Strategic Management and Positioning of Petroleum Companies

Abstract

The oil and gas industry is considered one of the largest economic drivers in the world. Thisindustry is responsible for the employment of millions of people and revenues of billions ofdollars. These facts indicate the importance of this industry and its impact on the world.

Effective strategic management of oil & gas compnies has become the only way forward for operating companies and national oil companies that will survive the volatile markets and risk of future strategic decisions in unstable countries.

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The strategic management tools are required to reposition these companies for the future to optimize the performance and reduce the associated risk of investment.

Senior managers’ opinions and strategic management applications investigated in this empirical study in the National Oil Corporation (NOC) of Libya and how the deal with international petroleum companies that invest in libya in oil and gas sector were most of these company have huge and mega project with enormous of local workers. There wasthe identification of the critical factors influencing the process of strategic management and comparison of the general model of strategic management. The approach adopted was a case study based on a research design known as the two-stage design. The first step consistedof aanalysis followed by twelve semi-structured interviews, which included seventy high-ranking managers as participants who were involved in deepening the findings of the study with qualitative information.  The results suggested the heavy reliance of the Libyan NOC on the past strategy formulation and the strategic management to retain personnel in the top positions within the association. The political commands set the approach for the entire organization because of the existence in the understandingandknowledge between high-ranking business managers and the Board of the partisan appointees. The situation in other NOCs not reflected in the case study.  The case study also excluded the revolution’s impact on Libya.  There are recommendations for improving the steps in concerning practice in both the effectiveness of the high-ranking managers within the Board teamand thestrategic management.  An example in this situation includes a state-owned enterprise where three elements of inclusion suggested. The aspects of environmental scanning are the effectiveness of the Board, medium-terms objectives, and communal obligation.

The main reason for this study is for exploring various strategic management and positioning of global petroleum corporations with a specific focus in the case of Libya.

 

 

 

 

 

 

List of Figures

Figure 1: strategic managment proccess. 1

Figure 2: Pipe Lines of Oil and Gas fields. 3

Figure 3: Geographical distribution of Libyan tribes. 6

Figure 4: Trips and Geopolitical Power of Libya. 7

Figure 5:Percentage of respondents that identify different (non)state armed. 8

Figure 6: The Conceptual Framework. 19

Figure 7: Pyramid of value creation. 21

Figure 8: oil and Gas compnies working in libya. 32

Figure 9: Major oil and gas companies working in libya. 33

Figure 10: Stategy Process. 36

Figure 11: Gross Domestic Product (GDP) of Libya. 40

Figure 12: Inflation rate of Libya. 41

Figure 13: Proposed model of Strategic Management for State-owned Corporations. 43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

List of Tables

Table 1 : Distribution of Ethnic groups of Libya. 4

Table 2: Statistics on Libya (WHO, 2013) 9

Table 3: Perceptions and applicability of findings. 25

Table 4: Influences on and exerted by strategic management 27

Table 5: Difference between strategy formulation and implementation. 34

Table 6: Economic overview of Libya (CIA Factbook, 2013) 39

Table 7: ICT situation in Libya before 2007 (Hamdy, 2007) 46

Table 8: Balance of Payment scenario of Libya. 49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

List of Abbreviations

 

Item Discription
NOC National Oil Company
MOG Mellitah Oil and Gas BV
ENI Italian Oil and Gas Company
UNWTO World Tourism Organization
IMF International Monetary Fund
OPEC Organization of the Petroleum Exporting Countries
UNCTAD United Nations Conference on Trade and Development
IDA International Development Association
AU African Union
UNESCO United Nations Educational, Scientific and Cultural Organization
OIC Organisation of Islamic Cooperation
IDB Industrial Development Bank
CIA World Factbook
WHO World Health Organization
LGMA Local Government Management Agency
RBV Resource Based View
LNG Liquified Natural Gas
GDP Gross Domestic Product
AOO Akakus Oil Operation
GNA Government of National Accord
CBL Central Bank of Libya
NGO Non-Governmental Organisation
ICT Information and Communications Technology
GECF Gas Exporting Countries Forum

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

Declaration. II

Dedication. III

Acknowledgement IV

Abstract V

List of Figures. VI

List of Tables. VII

List of Abbreviations. VIII

CHAPTER ONE: INTRODUCTION.. 1

1.1         Background of the Study. 1

1.2         Overview of the Country: Libya. 2

1.3         Ethnic Group resident and living in Libya. 4

1.4         Tripes and Geopolitical Factors of Libya. 5

1.5         Social and Cultural Factors of Libya. 8

1.6         Family structure, women empowerment in Libyan Society. 9

1.7         Social and Communication behavior in Libyan Society. 10

1.8         The Objective of the Study. 10

1.9         Value of Study. 10

CHAPTER TWO: LITERATURE REVIEW… 12

2.1 Introduction. 12

2.2 Concept of strategy. 12

2.3         Strategy Implementation. 15

2.4         Challenges of strategy implementation. 16

2.5         Sources of Strategy Implementation Challenges. 16

2.6         Strategy implementation Issues in the Petroleum Industry. 17

2.7         Theoretical Review.. 19

2.7.1     Organizational Culture Theory. 19

2.7.2     Resource Based Theory. 20

CHAPTER THREE: RESEARCH METHODOLOGY.. 22

3.1  Introduction. 22

3.2  Research Design. 23

3.3  Population of the Study. 24

3.4         The Increase in Spot Market Pricing. 26

3.5         Data Collection. 27

3.6         Data analysis. 28

CHAPTER FOUR: DATA ANALYSIS, RESULT, AND DISCUSSION.. 30

4.1         Introduction. 30

4.2         Profile of the Petroleum Industry in Libya. 30

4.2.1         Local Petroleum Companies in Libya. 31

4.2.2         Forien Petroleum Companies in Libya. 32

4.3         Background to Strategy Implementation and challenges in the petroleum industry. 33

4.4         Challenges that impact the performance in the petroleum industry. 36

4.4.1 Technological Factors for Libya. 37

4.4.2     Political factors that impact on the international business in Libya. 38

4.4.3     Economic Factors: Analyzing current and future situation of Libya. 39

4.5         Strategy Management Practices in the Petroleum Industry. 41

4.6 Strategy Implementation Process in the Petroleum Industries. 41

4.7 Strategy Formulation Process. 44

  1. 8 Strategy Control Process. 45

4.81      ICT Development 45

4.9         Strategy Innovation Process. 46

4.10      Business Outsourcing Process. 47

4.10.1        Major Export and Imports. 48

4.10.2        Trade/ Bop of Libya: related to international Business. 48

4.11      Individual Company Implementation Strategy. 49

CHAPTER FIVE: SUMMARY OF THE FINDINGS, CONCLUSION, AND RECOMMENDATION   51

5.1  Introduction. 51

5.2  Summary of the Findings. 51

5.3         Strategic Implementation Practices in the Petroleum Industry in Libya. 51

5.4  Challenges of Strategic Implementation in the Petroleum Industry in Libya. 54

5.5  Limitation of the Study Problem.. 56

5.7 Implementation of the Study on Policy, Theory, and Practices. 57

REFERENCES. 61

 

 

 

 

 

 

 

CHAPTER ONE: INTRODUCTION

1.1  Background of the Study

 

Strategic management is how an organization goes through the institutionalization process to change its strategic plans to align with the firm’s objectives and goals. Past research has indicated that the strategic management and positioning of an organization are critical to its success. It is an area where most businesses value the most; since it is a phase allowingcompanies to stay close to their customers to have an objective and a competitive advantage over their competitors. Through pursuing excellence and putting goals into realities. Strategic implementation is a significant constituent of the strategic management process.  The high rate of failure in implementing strategic management and international positioning, results in the lack of success in the petroleum company. Several internal and external issues affect organizations that deal with petroleum and petroleum businesses. Resources influence the strategic implementation of petroleum companies in Libya, with marketing Industries also influenced by internal communication. Organizational culture also has a significant influence on people’s ability. Efficient communication should help to give a comprehensive explanation for different duties and responsibilities together with corporate obligations. The main goal of the unification process goes with the process of implementation of cultural alignment anti-establishment excellent employee and working conditions.

 

It is the art and science of communicating, applying, and assessing cross-functional decisions enabling a company achieve its aims.Strategic planning is one of the most challenging and exciting practices a corporation can undertake. Strategic planning enables an institute to make fundamental decisions by taking sevral view of what it hopes to achieve and how it will do so. A strategic plan established on a thorough evaluation of the  existingorganization’s structure, governance, among others.Strategic managementrefers to formulation, implementation, and evaluation of strategy, with strategic planning  is another term used when referring to strategy formulation.A strategic plan results from tough managerial choices among numerous good alternatives, and it signals a commitment to specific markets, among others.

 

Figure 1: strategic managment proccess

 

The petroleum and petroleum industry in Libya faced numerous challenges over recent years, but the industry has managed to survive the challenging environment with political and economic difficulties. The industry faces competition with the global market and, as for a long time, navigating through inadequate infrastructure and fluctuating prices of petroleum and petroleum products. The essential element of the strategic management process is implementing the strategy viewed as a turning process for the formulation of the strategy into various activities and then outcomes, which ensures the success in achieving the planned vision, and objectives of the organization. The strategic management process defined as dynamic, interactive, and complex. Since it involves a sequence of decisions and actions by managements and workers. The process influenced by several interrelated internal and external factors, which enable the company to achieve the strategic objectives by turning strategic plans into reality. The main challenge facing business managers currently is strategy implementation. There is no research carried out to examine the factors influencing the implementation of strategy in NOC. This study, therefore, examines the factors affecting strategy implementation at MOGas a way of filling the gap. The study’s precise objective was to evaluate the outcome of the allocated assets onapplicationof  strategy and explore the organizational culture’s impact on strategy implementation at MOG.

Out of 70 employees as the targeted population of the study, there were only 30% of participants who were 21 individuals in number.  During the selection process, the study used a stratified random sampling method selecting senior and middle managers together with regular employees across the offices in the country. Structured surveys used during data collection process, while descriptive and inferential figures used to analyze data. Even though the budget not released on time, there was budget allocation at MOG for strategy implementation, as shown by the findings of this study.  The formation of a reward system in the company by top management recommended by the researcher encourages the active participation of employees in strategy implementation at MOG. The senior management has a responsibility to inform employees on what they should do on time. They should organize regular management workshops in all departments to discuss problems encountered during the implementation of the strategy. For further studies, similar research done in other petroleum sellers and buyers and a survey of the role of strategy implementation at MOG limited.

