of trust in leadership referring to trust as a tie that connects the leader with his followers and provides the organization with the ability to succeed; he confirmed that trust is a main element of those forming the process of leadership development as trust encourages employees to communicate with their leaders freely and express their feelings, needs, complaints and problems they may be suffering in the business organization. This is a good opinion as it was also asserted by  Savolainen and  Häkkinen, (2011) who added that there is a big impact of trustworthiness on leadership as they referred to its importance in current business management; they explained how trust can be a basis for functioning relationships that are able to bring in effective business cooperation and successful team work. They also added that a leader who is trustworthy have many skills that can be transmitted to his followers through his behaviors as all employees will like to imitate his behaviors that are mostly representing the organizational behaviors and values which facilitates the processes meant to reach the organizational goals. Trust is formed by a leader through his behaviors and actions performed to achieve different tasks and in the way he deals with employees and other stakeholders. This was confirmed by Salas et al, (2007) who asserted that when the leader shows trust in all his acts such as being fair with all employees, respect them, show empathy, discuss different issues and encourage employees to work by integrating them all in one whole unit that works for the benefits of the organization; this returns to the organization with great benefits and profits. Trust is developed and raised throughout time and situations that occur and bear the real deep trustworthy leaders whose behavior express how far they deserve trust from other stakeholders including employees and clients as this trust can help in building different relationships with stakeholders such as clients, for example, who are in need for leaders' trust because they represent trust in the business organization itself.

According to Fairholm, (1994), If the business organization is working under high risky conditions, trust in leaders become a must and a main necessity for work as employees here need to trust they leaders in providing them with the safe work environment and the needs that ensures their safety and security. Leaders have to focus on reducing pressure on employees when needed and ensuring their job satisfaction as this raises trust and respect and encourages employees to perform better at work. He also referred to the culture of trust as trust needs to be a part of the organizational culture which means leaders should also have trust in their employees with a level that permits them to assign sensitive jobs to those employees when the work needs this and this doesn't mean not to take the required precautions set by the organization as trust doesn't mean not to follow rules and laws in everything.

Hassan and Ahmed, (2011) discussed how the business organization make use and get benefits from trusted leadership as they referred to authentic leadership that should be based on trust in order to make leadership an effective and successful management tool on the long term as trust should be real and based on real leadership behaviors as if trust was based on fake behaviors, it can't be used as a tool for long term management. They stressed on the need for ethicality of leaders to make them have effective governance as they have to follow high moral standards and ethical attitudes in their daily discussion, decisions, actions and behaviors because this helps them to be real heroes who inspire other subordinates to follow their path and behaviors. This opinion is good as leaders who are not following moral behaviors in the way they work can't be honest and the organization can't put its secrets and work details under their control as most leaders who are not trustworthy and are not honest can be the main causes of failure of the business organization as their bad behaviors lead to losing trust in them by employees, clients and other stakeholders which leads to many losses and problems. Sarwar, (2016) discussed the relationship between trust and the leadership style as he focused on the transformational leadership style confirming that it bears more trust factors for employees as it is based on communication, discussion and applying different changes in the business organization that are able to bring in more stability in the work environment which raises trust between employees and their leaders, this can be true to a great extent as transformational leadership is proved to bring in effective results in the business organization but it all depends on the leader and how he is applying the leadership style as the leader himself should be able to raise trust whatever leadership style he is following. He also referred to confidentiality and how it is a part of trust in leadership positions as leaders usually keep important files and data relevant to the business which makes them in very sensitive positions in relation to the way they may use such data and how they have to be transparent in all the processes and decisions they make which raises the levels of trust in them by employees and all stakeholders.

Webber, (2002)discussed the barriers to effective team processes referring to lack of trust between team members and the team leader confirming that when trust is lacked between the team members and their leader; this leads to have diversity in goals and the ways to reach them as members of the team may not be convinced with goals presented by a non trusted leader who lies a lot and never keeps promises. This view was also presented and confirmed by Gillespie and Mann, (2004) who explained that leaders are the main persons in a team and that they are playing the most effective roles in the team which is developing trust as this role can raise effective functioning of a team and lead to high levels of cooperation and sharing information as when trust exists with high levels within one team, this leads to honest competition that depends on sharing information and making full use of it for the welfare of the team in addition to reducing individuality feelings and selfish acts within one team. Dirks and Ferrin, (2002) discussed the different leadership practices that can raise the level of trust in the leaders and referred to these practices by stating that they are important to enhance employees' trust in the leader as sense of vulnerability of the followers or their perceptions about the character of the leader are not enough on the long run to maintain sustainable trust. Among these practices they mentioned employees' motivation, engagement and empowerment by the leader as these practices can raise employees' rust and respect to their leader who insists on involving employees in decision making processes and respecting their opinions in addition to encouraging them to be creative and innovative with a tendency to adapt their suggestions and ideas after testing them; they explained that these practices are best done by the transformational leaders who work by a real desire and intention to engage employees, motivate them and empower them by the help of the whole organization that bears a value of being all transformational.  