 

1.2  Overview of the Country: Libya

Libya is a country in the northern parts of Africa which gained its independence in 1947 from Italy. Several neighbors border the country from all directions. Sudan borders it from the east, Algeria, Tunisia from the west, and Chad and Niger from the south. Despite being the biggest country in the region, Libya has a relatively low population. Libya was formerly ruled by a dictator, Colonel Muammar Gaddafi, for about 42 years. In 2011, the error of dictatorship ended due to the uprising civil war that had lasted for over six months. Libya first performed its parliamentary voting in June 2012 with General National Congress emerging as the best party. The country found inthe shores of the Mediterranean Sea and  richly endowed with minerals such as petroleum. Petroleum is Libya’s primary export, and it entirely depends on it. About 90% of the country’s earning come from exporting petroleum (Otman& Karlberg, 2007). From that, it is essential to note that Libya exclusively depends on the sector of petroleum exportation. The average income of Libya per capita is about $12300 (CIA Factbook, 2013). It is one of the most considerable income in Africa. Libya has an upper-middle-income economy, according to the reports issued by the World Bank. The economy of Libya began to rise after the national crisis that took place in 2011.

Even though Libya has the highest earning from the exportation of petroleum, there are also high unemployment and social inequities. The other problems Libya encounter are, lack of economic diversification, underdevelopment in the agricultural sector. Another problem is overdependence on specificpetroleum sectors. After the crisis in 2011, the country depended entirely on imports for itsprimary domestic needs. During the civil war, most of the foreign businesses in it shut down, and after that, it had to maximize security to gain the assurance of overseas investors (The Daily Star; 20th October 2012). The country is a member of several assiciations, both regionally and internationally. Some of the organizations are UNWTO,United Nations, IMF, OPEC, UNCTAD, IDA, African Union (AU), UNESCO, OIC, IDB, among others. The country is not entirely a member of the World Trade Organisation (European Commission; 2013). The other part of the report clarifies the potential, future developments, and the international economic environments of Libya explicitly.

 

Figure 2: Pipe Lines of Oil and Gas fields

Source :www.frontera.net

 

1.3  Ethnic Group resident and living in Libya

The CIA World Factbook claims that Libya’s population is 97% Arab and Berber, the 1936 census, which allowed citizens to declare their ethnicity, showed a more diverse population(CIA Factbook, 2013):

Resident native population of Libya
Ethnic group Population % of Libya’s total population
Arab-Berber 585,902 78%
Berbers 70,174 9.3%
Turks 35,062 4.7%
Black 30,079 4%
White 22,530 0.4%
Others 29,634 4%
Libya, Total 750,851 100%

Table 1 : Distribution of Ethnic groups of Libya

The population of Libya is primarily of Arab and Berber ancestral origin. Among the non-Arabized Berber groups are the nomadic Tuareg, who inhabit the southern areas as well as parts of AlgeriaMaliNiger and Burkina Faso. A few other tribal groups that still speak the native Berber languages are concentrated in the northwestern portion of Tripolitania. In the southeast, there are small populations of Toubou (Tibbu). They occupy between a quarter and a third of the country and also inhabit Niger and Chad. Among foreign residents, the largest groups are from other African nations, including citizens of other North African nations (primarily Egyptians) and West Africans.

Libyan society is to a large extent structured along tribal lines, with more than 20 major tribal groups.

1.4  Tripesand Geopolitical Factors of Libya

The tribe (qabila) in Libya should not be understood as an ancient and static social structure but rather as an everchangingentity which can include a wide range of social organisations. There are over a hundred tribes in the country, with 30 key players. The majority (90%) of Libyans are a mix of Arab or ethnic Arabs and Berber(Al-Hamzeh Al-Shadeedi& Nancy Ezzeddine, 2019).  The tribes of Libya are considered one of the country’s oldest, longstanding societal institutions (Mohamed Ben Lama, “The Tribal Structure in Libya 2017). The country has historically witnessed the entanglement of tribes and politics.  The major tribal groups of Libya in 2011 were listed:

Some of the ancient Berber tribes include:Adyrmachidae, Auschisae, Es’bet, Temeh’u, Teh’nu, Rebu, Kehek, KeyKesh, Imukehek, Meshwesh, Macetae, Macatutae, Nasamones, Nitriotae, and Tautamaei.

As of 2012 the major tribal groups of Libya, by region, were as follows:

  • Tripolitania: alawana-Souk El Joma’a, AL-Mahameed, Warfalla, Tarhona, Misurata tribes, Al-Jawary, Siyan Tribe, The Warshfana tribes, Zawia Groups, Ghryan Tribes, AL-Asabea, Al-Fwatir, AwladBusayf, Zintan, Al-jbalya, Zwara, Alajelat, Al-Nawael tribe, Alalqa tribe, Al-Rijban, al Mashashi, Amaym.
  • Cyrenaica: AJ-JWAZY, Al-Awagir, Magharba, Al-Abaydat, Drasa, Al-Barasa, Al-Fawakhir, Zuwayya, Majabra, Awama, Minfa, Taraki, alawana, Shwa’ir and in KufraZuwayya; Toubou.
  • Sirte: Awlad-Suleiman, Qadhadhfa, Magharba, Al-Hosoon, Ferrjan
  • Fezzan: Awlad Suleiman, Al-Riyyah, Magarha, Al-Zuwaid, Al-Hutman, Al-Hassawna; Toubou, Tuareg.
  • Kufra: Zuwayya; Toubou.(wikipedia, 2020).

Figure 3: Geographical distribution of Libyan tribes

Source :https://worldview.stratfor.com/article/distribution-libyas-major-tribes.

  • Before fall of Gaddafi

Libyan tribes played an important role in the country’s fight against Ottoman, and later Italian, colonialism, with many Libyan tribal members sacrificing their lives in this war. It is believed that there are currently around 140 different tribes and clans in Libya, many of which have influences and members outside of the country, from Tunisia to Egypt to Chad.

In a country that has lived under the brutal dictatorship of one man for more than forty years, the majority of Libyans depend on their tribal connection in order to obtain their rights, and for protection, and even in order to find a job, particularly in the state apparatus., it was revealed that the two largest and most influential Arab tribes in Libya originated from the Arab Peninsula, and these are the Beni Salim tribe that settled in Cyrenaica, the eastern coastal region of Libya, and the BeniHilal that settled in western Libya around Tripoli

The degree of political allegiance to the ruling regime in Tripoli varies from one tribe to the next, particularly over the forty years that Gaddafi has been in power. The tribe which has the strongest, and longest, ties to the Gaddafi region is the Magariha tribe, who which has yet to announce their position on the bloody demonstrations that have been taking place across the country for the past week. Former Libyan Prime Minister AbdessalamJalloud, widely regarded as Gaddafi’s right-hand man for much of his reign, is a member of the Magariha tribe. Gaddafi’s own tribe, the Gaddafi tribe, had historically not been an important tribe in Libya prior to Colonel Gaddafi’s ascent to power, and the Gaddafi tribe was not known for playing a major role in Libya’s right against colonialism over the last 200 years.

The leadership of the Magariha tribe acknowledges a debt of gratitude to Gaddafi and his regime for securing the return of one of the tribe’s members, Abdel Baset al-Megrahi, from prison in Britain after he was convicted of being behind the Lockerbie bombing. the youths of the Magariha tribe from participating – with members from other tribes – in the demonstrations and protests against Gaddafi’s rule, especially in cities in eastern and southern Libya.

Tribal influence in Libya is extremely important, particularly since the 1970s, with tribal affiliation being important with regards to obtaining employment in Libya’s General People’s Committees, as well as in the country’s security apparatus.

Figure 4: Trips and Geopolitical Power of Libya

Source: www.militairespectator.nl

  • After fall of Gaddafi

The fall of Gaddafi in 2011 created a political and security vacuum that affected Libyans at all levels and in all areas of the country. State institutions had already been hollowed out during Gaddafi’s final years, and they quickly disintegrated soon after the start of the revolution. As a result, Libyans were forced to resort to their communal and local identity-based networks to ensure their security and survival. In this time of political vacuum, and particularly in the context of extreme fragmentation which would follow the revolution, tribes proved to be stable social institutions that provided Libyans with support, protection and services. In Cyrenaica, where tribal sentiment is stronger than elsewhere in the country, tribal identities after the revolution became an allencompassing characteristic defining an individual’s loyalty and political views.(Al-Hamzeh Al-Shadeedi& Nancy Ezzeddine, 2019).

 

The tribes are perceived as important and legitimate protectors and security providers at this time. Tribal actors have emerged as the main security providers at local (municipal) level: 38 percent of respondents say that tribes are responsible for providing protection in their area (figure 5).

 

Figure 5:Percentage of respondents that identify different (non)state armed

In some cities such as Ghat, where considered the tribal institution to be the most trusted due to its continuous attempts to fill the vacuum left by the state – from providing services to making efforts at community reconciliation. Several respondents from Ghat listed the local Tuerag forces as far superior in strengthto the police, the downside of tribal involvement in safety and security provision is that protection is offered in a partial and selective manner which reproduces the politics of co-optation and exclusion at local level. Respondents from Gharyan, who considered the committee of elders and sheikhs as the strongest actor in the municipality, labelled mono-tribal neighbourhoods such as Taghrita, AwladYacoub and Abu Zayan as safe while mixed-tribal neighbourhoods such as al-Qawasim and Kamounwere considered dangerous. (Al-Hamzeh Al-Shadeedi& Nancy Ezzeddine, 2019).

 

1.5  Social and Cultural Factors of Libya

The other factors majorly considered in the global business are the cultural and social factors of a country since they affect the economy of the nation, its international relation, and interaction. Cultural factors have a significant influence on the business situation globally (Shane, 1993). It is also essential to understand that social and cultural factors have a substantial impact on people’s consumption patterns in society. These factors also affect the business situation significantly (Yakup, 2003). However, the two elements have a significant impact on the business and economy of Libya. Studies have proclaimed that consumer behavior and purchasing pattern of certain goods differ because of the social differences (Williams, 2002). The global statics provided by the World Health Organization states that the two factors underdeveloped in Libya.

 

Table 2: Statistics on Libya (WHO, 2013)

 

Since Libya is an Arab republic, the majority of its people are Muslims. The belief has a significant impact in determining the culture and social norms of the Libyans (Vandewalle, 2006). The organizational level practices of the Libyans majorly determined by the social norms and culture. It, therefore, means that the in the corporate level values are less in practice as compared to the cultural values.

 

1.6  Family structure, women empowerment in Libyan Society

 

Family and social structures have changed significantly over the last decades. Families live together in rural areas but not in the urban areas because, in the urban areas, such as Tripoli, individual family structures noticed. Despite all these factors, social reputation and strong bonds are highly valued (Twati, 2006). The employees are majorly concerned with their families due to their strong social reputation and bond.

 

The pattern of consumption majorly affected by the family structure. In the urban areas of Libya, women receive the same social facilities and education as men. Therefore, the culture and economy of Libya are higher in the urban regions of Libya as compared to the rural areas due to the availability of women’s education and contribution. The social norms and culture in the country mainly influenced by the management style. The social culture of the society, together with values, are significantly affecting the system of management in several organizations (Jackson, 2002). Social norms of society majorly affect international relations and communication.