Evans, (2015) reported that trust is an element that should be a part of the whole organization ensured by its leadership in all areas and processes of the organization and he referred to the need of having a work environment that encourages trust building and sustainability as he presented a view of the work environment where leaders build trust and mentioned an example which is a work environment that is free from spying elements, strict monitoring and supervising techniques or giving too many instructions to employees in a way that makes them feel surrounded by over controlling forces as employees should enjoy a work environment with enough amount of flexibility as this raises their trust in their leaders and in the organization in addition to increasing their self confidence which helps in having better results and more productivity. This is completely true as the work environment is a very important part of the process of building trust within a business organization as when leaders encourage the supportive work environment; this raises employees morale and make them feel a part of the work organization and make them work hard to achieve the organizational goals.

Conclusion

In conclusion, it is important to stress the importance of trust to any leader in any organization as trust can bring in the best results and outcomes for the organization, when a leader is trustworthy, this encourages his subordinates to be more effective and efficient at work and work as a part of the organization as they consider their leaders as heroes whom they should follow and respect. Many authors believe that transformational leaders are the best in building and maintain trust as transformational leaders have the main tools of building trust such as the different practices such as motivation, respect, being fair with employees, engagement and empowerment of employees as these practices can build trust and encourage employees to provide their best to the welfare of the whole organization which means the welfare of themselves. Trust is related to leadership as it involves many factors such as confidentiality as a leader is a person who keeps much data relevant to the organization as such data may be secret and very confidential so the leader who is trustworthy is that honest leader who is able to keep important data on high secret levels and who is characterized with honesty and respect. A leader of a team needs to encourage trust within one team and among the team members as team work requires high levels of trust that encourages sharing information and reduces selfishness and individuality as when there is enough trust in the team; they all work for the team benefits and welfare in order to achieve success for the team and not for each member within the team.

The current topic can give many lessons to be learnt in relation to leadership and trust as among these lessons are raising the need for having a work environment that encourages trust existence in the work environment as when the work environment is supportive, safe and provides enough comfort and respect for employees; trust can be raised in leaders as a result of trust in the organization. Another lesson is to include trust building as a main part of the organizational culture in order to get sustainable trust and keep it on the long term. There is also another lesson which is encouraging employees to be engaged and empowered in the decision making processes and encourage their innovative and creative ideas in order to build a trust that is real and not fake as this can bring in the best business outcomes and more profits for the organization.

Islamic Banks and Investment financing

Introduction

Many Muslims today began to prefer Islamic banking in different areas of the world and they prefer to invest their money in it due to many reasons such as applying Islamic laws that don't apply charging interest systems which makes clients safe and happy related to what they belief in their religion Islam. Islamic banks use different financial instruments based on Shariaa. Islamic banking are common in the Middle East and it has spread also in other areas of the world such as the United Kingdom, Australia, South Africa and the USA.  (Yousef and Aggarwal, 2000). The current paper presents this topic through literature and presents a research proposal in the same area.

Problem statement

Islamic banking and investment financing are important today in many areas of the world as the Islamic banking industry has attracted the attention of many investors around the world as it provides investors with different financial solutions that can help them during crisis and repercussions. It is found that Islamic banking can be good at risk management which raised the interest in this type of finance investment.

Research questions

1. What are the important features that make Islamic banking common?
2. How can Islamic banking be effective for financial investment rather than other banking systems?
3. What type of clients does Islamic banking serve and what is the nature of this service? What type of lending contracts they can make there?
4. What are the challenges facing Islamic banking?
5. How do Islamic banking face the different challenges and risk factors?
6. How will the future of Islamic banking in Oman and in the whole world look like?

Objectives

• Understanding Islamic banking and why it became important in investment financing.
• Analyzing the challenges facing Islamic banking.
• Identifying solutions for those challenges facing Islamic banking and investment financing.
• Predicting the future of Islamic banking and investment financing.

Scope of the study

The study discusses Islamic banking and investment financing internationally and in Oman as well via examples.

Literature review

Islamic banking has been defined by many authors in different ways but it can be referred to as a financial institution that is applying the Islamic Shariah principles on all its rules, status, procedures, operations, activities and investment processes in addition to applying ban to operations related to interest receipt and payment. It is based on the Islamic economy concept and it is trying to apply the value system of Islam. Among the important features Islamic banking depends on is that it depends on profit and loss sharing rather than any other investing finance principle. This means that Islamic banking depends on risk taking as clients are not assured to gain profits but profits reflects the success of the Islamic financial institution as profits means work. Profit and loss sharing means that the traditional banks based on interests are replaced with a financial institution that applies participation in both loss and profit with clients as the interest fixed rate is replaced by a return variable rate that depends on the bank's economic activities. (Bello and Abubakar, 2014)

Islamic banking has specific characteristics that make it preferred by many finance investors such as its being based on the profit and loss sharing system and not depending on interest free or what is called Riba in Islam. The Islamic banking system makes investment such as loans and other investments as advances in conventional sense serve the investors' interests and the interests of the local community under what is called Mudarabah.