 

1.7  Social and Communication behavior in Libyan Society

 

Communication and social norms majorly influence the cultural and organizational practices of a region. Some of the factors that have a significant influence on the communication system among the Libyans positively are respect, self-trust, and social class. An organization needs to understand the social culture and communication behavior (Salomon, 2006). It is also vital to comprehend cultural involvement and communication behavior to promote a profitable relationship. Libyans use both verbal and nonverbal communication patterns to communicate. In their Social and organizational lives, Libyans majorly use verbal and nonverbal communication patterns. They also use nonverbal cues such as facial expressions to express joy, sadness, happiness, and anger, among others (Twati, 2006). An organization that has to establish in a country such as Libya must consider understanding the cultural and social communication behavior in the country.

 

1.8  The Objective of the Study

 

The overall study’s objective is establishing factors affecting the implementation of strategy in the petroleum industry: A case study of Libya;MOG. Hence, the specific goals of this research include the following:

  • To form strategy management implementation practices in the petroleum industry in Libya
  • To verify the existing challenges of strategy implementation in the petroleum industry in Libya
  • To examine the effect of the allocation of resources when implementing strategy at Libya Petroleum.
  • To search strategy implementation’s influence of organizational culture at MOGindustries

 

1.9  Value of Study

 

This study used to show the underlying significance of appropriate implementation strategy in international organizations toachieve their objectives while also maximizing the performances effectively. Accurate implementation of properprocess and proper market position in the organization is crucial because it allows an organization to stay ahead of its competitors and to increase the word of the stakeholders while also remaining relevant in the market. The research will also be necessary to all the petroleum Industries and fans worldwide, especially those that deal with international importers and distributors. The current and future operations of Libya will also require an understanding of the ongoing challenges towards the strategic implementation of the appropriate strategies. Also, what prevented them from remaining competitive in the market. This research will also be significant to various researchers, especially those determined to challenge strategic implementation policies while also creating business operations and guidelines for investors to craft and implement a winning strategy essential to the ongoing Society. The government can also use the findings in this research to implement the most appropriate method in recommending marketing positions and Strategies by the farms and government organizations to maximize profit while also increasing the government Revenue and creating employment opportunities for the Citizens.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

 

This part of the research, we analyze the literature review, summarizes the background information of the past strategic management practices and marketing position of international organizations in Libya. The literature review will cover past literature based on a local level and those focusing on the petroleum industry (Friedland, 2009; Friedman, 2000; Friedman, 2007; and Fukuyama, 1992). Some of the essential concepts of areas covered in clay with the idea of marketing strategy formulation, strategies of implementation of marketing position strategy, implementation of strategic control, and evaluation, and the challenges that prevent organizations from implementing the right approach within the petroleum industry and Libya. Before finally completing the literature review by analyzing the challenges to the strategic implementation practices of the petroleum business in Libya.

 

2.2 Concept of strategy

 

The definition given by Porter (1996) about strategic management is that a strategy allows a firm to have a competitive positioning that differentiates it from the rest and makes it appealing to the customers while adding value with numerous activities not implemented successfully by the competitors. Our strategy is, therefore, a roadmap that guides an organization to help in move in the right direction to achieve its desired state. A process can act as a template where daily decisions made and becoming a tool for a long-term plan where different actions constructed. Three strategies are appropriately implemented to allow an organization positioning itself most effectively within the environment to maximize its profit and potential while also monitoring the environmental changes that can easily affect the ongoing procedures or adjust its plans accordingly.

A strategy implemented correctly to allow an organization to grow within the business. According to the findings of Thompson, Strickland, and Gamble (2005), a method is a management plan that allows a company to grow and to help it to maintain a marketing position, thereby attracting customers and successfully conducting its operations to achieve market objectives. It shows that the petroleum trade in Libya has strategic plans and management formulated to help the organizations compete in the competitive market successfully. The past half-decade has seen the petroleum industry and Libya encounter the significant challenges of political instability, making their industry to Facebook local and international challenges. A rapidly changing environment requires properly implemented strategies and firms to remain as competitive as expected. The study also analyses various challenges of the petroleum industry in the country. The research will follow multiple objectives, including the establishment of strategic management practices together with the implementation of practicalgoals in the petroleum industry in Libya. The research adopts a cross-sectional design with secondary data collected from past literature. This report has found that the strategic management and position of global petroleum corporations in Libya has been a main influence in the internationalachievement of the petroleum industry, and the government has legal statutes that normalize the sector. The report also revealed that they are strategic management practices that deal with the petroleum industry despite cases of stimulation processes that do not involve other stakeholders. The fact that the companies do not buy into the stockholder’s strategy during the implementation shows challenges during such strategies.

Some of the elements affecting the success of strategy implementation include; management of the organizations, available resources, government regulations, organizational politics, and ICT (information communication technology).  The process of influencing a group of people to achieve goals through modification is a description of leadership. When a group of people says their opinions and their opinions welcomed, leaders inspire them to execute their ideas is because of influence. Influencing followers made possible through conversion and manipulation of power, decision, and politics of an organization (Furnivall, 1956; Gabriel, and Bzdilová. 2011 and Gary, 1994). Efficient strategy implementation is encouraged by good organizational leadership, which not done in the merger.

Aligning operational strategies with the available resources ensures the successful implementation of operational strategies.  Successful competition in the low-cost segment, a company is required to be the low-cost operator by implementing operational strategies that encourage low cost. Contributions that enable a firm to achieve its actions are resources. No worth brought to the organization with resources in themselves but only when used to realize their value. There are two categories of resources; tangible or intangible resources. Physical possessions of an organization, referred to as substantial resources, can classified into physical, fiscal, and human resources. On the other hand, technological and character are intangible resources.

The critical organization’s strategic resource is people, and there is a need for a company to utilize its employees adequately in the right places. Allocating employees to their practical activities is challenging to the management and coordination and integration of actions and functions of active employees. Choosing the right people to implement the strategy is essentials to give the right roles. It is providing employees with the opportunity to experiment and develop strategies to solve issues within the organization.  The factor hindering effective strategy implementation is insufficient resources application. Allocate enough resources by organizations is necessary for it to apply the designed strategies.

Organizational culture refers to the principal values, visions, perceptions, standards, and methods of behavior representing an organization. The organization’s stakeholders affected by the dominant culture. Familiarizing the internal integration and external adaption needs forms the organizational culture in response to survival in the business environment (Gawdat, 2005; Geddes, 2012;Geradin. 2010;Geradin. 2010, Ghanem, 2009, Ghanem, 2009, and Hollis, 2010).  Finding a way to cope as an organization requires external adaptation and survival with a change in the business environment. Internal integration involves developing language and concepts, group and team limits, influence, and position, as well as rewards and retribution in establishing and maintaining effective working relationships among organization members.

A system where there is a shared value of employees is also another form of organizational culture. Organizational culture refers to the process where the tone, pace, and character set within an organization, and the individual organization has its own organizational culture. Culture comprises employees, history, situations, and management, among others. The organization’s culture fashioned through communication. If the corporate culture is not taken care of, poor implementation of the strategy is possible. The communication tools are, therefore, a recommended strategy to build the organizational culture used by managers.

Communication has a leading role when discussing change and programs in the contemporary business environment (Hollis, 2010; Holstein and Gubrium, 2008;Homann, Koslowski, and Luetge, 2007).  As a way of managing skilled staff, there is a need to develop continuously within the organization. The process involves continually improving the reliability of the managing staff and having honest and open internal communication discussing employee problems in a human tone. Many organizations face challenges because of restricted openness in communication.  The presented surveys show many barriers in the flow of information from the bottom to the top.  Management does not receive feedback from employees due to the presence of a base, top communication, which also results in inaccessibility of essential rank information. As a result, managing staff’s images damaged since the employees cut off from reality as perceived by employees.  Social media provide communication opportunities hence a better chance for employees to speak, and to utilize social media by employees enables companies to change their culture to greater openness.

Building close relations among employees is also another role played by social media also facilitate the development of close relations between employees, which reduces the barriers between departments. Organizational growth requires management to develop a strategic and systematic method of confirmation of internal communication.  The chance of increasing the effectiveness of an organization is when companies take more activities advanced in contact to achieve employees’ greater involvement resulting in business ratios increments. Communication involves upward communication from managers to the employees, downwards communication from employees to managers, and horizontal communication between employees. Management’s role is to ensure that all departments within the organization have effective communication.

Implementation of strategy requires communication. A practical method for reaching an opinion is through vertical and frequent communication within the organization. Achieving higher organizational performance requires values and beliefs among employees.  When there is no honesty in upward communication, the company faces a significant challenge since it cannot solve its barriers and underlying problems caused by a restricted top-down management design. Effective implementation of the strategy hindered by poor vertical communication.

MOGis the operating company of eni NABV which present eni SPA in Libya. Eni SPA is major petroleum company in Africa and other parts in the world.  The main objective of the company as eni Company when it penetrated the African markets was to provide African born energy solutions. Market discontinuity led to transformation.  The position of the company caused by high competition also changed the initial strategy implementation. MOGchosen as a case study in this research because the company’s designed strategies have expanded, but implementing the strategy has proven a challenge since 2011. Hence the need to examine the determinants affecting the implementation of the process within the company.

 

2.3     Strategy Implementation

Multiple interpretive case approach of investigating the relationship between strategy and tasks in local administration enhanced determinations organization called Local Government Modernization Agenda (LGMA) in England. The organization’s structured execution of modifiedapproaches and extent of performance and initiatives organization that have a similarly strategic and effectivemotivation through the impact of shareholder. The structured integration of the level of strategic policy setting and its executive-level related with action in region authorities found unclear often needing cohesiveness.

Individuals discovered that the strategic management level and measure of performance and management driven by the need for compliance and emerging legislation rather than an improvement on the effectiveness of services. It led tointerruptions in applying policy, incoherence, and disapproval of performance procedures from distributionof services among staff . Individuals used a case study to focus on aspects of implementation strategy on the organization’s performance. The study set to have a holistic approach to strategy implementation rather than focusing on the whole elements of the organization. Such as operations and integrations. The procedures and combinations of the organization include effective competitor responses to strategy, failures of buy-in, unanticipated market changes, among others.

The supply of gas meant to meet the increasing demands from China, Russia, and other countries comes from the United States, which produces shale gas (Cartel et al., 2019,
p. 66). China is also likely to double its conventional production after initiating the year 2018 and has a long-term vision of increasing the output up to the year 2035 (Cartel et al., 2019, p. 67). Nonetheless, production in Europe will probably decline rapidly (Jones & Sullivan, 2019). An expectation that liquid nitrogen gas demand will outpace the demand in Asian markets relies on suppliers that come from long distances (Cartel et al., 2019, p. 67). Shale gas holds roughly 25% of the worldwide natural gas reserves, and Russia is likely to become increasingly essential as a provider in both Europe and the United States. The European Union views this trend as a gas glut (Cartel et al., 2019, p. 67;Finon& Locatelli, 2008, p. 423). The shale gas revolution has been radically increasing in the United States with the production coming from the success controlled by Russia.

Gazprom, in conjunction with Russia, has been continuously benefiting from the status quo that it has within the international gas market, and, therefore, it is not satisfied with any possible change that would affect the current situation. Russia is currently the dominant force of the supply in Europe. It has stressed the significance of having pipeline supplies while also benefiting from the gas prices associated to the costs of petroleum (Mulangu&Kottoh, 2019, p. 6). So far, the status quo has led to the successful negotiation with other European customers. Russia is not comfortable with negotiating or developing new customers in Asia. Such features and characteristics of petroleum in the international market can challenge Russia to respond effectively to the ongoing conditions.

Establishing a cartel would make the European Union more vulnerable because the European Union heavily relies on the gas imported from the member countries of GECF, the Middle East, and the northern part of Africa (Krutikhin& Overland, 2017, p. 5). Currently, the European Union is importing gas that comes from Algeria, Russia, Libya, and Norway, together with Qatar, and there is a need to diversify further importation from other sources, including central Asia and the Middle East (Marshall et al., 2016, p. 6).

Implementation act as one of the greatest widely recognized points of weakness for all strategic initiatives. Hence, there is a need to focus on the essential managerial traits known as meta-abilities. Many organizations try to overcome this issue by building management competencies among their managers.  The absence of development plans does not enable management skills. Used a case study approach to illustrate the challenges involved in using management development. Lack of attention to management competencies leads to losing the strategic effects of development programs.

A proposal to revise the framework, that includes variables emphasizinghow a company can fit strategy implementation and strategic management together. This study focuses on the establishment of the effect of implementing strategy in a public sector context. Using governance and relationship perceptions made it easy to analyze organizations’ reformation empirically. Factors improving the effectiveness of the government’s administration identified.  Ways companies’ performance improves in Taiwan showed that some factors that enhance the government’s managerialeffectiveness are; the structure of the organization, management strategies, resources and skill, and partnerships. Some factors that improve organization performance include compatibility, complementarily, among others. Study conducted in Taiwan, which differ from  Libyan context. The research  focused on the influence of impplemetingstrategy on the performance of the organization in Libya hence meaningful of the research given the environment of governance variations between the two nations.

The research examined the structural association between implementation and performance of strategy within Malaysia’s minor and medium producing companies recognized three fundamentalfeatures in application of  strategy. They include the organization’s structure, leadership style, and resources. The study’s focus was in the private sector, small and medium manufacturing companies in particular.  Hence, the generalization of the result is difficult when covering all the other areas. There is a belief in the dynamic actions of the strategy implementation within the strategic management process. Effect of strategy implementation on the performance of an organization measured across all sectors and at different levels

 

2.4     Challenges of strategy implementation

There are many reasons for the failure of strategy implementation.  They include unanticipated market changes, lack of support of senior management, insufficient resources leading to effective rivalreactions to strategy implementation, buy-in failure, lack of understanding; poor concentation; and poorly consideredtrade technicapproach. Another challenge is the cultural effect under approximation to strategy implementation.  Due to deep-rooted cultural biases, strategy implementation usually encounters rough going.

 

2.5     Sources of Strategy Implementation Challenges

Strategic implementation refers to actions that an organization takes to ensure that it delivers a consistent strategy for the future days. Implementation terms with the collective activities that always involve the stakeholders. If the right measures not taken while implementing the right strategic action, it is more likely to fail (Jasper. 2013; John, 1988; John, and Katherine, 2012; John, 2004; John, 2014). Despite the existence of different techniques and tools used in implementing and crafting the right strategy, some tools limit the implementation of search strategies. Therefore, after an organization has successfully implemented its strategy, it is more likely to have a competitive advantage over its competitors. The observations of Daft (2000) are that every major challenge that faces strategic implementation internal organization seen as a failure. Because it translates to the statement of Strategic purpose, showing that the organization did not meet its demands or objectives (Johnson, 2005, Johnson, 2010, Johnson, 2010, Johnstone, 2002 and Jon, 2006). It is an identical factor critical in an organization that has laid bare its objectives with the resources that ensure its success. Successful implementation of a strategy in an organization requires the right location of resources and control for the Chosen strategy (Joshi, 2009, Juergensmeyer, 2014, Julia, and Ariel, 2012 and Kacowicz, 2013). Different leaders understand the fundamental responsibilities that they have, including creating the right conditions within the organization to encourage people to use the right stages, including communication to create an environment for success (Kakazu, 2009, McNabb, 2010, Mehta, 2011, Mehta, 2011, Mehta, 2011 and Mertens, 1998). Some of the responsibilities that a leader should use include encouraging the organization to employ the right people and to state their strategies through the proper method of communication. The other fundamental responsibility for the details includes creating a key performance indicator that aligns the romance of the organization with the performance of their employees (Metz, 2004, Metz, 1998, Michael, 1996, Michael, 2011, Michael, et al., 2004 and Middendorf, 1998). Aligning the culture of the organization to the strategic implementation is essential, as well as redesigning the strategy when necessary. There are times that the organization may need to change the way its staff operates through enforcing the right behavior and action plans. A leader must identify what is required to focus on the right organizational strategy.

2.6  Strategy implementation Issues in the Petroleum Industry

Strategic goals are often large and complex objectives that almost always require many resources scattered across many departments and locations to accomplish them. Establishing clear goals across teams will result in more clarity on priorities and responsibilities.Barriers are those factors that obstruct, prevent, block or hinder in the process of strategyimplementation. These factors are an impediment orstumbling block thus making it hard for the organizationto achieve or to realise its goals of being where it wantto be in the years to come. The barriers to strategyimplementation can either be by internal or externalsources within an organization. These barriers aredependent on the type of strategy, type of organizationand prevailing circumstances which can be avoided ifstrategy development is coupled with implementation.The lack of understanding of a strategy and the inabilityto connect strategy formulation and implementation hasan impact on successful implementation (Niven, 2002).

Source: (Niven., 2002)

Understanding the importance of a corporate strategy is a no brainer. Getting it right is the challenge. A strategic plan also lays the groundwork for improving those things that need a little (or a lot of) work. The right vision shows company leaders where to dedicate time, human capital, and budgetary resources.Alarmingly, 90% of organizations fail to effectively execute their strategic plans, according to Harvard Business School. Improperly executing a strategy leads to a lack of objectives for employees, improper resource allocation, lack of structure and leadership, and weak lines of communication. That is why it is so important to get it right.The reasons for failed strategies are varied, but most hinge on the fact that strategy implementation is resource intensive and challenging. Understanding the biggest challenges to strategy implementation will help you avoid the most common pitfalls and better set your company up for success.

Source: (Hrebiniak, 2005)

 

2.7  Theoretical Review

 

A collection of interconnected ideas not well worked out is a theoretical framework. The theories guiding this study are the resource-based view theory and organizational culture theory. The theories explain different factors influencing the implementation of strategy in an organization.

 

2.7.1        Organizational Culture Theory

Organizational culture theory discusses the human behavior within a corporation and the significance that people attribute to those behaviors. The approach also illustrates that corporate culture symbolizes the collective values, beliefs, and principles of an organization. Organizations regularly have very contradicting cultures and subcultures. A company may also have individual unique. Primary firm’s different subcultures caused by linking various subcultures ii usually connected to another management team. the culture of the organization’s main challenging attribute of the organization to change, outlasting products, services, founders, and management of the organization.

The organizational model distinguishes culture from the observers’ opinions, as described at three levels: artifacts, adopted values, and underlying primary assumptions.

Schein’s model first level is those organizational attributes known as artifacts since the unskilled observer seen, touched, and perceived them. Artifacts include amenities, offices, furnishings, awards and recognition, dressing code of staff, interaction of employees and the organizational outsiders, and slogans, mission statements of the company, which create a model of the corporate culture. The model has four different types of organizations. Each organization type focuses on how much time a company receives feedback, how members receive awards, and the risks’ level. Some of the organizational cultures include; hard work culture, play-hard culture, among others.

 

Conceptual Framework
 
 
 
 
 
 
Resources
Allocation
 
Adequacy
 
Meetting strategic goals
 
Appropriate/Timeliness
 
Organizational
 C
Culture
 
 
Conducive culture
,
Shared
 
 
Perceptions
 
Supportive culture
 
Beliefs, practices
 
Strategy
Implementation
 
Outcomes/end results
 
Time frame/completion
 
Achievement of goals
 
Review
 

Figure 6: The Conceptual Framework

2.7.2        Resource Based Theory

Resource-based theory has different approach with five forces competitive strategy. Resource-based theory states that firm competitive advantage can be attained by utilizing firm’s resources as a strategic vehicle to outperform rivals. Firm resources are all assets, capabilities, organizational processes, firm attributes, information and knowledge controlled by a firm that enables them to conceive and to implement strategy (J. Barney, 1991).

Controllable resources of the firms will likely deliver economic benefit for the firms  (J. B. Barney and D. N. Clark, 2007). This theory focuses on internal capability building to be exploited in order to win the competition in the market.Internal capability can be shaped by reinforcing attributes of the firm’s controllable resources. Resources or assets in this context cover the visible and invisible assets. Visible assets can be financial, physical, and human. Meanwhile, invisible assets are information and knowledge-based resources such as technology, organization, work process and reputation(H. Itami and T. Roehl, 1987).

Invisible assets of the firm have become the major source of business competitive advantage in the modern environment(K. Verweire and L. V. Berghe, 2004). Visible assets shall be integrated with invisible assets to create competitive success. Invisible assets play important roles in driving the competitive power and adaptability, and can be used in multiple ways simultaneously as input and output of business activity. People in this context act as accumulators and producers of invisible assets. As a result, firm is urged to select business or development project that conforms with firm area of capabilities. New business development initiatives may require novel capabilities and competencies that can be built internally or by acquiring other firm.

Resource-based theory is applicable to shape corporate level and business level strategy (A. Campbell and K. S. Luchs, 1997). Business strategy can be shaped from unique resources and capabilities that are hard to imitate. On the other hand, corporate strategy can be shaped by matching resources to market opportunities through the creation of business units. Internal attributes and capabilities of firms will provide a stellar foundation to shape winning strategy. Capability, in this context, is the combination of process, infrastructure, knowledge and skills which are bundled inside decisive organization as special purpose vehicle. Firm has to able to identify the key capabilities and alter them to become distinctive capabilities for the sake of building core competencies of the firm. Distinctive capabilities are powerful attributes to gain against competitors. Portfolio of core competencies shall be managed around the circle of firm’s business and be integrated with appropriate assets to build strategic assets. Strategic assets are the foundation of sustainablecompetitive advantage. Additionally, innovation initiatives shall be focused on strategic assets to enhance the attributes of organization to confront with uncertainty, complexity and dynamic of recent market setting. In general, the interconnection between resources, capability and sustainable competitive advantage can be well represented by a pyramid of value creation in Figure

Figure 7: Pyramid of value creation

 

Wernerfelt’s 1984 resource-based view (RBV) suggests that achieving competitiveness requires innovative delivery of more excellent value to customers. This study centers on identifyingthe strategy and utilization of resources by a company to develop a continuous competitive advantage. Universal business academics also describe the achievement and setbacks of organizations across boundaries, considering the level of competition of their businesses in emerging markets. A valuable resource such as local knowledge provided by regional alliance becomes conceptualized value according to the local requirements.