Distinguishing Features of Islamic Banking:

Comparing Islamic banking to other banking systems; there can be distinguishing features as follows:

1. Abolition of Interest (Riba) 

As interest is considered as being Riba by Islamic Shariah; it is not supported by Islamic banking services as they are interest free and being replaced by sharing profits and loss.

2. Adherence to public interest

Islamic banks activities depend mainly on presenting interest to the public through the different projects they have to make in the public community as their profits and benefits go to both individual clients and public welfare.

3. Being a multi-purpose bank

Islamic banks will be multi-purpose ones as they mix between being financial institutions for commercial and investment purposes and investment management institutions that establish supportive projects and ventures that help individuals sharing in the bank and others involved in the society.

4. Having better evaluation for the investment demand

Islamic banks have very careful attitude for evaluating the equity oriented finance application as Islamic banks have specific mechanisms for risk sharing which makes them have better evaluation for risk practices and how to be more careful to avoid loss.

5. Working as a development catalyst

Islamic banks depend on profit-loss sharing which makes them have better relationships with entrepreneurs and this adds financial experiences to the institutions which are non-financial and make Islamic banks as a catalyst for financial needs and consults for clients and help them make foe any liquidity shortage by providing them with financial advice through their financial consultants. (Mahmud, 2015)

Islamic banking are effective for financial investment rather than other banking systems as according to Dakhlallah, (2011) Islamic banks are offering different services that  don't depend on Riba practices and it is effective for those interested in following Shariah principles whether individuals or institutions. Islamic banks are facilitating resources allocation by providing different solutions for investment and by establishing different projects that help the individuals and the society as well. The means that Islamic banking profitability of their own projects represents deciding factors for allocating the financial resources and how far they can be developed. Islamic banks are more effective for economy of countries if they are really applying investment through economical projects as this helps a lot in developing economy. Islamic banking can also ensure equitable distribution of resources and income among the participating factors including the bank, the depositors as well as entrepreneurs via its built-in mechanical programs added to other welfare activities that are pursued through Zakah distribution service.

Islamic banks make agreements with their clients to buy them the shares they are going to invest in. They accept all types of clients Muslim and non-Muslim as many non-Muslim require different investments and go for Islamic banking. Clients in Islamic banks are considered partners with an Islamic financial institution (IFI) through Mudarib partnership as parties all share profits and the (IFI) receives a defined profit percentage. 

Islamic banking has many different lending contracts as they have a rent to sale deal or a buy-sale deal and deals involves underlying assets behind them as risk must be shared between lenders and borrowers in order to avoid Riba. There are different types of lending contracts in Islamic banking such as Murabaha that is an Arabic word which means short term trade finance as clients chooses the goods they need the bank to finance in. Another type is Musharika which is a joint enterprise business that the clients and the bank contribute capital in as well as chare profits based on an agreed ratio. Mudaraba is another type of lending contracts that is a partnership between the bank and clients with 100% capital for the bank but profits are shared based on specific ratios. Another type is Ijara where the bank buys the asset the clients need and then makes a joint ownership with the client who rents the asset and pays a rent for the bank to own the asset after a number of paid rents that may increase with time according to the increase in the asset price. (Dakhlallah, 2011)

Challenges face Islamic banks

Islamic banking has been facing different challenges lately and this lead to many efforts exerted by these banks to raise the effectiveness of its finance investment; the challenges may be resulting from comparing them to commercial banks or from facts related to the nature of Islamic banks or perhaps some challenges resulting from the terrorist actions done by some Muslims who are fanatic in fact and don't represent real concept of Islam. This makes Islamic banks suffer and try hard to find solutions. Here there are some challenges faced by Islamic banks and need solutions:

1. Legal support

Islamic banks offer specific business laws and contracts that lack the legal support in courts or in legal dealings as for example; when there are disputes related to Islamic financial institutions at court, they are dealt with in the same way disputes of commercial banks are dealt with and this may lead to different problems related to the contracts and other financial problems related to taxes that deal with contracts of Islamic banks as buying and selling contracts which increases taxes twice. This means that there should be special courts for Islamic banks and their dealings and contracts.

2. Islamic prudential regulations

This refers to the need for having strong supervision over Islamic banks as there are not currently effective Islamic prudential regulations which make the Islamic banking industry make different illegal acts in dealing with customers such as in Ijara as the bank here is the owner who takes advance and some Islamic banks use Ijara as "Rahn" which makes it resemble "Riba" that is forbidden in Islam.