Resources are inputs in the organization’s productivity according to resource-based theory, resources contribution into a organization’s manufacturing process. There are three categories of capital, which include physical, human, and organizational capital. The capacity of several resources performing a given task is known as capability (Omar, 2020;Khalifa, Dabab, & Barham, 2019;Vandewalle, 2018 and Haedr, 2017). Individual companies collect excellent resources and competences for providing the foundation for its strategy and its returns’ primary source.  An organization collects evolved capabilities managing dynamically to gain above-average profits according to the 21st-century hyper-competitive landscape (Irhoma, 2017; Oboh, &Ajibolade, 2017; Burton, 2019 and Abu-Azaaror, 1998). Thus, the company’s unique resources and capabilities drive the differences in the firm’s performances and not by the features of the industry’s structure.  Resource-Based Viewtheory explains the effects of the commitment of management when implementing strategy in MOG.

 

 

 

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

In this chapter, the methods employed in the study to achieve its objectives discussed. The studies pursued an opportunity to evaluate the factors influencing the implementation strategy of MOG. The study collected the information through interviews and questionnaires administration to various individuals. The method of survey used by the researcher employed known as descriptive survey design. The survey targeted the regular employees, senior managers, and middle managers in all the offices in the country. The study involved a random selection of 64 respondents, about 30% of the population targeted. The researchers used the questionnaires with both open-ended and closed questions to obtain the information that they wanted.

The study selected the management employees of MOG, and the questionnaires administered individually by the employees. Control and care on the research taken care of so that all the questionnaires from the respondents received. The survey structured in a way that it filled online, and one could not proceed to the next page without completing the questions on the preceding page. It helped lower the probability of making errors on the questionnaires. The researcher introduced the Likert scale to determine the quality of the research, by using frequencies, distribution tables, and percentage.

The study aimed to understand the perception of senior managers in strategic management. The following objectives examined to achieve this aim. They include;

  • Exploring the awareness and the involvement of the senior managers to formulate, implement, and evaluate the strategic management process of petroleum companies in Libya.
  • The study identifies whether the aspects of strategic management perceived by senior managers worked effectively and why.
  • Clarify the public sector’s responsibility and influence in managing the petroleum company.
  • The study assesses the research implementation by identifying management development needs for state-owned petroleum companies’ senior managers.

The study’s methodology used the combined approach, where a quantitative approach was employed supported by a qualitative approach using interviews. Analysis of the data used the idea of complementing quantitative and qualitative methods. The primary data collection instrument was a structured questionnaire that used closed, open multiple-choice questions. There was also the use of a Likert scale question to prompt information. The categories were; opinions of strategy and strategic management, formulation, implementation, and application of strategic direction to the NOC, factors influencing the process of strategic guidance on the NOC operations.

Academic experts did the validity of the content assured by the peer-review process. The reliability level of the content examined by Cronbach’s alpha, which scored a value of 0.85 out of 1.

A reasonable response rate for questionnaires was 30% achieving 70 out of 252 for top and senior managers, as shown in table one. Twelve semi-structured interviews followed questionnaires. Interviewees were to select their basis roles within NOC, such as exploration, production, among others.  The use of secondary data facilitated the triangulation of data ranging from policies of Libyan petroleum companies, records, also questionnaires, and interviews, which formed part of the primary data.

Research Questions

 

  • What are the Strategic Management and Positioning of international Petroleum Companies?
  • What are the effects of political instability on the international petroleum and petroleum companies in Libya?
  • How do international companies establish strategy management, implementation practices in the petroleum industry in Libya, and other places?
  • How do petroleum companies establish the existing challenges of strategy implementation in the petroleum industry in Libya?
  • What is the effect of the allocation of resources when implementing strategy at MOG?
  • What are some of the strategy implementation’s influence of organizational culture at Libya Petroleum and petroleum industries?

 

3.2 Research Design

The data and statistics collected presented in tables with the summaries of each table given in figures and percentages. The objective of this chapter is to expound on data and explain them instead of just withdrawing conclusions and interpretations: the research interpreted and analyzed data based on the questionnaire. The primary purpose of the study is to ensure that the researcher finds out demographic information of respondents used to justify the interpretations of the data. The respondents include all the employees of MOG in Libya. The employees work as regular employees, senior managers, and middle managers. The researcher issued about 64 questionnaires well answered and returned to the individual. The response given by the respondents rated 100%.

The demographic information required included the gender, professional experience, age bracket, job designation, and educational level. On the professional expertise of the respondent, most of the employees had expertise ranging from 5-10 years, while about 12.5% had the experience of more than ten years. It means that the respondents had enough knowledge of the requirements of the questionnaires. The research also shows about 40.6% of respondents had about 25 years of professional experience; this shows they had enough experience needed to implement the strategy. In the whole company, a small percentage of about 3.1% have a professional knowledge of less than one year. On gender, most respondents who answered the questionnaires were men, the percentage of men being 67.2%, and that of women being 32.8%. In the implementation strategy, research showed that men working together with women was necessary for the strategy in Libya. On the factor of age, studies show that 6.3% of the respondents were 56 years and above. 43.8% were between the ages of 46-55years. About 26.6% were between 36-45 years of age. Out of the remaining, 20.3% of the respondents were between the ages of 26-35 years. Therefore, it shows that the implementation strategy is likely to succeed because of the maturity of the respondents. However, it is essential to note that the youth needed by the company to bring new ideas. The areacovered significantly because about 3.1% of the respondents are below 25 years. Both the elderly and the youths work together to achieve the strategy of implementation.

On the level of education, about 17.2% had a Diploma, 40.6% had a Bachelor’s Degree, 10.9% had a Ph.D., 21.9% had a Master’s Degree, and others had 9.4%. It showed that the respondents had sufficient knowledge of the determinants of the implementation strategy in MOG. It indicates that most of the respondents had adequate knowledge hence were able to understand and answer the questionnaires. On designation, 67.2% of t respondents were majorly regular employees and the central part of the job in the company. The middle managers are occupying about 20.3% while the position of the senior managers was holding approximately 12.5%. From the above information, it is easy to conclude that the researcher had chosen the four central departments that were directly involved in the strategy of implementation.

The strategy and strategic management of high-level in perceptions, senior managers recognized the long-term approach and strategic management high-level nature. The most top-level of management’s perceived majority of the procedure to be the preserve, they also contribute to the implementation of typical identification of their job responsibilities, they also provided information used in the planning of the long term objectives. There is also a written strategy statement, which was of more importance than a written mission statement to strategic management. Various evidence showed a misunderstanding between strategic and operational plans.

 

3.3 Population of the Study

The strategic management implementation in NOC used long-term plans implementation, which prepared in a context. General models showed that strategic management is one of a classical, rationalist approach. On the other hand, the external environment considered of less importance compared to in-country factors. The role of middle managers was one of implementation, considering the quality of leadership as necessary. The aim of strategy formulation evident two impacts of the company and the country. Including the company perspective (profitability and productivity) and the country perspective (maximizing revenue to fund public services). When applying strategic management, implementation of strategy had an adequate rather than significant influence on the performance of an organization. The approach had monthly reviewed reports, technical meetings every six months, and urgent matters had a reproductive Board meeting. A significant future impact of a systematic approach to strategic management was an acknowledgment; however, several senior managers understood their role in terms of high-level control, aiming at ensuring that their part is in agreement with the budget, organizations ‘rules, and protocols. It maximizes revenueconsidered related to the relevance of strategy achievements, as demonstrated in table one.

 

 

 

 

Perception of strategy and strategic management Formulation of strategic management in NOC Implementation of strategic management in NOC Applicability of strategic management in NOC
a).65 percent of the participants knew written strategic design.

b).41 percent of them supposed systematic methodology to strategic management.

c). the company requires the political approval for strategic plans.

a). Eighty percent believed the importance of strategic planning for future success.

b). Sixty-one percent were not aware of the period for preparing long-term strategic plans.

c). little opportunity was provided for senior managers to apply their knowledge on strategic management.

a). Eighty percent assumed that decision making on the operation, effectiveness, and development of the organization and the implementation of business plans influenced by strategic management.

b). profit, efficiency, and productivity are the primary aims of strategic management,

a). An annual review of the company’s strategic plan seconded by 40% of the participants.

b). an essential strategic implementation was necessary for the structure of the organization, costings, and standard processes according to 90% of the participants.

c). external factors such as internal strength are more important than internal weaknesses as rated by 80% of the participants.

Source; Data analysis

Table 3: Perceptions and applicability of findings

 

The main factors influencing strategic management in NOC companies were internal rather than external, as identified by senior managers. They specifically emphasized the importance of utilizing capacity and political stability as a short- term strategic plan, which has proven effective in the past. There was less influence in social and cultural trends since senior managers’ relationships and social networks, if inappropriately used, disrupted the organizational performance. OPEC protects NOCs from external shocks; hence, there was no importance in the influence of buyer and supplier, and the strategic plan changes contrary to the inter-company internal competition. The application of strategic management, as perceived by the senior managers, includes long-term planning, revenue maximization, and maintenance of the company’s market position locally.

Liquid natural gas operates on a more dynamic market where relationships or agreements do not have to exist (Hallouche, 2006, p. 9). The significant consequence of the dependency on liquid natural gas is that Europe can buy gas abroad and does not have to depend on Russia for its supplies. Countries such as Qatar can quickly provide gas to Europe. Additionally, from the year 2001 to 2011, the share in European imports from Qatar grew from 0% to 11% while the market share owned by Russia in the European market dropped significantly from 48% in the year 2001 to 33% in the year 2011 (Eurostat, 2012, p. 5). Because of these trends, the traditional gas suppliers who depend on the pipelines do not have the power that they used to have.

 

3.4  The Increase in Spot Market Pricing

For an extended duration of time, Russia has maintained its opinion on the traditional systems of gas supply. The country believes that petroleum prices influence the price of gas for both producers and consumers (Miller, 2010, p. 8). According to Miller (2010), an increase in petroleum prices also depends on the rise in gas prices (p. 5). Nonetheless, the spot market continues to make large gas supplies available at prices that are not determined by other items but only depend on the supply and demand (Hallouche, 2006, p. 7). The petroleum prices and gas supply have become challenging to determine or sustain because of the availability of the liquid natural gas provided through terminals (Why &Gausmann, 2012, p.7). The initially defined pipelines integrated into the local market, making it difficult for traditional suppliers to determine the prices as expected (Orttung& Overland 2011, p. 55).

“…According to Muthoni (2012), the impacts of culture in banks include the connection between the implementation of the strategy and organization’s culture. The research shows that categories of culture in an organization connected to the implementation process. However, it is essential to note that implementing a strategy is most effective only when the culture is positive or clean. Culture is a vital element for a successful change of an organization and exploiting the human capital. (Homann, Koslowski, and Luetge, 2007).

 

Spot markets are becoming increasingly significant because of the rising supply and availability of liquid natural gas, contrary to the previous factors such as the imminent contracts and country relationships. LNG would also exert continuous downward pressure on the fixed prices, which evokes a concern for the primary producers, such as Algeria and Qatar, leading to the supply (Why &Gausmann, 2012, p. 9).

Findings generally regarded the impact of \strategic management on different operational features. There was not sufficient time for the training in strategy and strategic management embedded entirely in the petroleum company. During the comparison of the importance of both traditions of strategic planning and strategic direction in the petroleum industry globally. An intense ten percent remained towards operational and not strategic management, as shown in Table 4.

 

 

 

Factors influencing strategic management processes in NOC Strategic management influence on aspects of operations
1. The most influence exerted by Industry strength, political stability, and utilization of capacity,

2. Factors such as senior managers’ effectiveness, technological abilities, Human Resource skills, and good quality products are important, as suggested by 90% of the participants.

1.Effectivness of the organization cited by 80% of the participants,

2. Influence on the general performance indicated by 70% of the participants as a resultant of profitability and quality of production.

3. The organization’s effectiveness and achieving its gaol are not affected by strategic management impacts, as cited by 14% of the participants.

4. There was less impact on the organizational culture.

 

Source: Data Analysis

 

Table 4: Influences on and exerted by strategic management

 

Testing the applicability of Karami’s model was one feature of this study; strategy formulation is the first step with a mission to contextualize and implementation in the Libyan NOC. The key differences between the model and the data collected in the study revealed strategic awareness medium level exhibited by most senior managers in the Libyan NOC companies with less strategy formulation involvement. The extensive and regular reports of progress against plans on operation created from corporate strategy, there is, however, a little evidence showing the review of the strategy itself.  Karami’s model proposed a particular modification to fit in the Libyan NOC context.

 

3.5  Data Collection

The study sought to find out the influence of the strategy of implementation at MOG Limited. The findings showed that the company has invested prominently on technology and has adequate employees in various departments for the implementation strategy. This step has helped the company to utilize the implementation strategy budget allocated for strategy implementation. The budget allowed the company to translate the strategy into actions from words. The finance managers in the company support the strategy by releasing the funds on time. However, for effective implementation of the strategy, the release of the funds has to be timely.

Secondly, the study sought to sightsee the impact of organizational culture on the strategy of implementation on the company. The researcher found out that the values and norms of the organization have a positive impact on the strategy at the company. It influences a sense of diversity, leading to creativity in terms of implementation strategy at the company. The establishment of the reward system, fully involving the employees in the policy. The full involvement of the employees made it easier to implement the strategy. Therefore, it is essential to note that physical and moral appreciations are required to encourage workers to work hard.

 

3.6  Data analysis

Libya’s economy entirely depends on the sector of petroleum. It was evident that overdependence on a single resource deters a country from developing. Economic diversification is vital and is required for a nation to develop. It is a bad sign that Libya has no economic diversification yet the sector of agriculture contributes less than 2% of the total GDP. Diversification is very crucial for Libya if it aims to become a productive country. Libya imports 75% of the foods used for domestic purposes. The above analysis emphasizes that Libya has no particular focus on any other sector apart from the petroleum sector.

The European Union’s production of natural gas is continuously shrinking, and the Energy Information Agency has recorded an increase in consumption to 0.5% of the current 550 billion cubic meters to 620 cubic meters in the year 2035 (Van de Graaf et al., 2020, p. 78). The increase in the consumption of petroleum in the European Union requires an improvement in imports (García Galindo et al., 2017, p. 99). The International Energy Agency also predicts that there will be a growth despite leaders in Europe hoping to cut the consumption to address environmental changes and global warming (Gobble, 2017, p. 7). The natural pandemics that affected Japan was also a global concern that many people could not recover from (Cartel et al., 2019, p. 67). For instance, the dramatic events in the year 2011 reinforced the option of looking for more gas to rebuild the country (Marshall et al., 2016, p. 6). The earthquake that hit Japan destroyed the nuclear plants that were generating close to 1200 Watts of power. The problem ultimately affected the country, forcing it to enhance its reliance on the plants that produced other forms of energy (Zlatcu&Suciu, 2017, p. 7). The subsequent release of radioactivity has also resulted in two countries worldwide re-evaluating their nuclear plant production (Van de Graaf et al., 2020, p. 77). Similarly, it is an ongoing upheaval in Libya that has forced the production of natural gas and its transportation through the pipeline to Italy (Cartel et al., 2019, p. 67). Hence, the shifting change in the market has had a massive effect on the existing price markets, bringing difficulties for traditional suppliers.

In conclusion, the long-range planning by the Libyan NOC as showed by the practical approach to strategic management. Political factors and imperatives determined the corporate strategy, resulting in social responsibility and associated government policies included within the external factors highlighted as an essential environmental scanning aspect. There was uncertainty on the overall impact of strategic management by most senior managers to the different petroleum companies and the NOC. The usefulness of the applicability of strategic management to Libyan petroleum companies currently form an understood, even though there was less acknowledgment of various approaches that could more useful since there was no recognition of both the external factors and stakeholder relationships. The amendment of the contextualization of the recent model of strategic management would reflect the condition in the Libyan NOC. Intensive workshops for reducing gaps promoted by both the change in Board membership and knowledge and understanding through political engagements to the Board by senior managers.

“… theimplementation ofthe strategy is an essential element strategic management process. Also seen as the step that converts the articulated system into a chain of actions, which then ensures that the vision, strategic objectives, among others achieved and described as a complex process, which entails a chain of activities and resolutions by managers and his employees. Affected by both interior and exterior factors that are required to convert words into actions. However, the strategy is famous as the most challenging business challenge that the managers face in the modern world. Since no research  done on the issues affecting the strategy in MOG. The research done to fill that gap. The study specialized in discovering the impact of resource allocation on strategy and the effect of the culture of the organization to the strategy in MOG. The research aimed at 30% of the 212 employees to pose as respondents. It used random sampling to pick 64 employees, high-ranking managers, and middle managers from every office in the country.  The research used structured questions to collect information. The study revealed that the budget allocated for the implementation at the company released though not on time. The recommendation suggested was to introduce a reward system to encourage the active participation of employees at the company. The senior managers are encouraged to provide vital information in time to all departments so that the implementation of a strategy is successful (Gabriel and Bzdilová. 2011).

Studies have concluded that there are a significant connection strategy implementation and resource allocation. The studies also recognized the presence of an adequate workforce to achieve the plans of the company. Since there was enough trained personnel to work on the ambitious strategies of the company, it has also established that the company has significantly invested in technology. In conclusion, the execution of the strategy resulting from production procedures, funding, employees, selling, and technological advancements have been successful

The relationship between organizational culture and strategy implementation proved by research to be positive signs. Studies concluded that the values and norms of an organization have a positive contribution to the implementation strategy at Libya petroleum Company. The affective reward is also available in the organization, which has enabled the management to involve the employees in the implementation strategy.

The study recommended that the allocation of resources in the organization as a crucial element in the implementation strategy. The study showed that financial managers support the implementation strategy. However, a recommendation that the timely release of the funds allocated by the managers for the implementation strategy improved.These studies on other factors that may affect the implementation strategy in other petroleum markets other than organizational culture and resource allocation. The research implements the policy on communication and its roles in MOG Limited.

 

 

 

 

 

CHAPTER FOUR: DATA ANALYSIS, RESULT, AND DISCUSSION

4.1  Introduction

Various forces in it affected the worldwide business of a country. The fact remains that the universal relations can positively affect internal issues (Ferreira, 2009). For example, the religious laws of Muslims do not support alcohol and pork consumption. This practice can significantly impede the importation of the two products into Muslim countries because, according to them, it is illegal (haram). There are several other examples of factors that affect international business in a region or a nation. The elements can be political, technological, economic, social,and even cultural. These factors analyzed to predict the potential of a country. Furthermore, analyzing the factors above can help evaluate the current and future improvements in global business environments.

The focus of the research was on an African country, Libya, which is well famous in the northern parts of the continent. The people of Libya, at times, consider themselves an Arab community. The focus on Libya is its historical background and the full analysis of the country in the international business. Research on the factors affecting international business discussed. These factors may be political, economic, social, technological, and cultural.From the information above, clarifications made on the social, cultural, political, technical, and economic situation in Libya (Nagy and Biber, 2010 and Naima, 2005). The future of Libya and the current pattern also clarified. Each of the discussed sectors will have an impact on the microeconomic environment of Libya. The connection between the current trends and the future trends of Libya discussed.

 

4.2  Profile of the Petroleum Industry in Libya

The petroleum industry in Libya has proven to be one of the most successfulsectors in Africa. Libya has the largest petroleum reserves in Africa and is among the top 10 most considerable resources globally. Libya has more than 46 billion barrels, and petroleum production is close to 1.6 million barrels daily. Because of the large petroleum barrels, Libya has a reserve that will go on for 77 years at the current production rate with the possibility of other resources found soon. Libya is also attractive as a petroleum production and Petroleum marketing country because of its low cost of production, which goes as low as $1 per barrel as of the Year 2002. The petroleum reserves in Libya also have low sulfur content, and purification is more comfortablethan other markets. Libya’s location is also close to the European markets. Despite the challenges that Billy has faced over recent years, it has maintained its strong market presence. The main challenge in the country is supporting the production Fields mature, especially while finding the new petroleum Fields. Most of the petroleum fields in Libya have remained unexplored because of sanctions done by the disagreements that the country had with other foreign companies. Most of the petroleum in Libya exported to the European market, with more than 11% of the petroleum imported in Europe coming from Libya. It makes Lydia the third-largest exporter of petroleum into the European market that is only lagging behind Russia and Norway.

The drilling of wells in Libya first authorized in the year 1955 when the law of mining passed. MOGCorporation is the largest corporation of petroleum in Libya and controls the majority of the production Fields.

 

4.2.1        Local Petroleum Companies in Libya

80% of Libya’s oil production comes from the Sirte basin, the “oil crescent” in the Gulf of Sirte. There are 4 large oil terminals in this area – Es Sider, RasLanuf, Marsa el Brega and Zueitina. In the west of Libya there is a large terminal in the port of Zawiya, terminal Melitah, as well as two terminals associated with fields on the Mediterranean Sea shelf – Al Jurf and Bouri. In the east of the country, the Marsa el Hariga terminal is located in the port of Tobruk.