3. Shariah based products

The Shariah based products are those products presented by Islamic banks to clients and they are all the same from an Islamic bank to the other which makes competition is very low and almost not found. The products are either Ijara or Murabaha mostly. This makes Islamic banks lack having efficiency in different financial areas such as having effective and standard financial contracts or even standard products which leads clients to be afraid of taking risks with Islamic banks.

4. Nature of Islamic banks

The nature of many Islamic banks as being financial institutions for Murabaha and Ijara and neglecting important factors in the Islamic financial concepts such as Mudaraba and Musharaka which leads to ambiguity in dealing with clients. Another thing is the ambiguity of projects applied by some Islamic banks and to the processes and procedures they take in buying shares for clients and selling them which raises risks and makes clients feel afraid. (Karimi, 2016)

5. Small assets and capital size

This refers to the fact that Islamic banks are not very old compared to commercial banks and that Islamic banks assets are not big enough for making all the needed operations of buying for Ijara and this leads to limitations in the bank's processes.

6. Terrorism movements in the Islam world

Terrorism movements performed by many people around the world pretending to be Muslims lead many people around the world to have Islamophobia and think that dealing with Islamic banks is dealing with terrorist and this reduced the development of Islamic banks in many countries around the world. (Iqbal, 2007)

How can Islamic banks face the challenges they face

Islamic banks have to take serious steps to face the different challenges face them; these steps should include urging the government to give more care and interest to Islamic banks by sharing in more CSR projects and by establishing effective profitable projects for engaging the youth in. Another thing to face these challenges is to employ effective supervisors by the central banks to guide Islamic banks and help them improve their level of implementing different financial projects. There should also be more supportive laws and legislations that suit Islamic banks' systems and realize how they work. Islamic banks should use the media channels and make effective advertising campaigns to make people aware of the way they work, their services and how they can invest their money in Islamic banks. Islamic banks should work harder to reach more people by sharing in public events and being a sponsor to different public events.

Future of Islamic banks in the world and in Oman

Many researches prove that Islamic banks have grown rapidly in their beginnings and currently that growth is declining which shows that Islamic banks are in need to review their strategies and techniques in order to find out reasons for this decline and solutions to face it and regain trust of clients again. Islamic banks in the future are supposed to change their dynamics and focus on new areas as they have to regard their profitability compared to commercial banks as they are in need for making repositioning for their position among other financial institutions. Atkearney, (2016)confirmed that they need to work more for facing competition and not only depend on attracting Muslims who are afraid of Riba and its interests. According to Mubeen et al, (2014) the future of Islamic banking in Oman seems to be successful, promising and effective because the study shows that people in Oman are all preferring Islamic banks and that the number of clients of Islamic banks is increasing daily which raises the expectations for promising future for Islamic banks in Oman as people are almost Muslims and prefer Islamic financial dealings and the Islamic banks in Oman prove to present effective projects for investing money of their clients which raises the trust in them by clients from Oman.

Research methodology

Research design

This research used the Descriptive Research design that depends on implementing the survey method.

Sampling Design: this study depended on the Proportionate Stratified Random sampling method as a number of 100 questionnaires were delivered to Islamic banks clients in Oman and a number of 30 questionnaires were distributed to economists in Oman.

Sample Unit: the sample unit of this study includes Islamic banks clients as well as economists from Oman including employees from Islamic banks and others from business institutions.

Data Collection Methods: the study depends on both primary data and secondary in it as the data was collected through the answers of the questionnaires and through other sources such as the internet, journals and books.

Data Analysis Method: The data collected was analyzed using descriptive statistics and SPSS program.

The Importance of Jogging

Many people think running is better than jogging and that it can achieve better results in reducing weight, burning fats and keeping healthy but there are many studies that suggest jogging to be rather better than running as they refer to jogging as keeping life line stable on the long run. The study was made on about 5000 runner and jogger as its results showed that the participants mortality rates that were tracked after that were reduced among joggers and health rated were improved. 

Many studies also say that jogging can have low risk of death rather than running. You can start by practicing jogging for about 40-50 minutes daily three times a week and then to increase the time period to one hour daily or five days a week. 

There are many points that should be regarded and noticed while jogging such as the following:

1.  Choose comfortable shoes that give you the cushion feeling during jogging.

2. You can jog outside in a safe area that is wide and not crowded with soft level surfaces such as tracks of colleges and clubs but if you are jogging very early or very late in time, it is better to do this at home using your trade mill. 