The largest amount of oil, before the work of terminals was stopped, had been pumped through the Es Sider – 250 thousand barrels per day, located east of the city of Sirte.

The second place was taken by Zawiya, which exported 240 thousand barrels a day from the El-Sharara field in south-western Libya. It produced 300,000 barrels per day.

In the third place, another port from the oil crescent, RasLanuf, transferred 220,000 barrels per day. Fourth, Marsa el Hariga – 120,000 barrels per day.

The largest oil fields outside the oil crescent are El Sharara (300,000 barrels per day) and El-Feel (Elephant) (70,000 bpd). To the east: Sarir/Mesla (155,000 b/d).

According to their five-year plan, the Libyan National Oil Company (NOC) expects to raise production to 2 million bpd by 2022 and 2.2 million bpd by 2024. This would require $15 billion of infrastructure investment. Even then, however, the country will not reach the 1969 level of 3.1 million bpd. Earlier representatives of the Libyan oil industry estimated the highest potential level of oil production in Libya at 5 million bpd.(uwidata, 2020)

 

Figure 8: oil and Gas compnies working in libya

 

4.2.2        Forien Petroleum Companies in Libya

 

lthough only the NOC may formally sell oil abroad, foreign companies have been involved in Libyan oil production since Muammar Gaddafi. As a rule, they hold a significant percentage in some or other fields in Libya. Foreign companies are present in Libya’s oil production under the Exploration and Production Sharing Agreements (EPSA).

The field is usually managed by local companies, which are subsidiary companies of the NOC. Some of them are joint ventures with foreign investors. For example, Akakus Oil Operations (AOO), operating in the south of the country, was originally a subsidiary of the Spanish oil and gas company Repsol and later became a joint company of NOC, REPSOL, OMV and TOTAL. (uwidata, 2020)

 

Figure 9: Major oil and gas companies working in libya

Source:https:www.uwidata.com

 

The Petroleum industry in Libya has been significant for the progress of the country. Despite the government monopolization of different sectors of supplies to reach and marketing. Nonetheless, some companies concentrated on transportation and marketing, especially the private sector, which was part of the multinational petroleum companies. More than 95% of the petroleum products in India handled at the petroleum terminals. The marketers also manage liquid petroleum gas. It will rain is one of the primary sources of commercial energy in Libya. The sector has more than $50 marketing companies involved in the importation and marketing of the major petroleum products. Automotive diesel petroleum and do, not the purpose, are some of the most commonly used products in Africa. The industry also handles liquefied gas with the production of different lubricants such as tar and industrial fuel. International companies in India include shell, Total, Kobil, nock, among others.

 

4.3  Background to Strategy Implementation and challenges in the petroleum industry

Once an organization agrees on the most effective strategy, the same organization is the implementation process. It is the implementation process where various organizations seem to fail. Strategic plans drawn annually and can have different impacts on the organization. It is essential for an organization or a company to have a strategic plan executed to remain outstanding within the market. The strategic implementation also involves putting together different strategies and forming an action plan. Daft (2000) not that the process of Strategic implementation requires operationalization strategy, a developmental action plan where all the institutions ensure that their internal strategies are accepted to and improved work within the organization. A strategic implementation plan involves math organizational issues and other ideas that may include the right Solutions (Nanjira, 2010, Nault, 2010, Neack, 2008, Neack, 2014, New Empirical Evidence from Libya. American Journal of Applied Sciences).

 

Strategy Formulation

 

Strategy Implementation

 

Ø  Strategy formulation is positioning forces before the action.

Ø  Strategy formulation focuses on effectiveness.

Ø  Strategy formulation is primarily an intellectual process.

Ø  Strategy formulation requires good intuitive, and analytical skills.

 

Ø  Strategy implementation is managing forces during the action.

Ø  Strategy implementation focuses on efficiency.

Ø  Strategy implementation is primarily an operational process.

Ø  Strategy implementation requires particular motivation and leadership skills.

 

Table 5: Difference between strategy formulation and implementation

Various macro organizational issues and large-scale problems affect people within the organization, preventing them from contributing towards their organizational goals. Technology refers to its technology and tools used by the organization to provide services and goods by fitting the selected strategy for successful implementation. There is a high competition rate in the business environment caused by the business context and organization changes (Newey and West, 1987; Newton, 2008;Niblock, 2002;Nincic, 2001). Norris, 2012; Nye, and Keohane, 2000, and Nye, 2004). The changes include; technological change, legal change, customers’ behavior, among others. Lack of suitable solutions to these changes will lead to challenges in the future for a business intending to compete within the environment. There are three areas specific areas within the organizational performance, which has results. The areas include financial performance, product-market performance, and shareholder returns. The output of an organization measured by organizational performance against the intended goals. Specialists such as strategic planners, operations, among others apprehended with organizational performance and development.

Balanced scorecard methodology has recently been used by various organizations to manage organizational performance where tracking and measurements of production done in several scopes such as financial performance, customer service, social roles, and stewardship of employees.  Strategic management is a process that assists businesses take a position for them to retain their relevancy over the years. Strategic management act as a set of decisions and activities, resulting in achieving the organization’s objectives within the business environment through formulation, implementation, and control of plans in which it operates. Formulation of a reliable strategy is challenging; however, the performance of a strategy is more complicated. Leaders identify the need for change before strategy formulation by scanning the environment carefully in which there is the existence of the organization.

The strategic process begins with environmental scanning. After changing people’s understanding of change, strategy formulation requires leaders to try to find different ways of translating the vision of the organization into a practical purpose. Leaders set objectives during the strategy formulation process as they analyze both the internal and external environment. They also fix achievable targets, sets the measures for performance evaluation, and finally selecting a proper approach.  Planning for the future of the organization can also refer to strategy formulation. In contrast, strategy implementation involves changes in which formed strategies converted into real actions to achieve goals and objectives.

Organizational structures in the first plants formally laid to allow the interaction and coordination between members of the organization to their jobs and allow departments to interact effectively with other departments. Research support that ideas of strategies can only be more successful if supported by a consistent structure or strategy that flow towards an inconsistent Direction. A functional organizational structure has limited chances overhauled to have more efficient use of specialist strategies that use low energy (Huntington, 1998, Hussen, 2004, IEA., 2009, IEA., 2014 and Ikenberry, 2012). Numerous micro organizational issues pertain individual’s behavior in the organization and how different actors view the strategic implementation to impact culture and resist any possible change as the employees continue to accept the new strategies. Culture has remained emotional rhetoric where organizations develop the culture tour duration of time influenced by various actions, beliefs, and individual values at different levels of the organization. Strategic change in an organization Council result of an implementation of a contemporary strategy and is an issue that is essential to the success of different farms in Libya (ken berry, 2005, Impacts, Mitigation, & Risk Management. Rutledge, 2019, Inderjeet, Linda, and Miller, 2009and Information Industry Association. 2003). International Business Publications, USA, 2013). The change management witness in different Petroleum organizations analyzed attentively from the basis of its pivotal role in all sectors of the economy. Especially in Libya known to be a significant producer of petroleum and petroleum products for a long time (International Business Publications., 2008, International Business Publications., 2013, International Energy Agency, 2005, Intriligator, 2003, Intriligator, 2003 and Jaffe, 2006). The sector is responsible for the implementation of changes in price based on energy regulations as well as economic spiral effects on all sectors of the economy that efficiently determine the performance of the economy. The lack of appreciation for a volatile environment has slackened the operation of different sectors of the economy since they are vulnerable to the fluctuations in the market.

 

Figure 10: Stategy Process

Source: Fred R. David adapted from “How Companies Define Their Mission” Long-range Planning 22, no, 3 (June 1988): ©40 Fred R. David.

 

4.4  Challenges that impact the performance in the petroleum industry

The resource-based view (RBV) explores the organization’s internal resources and how resources used to acquire a competitive advantage. The organization’s resources analysis includes its capital, reputational, physical, human, and national resources. In the resources’ deployment, it is essential to comprehend the main competences of a company. A necessary part of the procedure is the value chain concept.

Resources allocation to particular divisions and departments does not mean the successful implementation of the strategies. It is because several factors commonly inhibit the effective allocation of resources.  The elements are resources, too much emphasis on short-term financial criteria, policies within the company, unclear strategy targets, reluctance to risks taking, and lack of sufficient knowledge (Fang, 1997, Fang, and Charles, 2014). Established organizations may also experience changes in the business environment, making their significant resource base redundant resources, resulting in the inability to free adequate funds to invest in the new resources needed because of the high base cost.

There is no implementation of changes; instead, it is employees within an organization that make them happen.  People selection for significant positions by forming an effective management team with the right work relationship and skills acts as the first step in strategy implementation. Assembling a competence team is one of the cornerstones of the corporate-building action.  The core management team determined by strategy implementation. Since they should execute the strategy and find the right individuals to fill each slot. Itinvolved new people with skills in staffing issues.

Effective implementation of the strategy requires people with intellect, creativity, abilities, experience, and obligation.  Many organizations face the challenge of selecting active people for critical positions, emphasizinga lack of resources as one factor inhibiting the execution of strategy; there are either inadequate or unavailable resources when needed. Due to the shortage of skills, it is challenging to recruit the right and retain the right talent.

 

4.4.1 Technological Factors for Libya

Massive changes observed in Libya ever since the introduction of technology. The Arab spring that changed this country from dictatorship to democracy has spread broadly due to the availability of technology. The Arab spring has extensively been promoted by the technology, especially the internet (the guardian, 25th February 2011). Technology has not only helped encourage politics, but it has also influenced business significantly. This sector will also help create employment for the youth in that country by giving them a chance in the ICT sector (Mitchell, and Jolley, 2012 and Mobbs, 2009). With the increase in the percentage of employees in the country, Libya’s economy will improve. Studies show that though Libya has a strong culture, the population in the urban areas are beginning to accept changes. Technology will undoubtedly bring changes to the economy of the country.

“…The researcher distributed 64 questionnaires, which were responded and returned to the researcher. It gave a response rate of 100%. The demographic information comprised of professional experience, Gender of the respondents, age bracket of the respondents, educational level of the respondents, and job designation of the respondents. Based on professional experience, 43.8% of the respondents had professional experience of 5-10years, while 12.50% had professional experience of more than 10years. It shows that the respondents had enough knowledge of the determinants of strategy implementation MOG. However, 40.6% of respondents had professional experience of 2- 5years, which also was enough to understand the determinants of strategy implementation in MOG. Only 3.10% was less than one year in the company. In general, the respondents in this study had enough experience understanding the determinants of strategy implementation in MOG. On gender, the majority of the respondents in this study were men, with 67.2% and women with 32.8%. The findings showed that men and women were working together in the implementation of…” (Hollis, 2010).