3.  Do stretching exercises before you start jogging in order to warm your muscles up. 

4. Choose comfortable running suits.

5. Switch the speed of your feet and make relaxed stretches from time to time. 

6. Set up a regular schedule and try to follow it regularly to watch the results soon. 

Selected types of companies within the scope of commercial laws

Introduction

Commercial law can be defined as a group of legal statements and rules that control and decide the duties and rights of engaged parties within a specific business or trade and they govern any arising disputes between sellers and buyers caused due to any transactions between them and those legal rules can settle some issues related to insurance, banking, affreightment or any other relevant issues. The commercial law concerns different types of companies such as the general partnership as there are rules for determining this partnership related to properties, ownership and the sharing process of gross related to such a partnership. Being a partner means that the person is legally engaged within a partnership. It is important when two parties make an agreement or more than two persons, to have within natural or legal persons as natural persons are those whose age is not under 18 years old who have judicial permission. This shows how far the commercial law is important and needed for general partnerships. Commercial law also cares for issues related to limited partnership which is a type of commercial partnerships resembles general partnership but the limited partnership must include one general partner at least and one limited partner at least while the general partnership includes two general partners at least. The commercial law controls how the general and limited partners can manage control, share in the rights of using the partnership property and having different liabilities for the partnership debts. A joint venture is a company or a business agreement between two companies or more than two and they agree to develop a field of business for a period of time that may be limited to form a new business company by the joint venturers financial contributions. The new business entity is controlled by the joint venturers and both of them share the revenues and expenses of the new companies. Joint ventures are made between individuals, companies or both. They may be small or major projects. A limited liabilities company is a business organization that has members who can't be personally held liable for the liabilities or debts of the company. This type of company represents a hybrid entity that has different characteristics of different companies such as those of a corporation and a partnership or those of sole proprietorships. (RSM, 2016)

A general partnership is a company that has a legal character and responsible partners who are working together and have direct and unlimited responsibility. Commercial law deals with this type of companies to control their business and relevant activities. A general partnership is established for purposes of practicing a business with a specific trade name. It should have a partnership agreement that is registered with the related ministry such as in Oman, the Ministry of Commerce and Industry. In Oman to start a general partnership, there should be a capital minimum which is 3.000 RO. The general partnership partners are liable to the debts of the General partnership as long as they are related to the company's property. A general partnership depends on the commercial law which gives each partner the right to act in an independent way as well as be able to pool resources, avoid big formalities and avoid high startup costs. The partner in such a company has to accept some resources and time not equal contributions as he has to trust the other partner business judgment and be fully responsible for the liabilities and debts of the business in spite of the risks involved in this. Each individual in such an agreement has to realize that there are no person to govern the other's decisions without stated terms about this in the agreement and that any partner is able to enter in a binding contract on behalf of the other partner. This makes it hard for partners to make a decision-making policy that is strong in such an organization. (Richmond, 2016) The joint venture is an arrangement based on a contract between two ventured parties and they have to agree on the governing terms and conditions written in the agreement. The two parties can make an equity joint venture through establishing a company that is owned in proportions that are known and agreed on by some specific funded subsidiaries or by purchasing equity in a company that already exists. The new business entity can be a limited liability company or a corporation or any other form that is applicable to the commercial law. The equity joint venture is usually made for collaborations that are closer and on long terms and they have higher levels of investment. Equity joint ventures are sometimes more difficult than others to be wind up as they are based on contractual agreements that are terminating and also the parties involved within it prefer to liquidate the assets which can be time-wasting. A joint venture involves terms that govern the mutual relationship between the involved parties.  (Stewart and Maughn, 2011)

The current assignment is discussing four types of companies that are ruled and governed by the commercial law which are the general partnerships, limited partnerships, joint ventures and limited liabilities companies. The assignment presents general and special characteristics of two main types of them which are the general partnerships and joint ventures. It discusses how these two types of companies are formed, liquidated and managed in accordance to the Omani commercial law. The paper is explaining the processes and procedures of how those two types of companies handle disputes and discussing issues and differences that arise in those companies. This is concluded and summarized to focus on the most important points in the assignment.

Discussion

There are different characteristics for general partnerships such as the fact that a general partnership is consisted by two entities or even two individuals or more than two. There can be two great corporations that can form one partnership when those great organizations agree to establish a new business entity by the two corporations. Forming a general partnership requires the business to be unincorporated and intending for making profits. There are unincorporated requirements such as the formalities the entity should have for forming the corporation that shouldn't be the partnership as the law related to the partnership is limited and not supporting high profits for the business. The partnership law is involved within the commercial law as a subcategory. Yet corporations for example are not in need for formation to find more profit. Sharing profits should be agreed by the two parties and such agreement makes a kind of a rebuttable presumption that confirms that the partnership existed. General partnership agreements should be written, the agreement has to identify the partners, their relevant duties, their responsibilities, respective business and the shared income by each partner; it should also define times for ending the partnership and all important details related to the business. There are capital partners who form a general partnership and those are the partners who agree to provide money and there can be labor partners who provide work.  In the general partnership all the partners are individually liable.  The general partnership can be useful for the two parties if the business is successful but it can lead to different problems if the business is a failure. Many problems are reasons for disputes about which party should bear the loss burden obliged by the partnership. (Manolov, 2013) Joint ventures refer to a wide group of commercial arrangements that are held between two or more entities that are separated as each party is considered an entity and provides resources to the venture to create a new business that collaborates the parties together and share profits as well as risks that are involved within the venture. Any party within the joint venture can present the land, the intellectual property, equipment and human resources or other assets. Each party should have a specific expertise that is relevant to the business and its development and this should be decided and agreed by all parties. It is important to have a shared vision between the parties and this should also include the objectives of the joint venture. It is necessary to realize the involved risks within joint ventures and the fact that the jointly managed and owned business can be well risk managed and mitigated through realizing its benefits and how to employ different services to serve that business and raise its revenues. There are reasons for establishing joint ventures such as the same business objectives of the two parties and the different shared views of different business activities. Joint ventures have to face different challenges and find creative solutions to them such as making the management as close as possible to the business management issues and both interests of needs of the both parties should be regarded and considered.  (Beamish and Lupton, 2009)

To form a general partnership in Oman, it is important to get the agreement of the two or more included parties and this should be done legally and according to the Omani law. They should be jointly and severally liable to the association obligation based on the Omani commercial law and this to the full extent of their own wealth. Participation in the general partnership has no limited maximum but all the general partnerships must be registered in the Omani commercial registrar. The agreements that form the relationship among the general partnership parties must bear the name of one or two of them showing that there is a partnership between them. General partnerships are managed through development upon all the partners unless there are other terms indicating management and should be written in the agreement. All acts can be performed by managers. All acts that managers perform should apply to the objectives of the agreement and the partnership based on the limitations that the agreement considers and the limitations that the Omani commercial law puts. Liquidation of general partnerships can be as a result of different reasons that should be specified in the association memorandum of the partnership and according to the Omani commercial laws. Liquidation and dissolution can be done based on death, withdrawal, bankruptcy or declaration of insolvency of one of the partners. Dissolution can also occur when there is a filature of one of the partners in accomplishing the assigned agreed obligations to him. It may also occur at expiration of the partnership term. (Al Alawi & Co., Advocates & Legal Consultants, 2016)   In Oman joint ventures are formed based on the Omani commercial law and the terms refer to the joint ventures there. They can be formed according the agreement by two companies who want to submit a joint tender in Oman where cooperation is the main objective of the two companies to present a new company where each of the two companies can execute different certain parts of a project provided by the joint venture. The two parties of the venture in Oman have to decide the ways for determining their relationships during the period of the venture. This is done via the joint venture agreement.  Joint venture in Oman is managed according to the agreement of the JV and this refers to all relevant affairs. Management in joint ventures can be done by any member of the venture. Liquidation can be done without any juristic personality; therefore, no question of liquidation. However, the JV Agreement can be terminated as per contractually agreed provisions. According to the Omani commercial law, the joint venture shall not have any legal connections with a third party except in case that there is a contractual relationship between the two main parties of the venture and a third party. (Hubbard et al, 2012)

General partnerships are controlled and governed by the Omani commercial law that can help them when there are disputes, issues and differences as the law depends on the rules that are set in the agreement of the partnership determined by the partners. Governance rules that the partners of the general partnership determine can differ from those set by the Omani rules and then the Omani law practices deal with the issues based on such rules of the partnership. For example; according to Article 42 from the Omani commercial law, a partner who withdraw from the partnership and this causes the latter’s dissolution must be responsible for compensating other partners for the damages caused by his withdrawal if it constitutes a breach of the partnership’s Memorandum of Association. Withdrawal from a partnership established for an indefinite period is not considered as a breach of the partnership’s Memorandum of Association. Agencies can be used as legal representative for the entity or a person and partners can ask agencies for processing disputes and issues of differences. This can be done via a contract between the partner and the agent. Partnerships are able to grant certain authorities to specific partners on condition that the grant exists in the partnership document. Without an agreement to any partners can bind the partnership without asking the consent of the other partners. (Bartos, 2016) Disputes related to joint ventures can arise in any stage of cooperation of the two parties and they can cause failure of the project. Disputes can arise then about sharing profits or any other reasons. Disputes may also arise over management and this can lead to tension in the organization between parties and may lead to great loss and failure. Bankruptcy of the joint venture can be another reason for legal disputes. Accusations can then occur and legal advice is needed. Dishonesty and fraud allegations can also cause disputes where the partners are in need for civil remedy. Arbitration agreements are also used here as they can be more effective in dealing with practical issues. An arbitration office or institute can be asked and there is a freedom for parties to choose the arbitrators who have to be from a relevant industry sector. International commercial arbitration can also be sought but to control disputes based on the limitations of the Omani law. (Mofcom,2016)

Conclusion

In conclusion, it is important to confirm the need for understanding different types of business entities and entrepreneurships in Oman as this can help understand the need for them, how they are formed and managed and other important issues that can help businessmen in their work or those who intend to start a business in Oman. It is important to understand how these companies are dealt with, liquidated and dissolute as well as understanding and recognizing the different articles of the law related to them. In Oman it is the commercial law that controls and decides different issues relevant to these companies as discussed above. There are four main types of entities referred at in this paper which are the general partnership, limited partnership, joint ventures and limited liabilities companies. There are two discussed in details which are the general partnerships and the joint ventures. The discussion about the two types refer to the main information about the two types of companies, why they are established and how and what law and legal advice can be used and sought in related with important issues about them. The two types of companies are presented, discussed and explained in relation to the way they are formed, liquidated and managed. There is also an overview of the way disputes, differences and legal issues are dealt with in each of the two types. For general partnerships; the formation depends on an agreement between two partners who should write an agreement and agree on management, money shares, profits and other important matters into the agreement in order to refer to it when needed. The general partnership can be managed through development upon the different partners of the general partnership unless there are certain conditions and terms involved within the agreement; this should be done based on relevant articles in the Omani commercial law. They are liquidated when there is death of each of the partners, expiry for the agreement or other different problems that may lead to disputes between the two partners. A general partnership depends on the Omani law in solving legal problems, issues of dispute and difference in addition to referring to the terms and conditions in the written agreement as it can control different legal problems. Joint ventures differ from the general partnerships as a joint venture is a business of a new entity that is established between two entities that can be very large and they are also applicable to the Omani law except for certain issues. They are formed when two or more companies agree to join and present a new venture. There should be shared vision and value between parties and management are agreed on and can be for any member of the venture unless specified. Joint ventures are liquidated when there is a fraud, a withdrawal by any of the parties or other reasons. They can ask legal advice for processing disputes and differences from the arbitration institutions that are found in Oman or those international arbitration institutions based on the limitations and legislations of the Omani law as well. 

Labor Law

Introduction

Under the Saudi Arabian labor law, many employees and employers are safe enough to keep their rights related to work, business and labor issues. The KSA labor law is usually updated in order to cope with the needs of labor market and to meet the new market and labor requirements. This ensures continuous updating to the different articles of the law and adding or omitting from them based on the public benefits of Saudi Arabia and its citizens and the workers working in it. The current paper is discussing the Article 84 from the Saudi labor law and how it is made for The reforms follow the Saudi Ministry of Labor’s continuous efforts for striking a balance between the creation of a dynamic marketplace for foreign businesses and protecting and developing the workforce. There will also be discussion for Article 85 and how far they are important and to compare them with the Labor law in Oman regarding the two articles.

Body

The Saudi Labor law includes many articles among which are Article 84 and 85 that state the following:

Article 84

Upon the end of the work relation, the employer shall pay the worker an end-ofservice award of a half-month wage for each of the first five years and a one-month wage for each of the following years. The end-of-service award shall be calculated on the basis of the last wage and the worker shall be entitled to an end-of-service award for the portions of the year in proportion to the time spent on the job.

Article 85

If the work relation ends due to the worker’s resignation, he shall, in this case, be entitled to one third of the award after a service of not less than two consecutive years and not more than five years, to two thirds if his service is in excess of five successive years but less than ten years and to the full award if his service amounts to ten or more years.

These two articles are very important for ensuring workers' rights when they are seeking end of service benefits. The law articles should be applied in the organizations with regard to the vaccances systems in each organization, the time periods spent atwork by the worker and the overtime spent in the job too. End of service award should be well calculated in each business organization based on many measurements and calculation. Resignation of the employees also is regarded as the resigned employee is dealt with by using the Article 85 of the Saudi labor law and then the Article 84 should be used with the employees who ends his service but not due to resignation. Some companies include the end of service benefits within the monthly salary as a package and this should be very clear from the very beginning of working with the company and should be clear in the contract as the employee should be aware of the items of the salary and how it is divided and about the strategy followed by the company to include end of service benefits as some employees may be shocked at the end of service when they find that they were used to receive the end of service benefits included anddivided to portions in the monthly salary as a package which may be a great shock to them and they may complain and ask for the end of service benefits. This all depends on the contract of work they had made with the employer at the very beginning of work. All terms and conditions sould be clear in the contract and the employee should be aware of the way the final reward is bening delivered to him and how it is divided orwhat portions are given to the employee of it within the salary or not. The labor law articles 84 and 85 are clear and should be well understood by the business organization in order to deal with the issue of end of services properly and not to cause problems with employees when they end their services.

Calculation of the end of service benefit should rely on the law article 85 and it should depend on the real period spent by the employee wworking and this can be calculated using different Excel programs or manually.

According to the Saudi labor law Articles 84 and 85 the award or the end of service benefit is given to the employee who completed work period that is minimum of two years service in any company that is located in Saudi Arabia. If the service of the employee is low than two years, the employee is not legible for receiving the award or benefits of end of service.

Based on the Article 84 and 85 of the Saudi labor law, the calculation of the end of service benefits of the employees in Saudi companies must be calculated at the end of working period of the employee in the Saudi company either the employee is leaving the company as his own choce or is terminated by the company in regard to the differences of the benefit in each cases. Calculations depend on many factors such as the salary, the number of years the employee spent in work and the case if the employee is terminated by the company or resigned. If the employee is resigned after two years of service but not finished all five years of service, the employee then is legible to one third of the end of service benefit award. If the employee is resigned from his job in Saudi Arabia after five years of service but less than ten years, the employee then is eligible for two thirds of the end of benefits service award and the salary's percentage will be that full salary of that employee.

If the employee's leaving is due to resignation from the job or due to being terminated after ten years of service, then he is illigible for receiving two thirds of the end of service award which is the full salary percentage here.

If the employee completed ten years or more in the job then he is illigible for receving the full end of service award. The salary percentage here will be full salary of the employee.

If an employer decides terminating an employee from his service before completion of his five years service, the employee then is eleigible for half salary.

If an employer decides terminating an employee from his service after the completion of his five years service. The employee then is eligible for half of the salary for the five first years and full salary to be calculated after five years.

Regarding the women employee when she resigns the job within six months of marriage, she is eleigible to receive the reward as full end of service benefit. This also applies to the woman who resigns the job after three months of giving birth to her child as she also recieves full end of service benefit award.

There are important government websites for Saudi employees to check for claculating their end of service benefit. All calculations are made on a basis that the employee has finished consecutive years in the company where he works in Saudi Arabia.

End of service benefit should be calculated and given to the employee based on the latest salary the employee received really and written in his papers based on the Saudi Labor law Articles 84 and 85.

There should also be regard to the contract termination conditions as:

 If the employee resigned after the contract period completion, it is dealt with as termination.

If the employee has resigned after the completeion of the extension of the contract, this is treated as resignation.

If the employer doesn't need tht employee to complete his his service at any time, this is treated as termination.

Claiming the end of service benefit is an easy task that each employee should be aware of and able to apply and ask for. The deceased employee should follow terms of death copmensation procedures.  

Regarding the compensation of employees at termination, Unless the parties agree in advance and in writing on the amount of compensation payable upon termination without “valid reason”, the party terminating the contract will have to compensate the other with either:

A wage equivalent to 15 days for each completed year of employment, in indefinite term contracts.

The balance of wages for the remaining employment term, in the fixed-term contract.

In each case, the minimum amount of compensation may not be less than two months’ wages. This was mentioned in the new changes of the law articles in 2016.

The labor law in Oman

Article 39

If the employment relationship is terminated, the employer, shall, in respect of the employees who do not benefit from the rules of the Social Insurance Law, pay to the employee an end of service gratuity equal to the salary of fifteen days for each year of service for the first three years and a one month salary for each year for the following years and the employee will be entitled to gratuity for the fractions of the year in respect of the period he spent in service and the last basic salary shall be the basis of calculating the gratuity. The duration of continuous service which began before the commencement of this law shall be counted within the period of service which will be considered for determining the payable gratuity period.   

Article 39 of the Labor Law (Royal Decree 35 of 2003) states that expatriate employees are generally entitled to an end-of-service gratuity payment on the termination of their employment contract and provides the calculation for the gratuity. The gratuity is calculated as follows:

Length of Employment:
1 to 3 years
Gratuity :15 days basic salary for each year of service
Length of Employment: 3 years or more
Gratuity :1 month basic salary for each year of service
The gratuities are calculated based on the final basic salary, and any fraction of a full year is paid on a pro rata basis. No end of service benefit applies to employees who have been employed for less than a year. This is different from the articles of the Saudi law 84 and 85 as it is the final basic salary that the employee's award is calculated by in the Omani law but it is the full salary that is applied in the Saudi law.

There are cases in the Omani labor law that the employee may not receive an end of service benefits according to :

Article 40:     

The employer may dismiss the employee without notice and without paying end of service gratuity in any of the following cases:-

1. If the employee assumes a false identity or resorts to forgery to obtain the employment.
2. If the employee commits a mistake which results in grave material loss to the employer, provided that the latter reports the incident to the concerned Directorate within three days from the date of his knowledge of such incident.
3. If the employee does not abide by the instructions which must be followed for the safety of the employees and the place of work despite being warned in writing, provided that such instructions are made in writing and displayed in a conspicuous place.
4. If the employee is absent from his work without reasonable justification for more than ten days in one year or more than seven consecutive days, provided that the employer gives the employee a written warning after being absent for five days in the first instance.
5. If the employee discloses the secrets of the establishment in which he works.
6. If the employee is finally convicted of a crime or misdemeanour involving breach of honour or trust or a misdemeanour committed in the place of work or while the work is being performed.
7. If during the working hours the employee is found drunk or intoxicated by a narcotic substance or a mind stimulant. If the employee assaults the employer or the manager in charge or gravely assaults any of his superiors during the work or because of the work or if he beats one of his fellow employees in the place of work and such beating results in illness or discontinuation of work for a period which exceeds ten days.
8. If the employee gravely breaches his obligations to perform the work agreed upon in his contract of employment.