 

4.4.2        Political factors that impact on the international business in Libya

The political system of Libya has affected international business in various ways. The political factors that affect global business include business laws, political instability, and legislation. The legislation involves trading policies, tax laws, environmental laws, and trade union positions in Libya (Moneer, 2010; Monette, Sullivan, and DeJong, 2010). The political stability of a country depends on the level of civil and political freedom. The bond between political stability and global business in the country is firm.

“…On the issue of the perception of strategic management and strategy, high-ranking managers have identified the high-level nature of strategy and strategic management. A higher percentage of individuals perceive that the strategy can be a preserve of one of the most senior levels of management. Besides, some personnel identify their jobs to contribute to the implementation process,used in long-term planning (Morçöl, 2007 and Morgan and Falola, 2012). The stability of the government of Libya varies in various ways (Alhashim, 1992). Evidence shows that there has been much confusion between operational and strategic plans. During the implementation of the strategic management in NOC, it implemented the long-term objectives. The influences of country and company are the primary evidence of strategyformulation and productivity, which is according to the perspective of the company. Lastly, maximizing revenue so that a nation can finance its public services is according to the country (Milner, 2005).

The most important force that affects international business is the political environment (Morse, 1994 and Moussa, 2005). Other political factors that affect the global business in the country are regulation, government features, trade policy, diplomatic conditions, and economic policy. The transition of the political problem in Libya has proven difficult (Mueller, 2006 and Mueller, 2009). Therefore, for the country to succeed in the international business and gain the confidence of investors, Libya has to have a stable and reliable political system.

 

In January-February 2019, protests by local tribes and pressure groups affiliated with Libyan National Army Commander KhalifaHaftar resulted in an almost complete halt to oil sales. Libya’s oil exports came only from fields controlled by the forces loyal to the Government. These are Al Jurf and Bouri – offshore fields. Eventually, oil exports fell to 90,000 bpd.More than 1 billion barrels of oil per day have not been added to the world oil market.

However, the reduction of oil consumption due to the coronavirus crisis led to the fact that the extraordinary situation in Libya had a generally insignificant impact on the world oil markets.

Half of the oil went to the Mediterranean markets (Italy, Spain and France). One fifth went to China.

Reasons for blocking oil exports were both political and economic. For Haftar and the government of eastern Libya, it was and is a means of pressure on the GNA. For the tribes and municipalities allied to them, it is a desire to redistribute revenues. The only structure that could sell oil for export was the NOC, headquartered in Tripoli. The money from the proceeds was also distributed through Tripoli and the Central bank of Libya, based here, which was not to the liking of locals and representatives of southern and eastern Libya.

4.4.3        Economic Factors: Analyzing current and future situation of Libya

The economy of Libya is highly dependent on the sector of energy. The energy is the main export that contributes to about 90% of its economy. The exporting of petroleum has enabled Libya to be among the countries with the leading economies. Amazingly, the petroleum and gas sector, which contributes positively to GDP, only contributes to just about 2% of the employments nationally. However, there have been improvements in the percentage of employment since the crisis in 2011. The table shows the economic estimations of Libya in the previous years of growth.

“…A large number of petroleum companies provided a wide range of benefits to their employees. They also helped to maintain the habits of the public sector of the country. Training programmers were unrelenting and possible innovations. In August 2016, trainees from different training institute graduated. The total number of trainees that graduated was around 214; they graduated from institutions such as Petroleum Qualifying and Training Institute. In 2017, 52 trainees graduated from MOG, RasLanuf Company, and the NOC, and they ended up introducing post-paying fuel cards. The card was to assist the citizens who had financial difficulties and were struggling to pay for fuel. The petroleum companies of Libya tried their best to corporate with different political and military forces to control them.  Therefore, in January 2017, the two companies (the RasLanuf Petroleum and Gas Refining Company) held a joint press conference. The press conference involved personalities such as military spokesperson, spokesperson for the hour, and the spokesperson of the Eastern-based government. Unfortunately, the meetings could not avoid changes in control. For example, in 2017, the LNA publicly made it clear that they had lost control of RasLanuf. In February 2018, the commander of LNA naval forces visited the Sirte Petroleum Company” (Al-Kandari, 2013).

Table 6: Economic overview of Libya (CIA Factbook, 2013)

After the situation in 2011, there was a severe fall in the economy of the country. However, after the stabilization of the political situation, there has been tremendous improvement in the economic sector. The financial system of Libya is not yet on track. There was a time when Libya had the highest GDP per capita in Africa, but it fell due to the erratic leadership that lasted for decades. The sector of agriculture shows the smallest contribution to the country’s economy. Over 75% of the foods in Libya imported from other countries. The industry and service sector contribute the greatest to the economy of Libya.

The rural parts of Libya are underdeveloped as compared to the urban regions. The rural developments are not still up to the required level. The problems in rural Libya are inadequate water supply and lack of sanitation facilities. A high percentage of about 45% of the rural areas in Libya lack improved water (The World Bank, 2013).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 11: Gross Domestic Product (GDP) of Libya

Source:http://kushnirs.org/macroeconomics/gdp/gdp_libya.html

 

From the graph, itis observable that for severaldecades, Libya has facedseveralups and downs. The figure shows the economic GDP of the country forseveraldecades. An observationthat the economic GDP has been improving for the last five yearsexceptin 2011.

The figure below shows the inflation rates of the Arab country for the last twoyears. There wasanegative situation in the previous quatre of the year 2012, no economic activities weretaking place by that time (Deflation, October 12 to January 13).

 

Figure 12: Inflation rate of Libya.

Source:http://www.tradingeconomics.com/libya/inflation-cpi

 

4.5      Strategy Management Practices in the Petroleum Industry

Results show that the strategy significant percentage of the implementation strategy influenced by the values and norms of the company. One of the organizational cultures that have affected MOGis diversity. About 90.6% of respondents have agreed that diversity has led to improved creativity, while 9.4% are against it. Statistics have also shown that norms, values, and diversity are essential to implementing the company. A meaningful relationship exists between strategy implementation and organizational culture. The same study shows that all implementation processes have significant relationships with the corporate cultures in most companies and organizations. The most recommended boost for the success of a company is the reward system. The reward system implemented in the company of MOG, and it yielded since all the employees were happy to participate fully for it.

The primary purpose of a conclusion is to answer questions, recommend solutions that can help improve conditions, and give suggestions on establishing the implementation strategy in MOG.

 

4.6 Strategy Implementation Process in the Petroleum Industries

There was no evidence of young managers becoming aware of oft the strategic orientation of the corporate. Specific roles reviled greater awareness, focusing on the NOC corporate center. The knowledge and understanding of the operational plan through the organization. The Minister of planning asserted that NOC developed a clear vision concentrate on understanding the different strategies based on changes in the corporate environment. During the interview, only to most senior manages mentioned the main strategy elements. The vulnerability between NOC companies and organizations withoutshared understanding in terms of change leadership at the management level in the organization. Less openness to change in the corporate results into a centralized formulation of the strategy and decision-making processes. Exposure to change promoted by the Shell case led to the adoption of scenario-based planning to consider the internal impact of the radical change in the organization’s operational environment by exploring views for responding to the changes, which led to the challenge of senior managers’ traditional thinking.  Top managers formulated and implemented the prominent opinions of the Libyan NOC as supported by operational monitoring.

There was the formation and implementation of corporate strategy at the corporate level and identifying systems for the industry and business in response to a country strategy. There was a lack of clarity on where strategic plans might be,together with their details.

Human resource management did not contribute to the strategy. However, it followed the procedure, despite a lack of evidence of planning the internal and external factors from environmental scanning.

Numerous possibilities and obstacles would help or prevent the formation of a cartel. Cartels characterized by agreements among different competitors to control the price of a good or the output. After agreeing on a particular form of communication used by the organization (Kuorelahti, 2018, p. 9). Cartels discourage any production or success of the nine members, and therefore they have to achieve a certain level of stability. Some of the most successful cartels are those that discourage other producers from controlling the prices. The success is through allocating and enforcing production quotas as required (Farimani et al., 2019, p. 4). Numerous factors taken into consideration before forming a gas cartel under the existing rules and conditions. The issue of Libya has been one of the concerns for the majority of the petroleum-producing countries. Libya is a country, which endowed with resources and has very high potentials. The African country has a large reserve of natural resources. The political situation in Libya is likely to stabilize after the first general election. With this stability, foreigners will gain their confidence in the country and return to invest. The government of Libya is trying to emphasize other factors aside from energydue to the country’s overdependence on petroleum.

 

The country is likely to stabilize as soon as possible if there are no other political unrests shortly. The other factor that the government has to put into consideration is the fact that continuous dependency on the energy sector will affect its economy negatively. It will occur because its expenditure will be large (The Tripoli Post, 23rd August 2013). IMF estimated growth of 20.2% in 2013, 10.14% growth in the following year (Khalek, 2013). It is correct to mention that, if the economic and political situations remain intact, the economy of Libya will experience tremendous progress. The current government bend towards improving the manufacturing and agricultural sector. It is likely to bring significant economic diversification (Mulangu&Kottoh, 2019, p. 7).

 

Libyan NOC had not started a discussion on the strategic partnership between the companies and human resource management.  Hence, an assurance for the right human resource management for NOC had proven a challenge when needed. It increased the inability of the companies to fulfill the government’s revenue requirements. Making human resources as the ultimate organization’s available resources, hence support, needed the organization to remain healthy and sustainable; therefore, a robust strategic approach required in the human resource management department.

The classical rational strategic management approaches closely associated with the findings, emphasizing that performance delivery was appropriate. There was no power delegated evidenced. Senor level dealt with urgent issues. Hence the confirmation on the difference between political knowledge on NOCs policy and strategy tension.  There was a close association between strategy formulation and corporate planning model recognized in private petroleum companies. To summarize, formulation of strategy using a rationalist corporate planning model determined by political necessities as state owners set do not set personal objectives but political objectives driven by NOC companies’ vision and mission.

There is a recommendation of three distinct changes for National Petroleum Corporations, according to the proposed model. The first stage is the board team’s effectiveness management because, without an operative board, a corporation cannot develop a strategy and strategic direction. The researchers’ proposed Board effectiveness included in the first stage of the model.

 

Figure 13: Proposed model of Strategic Management for State-owned Corporations

The political meetings and the boards together with senior managers required knowledge and understanding between them. The research discussed gaps at the board level by providing intensive development courses. There is a considerable implication for the MOG companies, particularly the idea of the several changes experienced in the country. Transitional National Council continuously set mission and vision after the General National Congress.  The key players, however, probably need help and support to produce meaningful statements that translate into strategies and policies of the company as an aspirational statement. The NOC and individual company’s training and development efforts are required to allow them to produce business strategies that reflect the approach of the corporate and operational objectives in long terms. The process of conducting fieldwork before the 2011 Libyan brought radical changes by events in that year. It makes it impossible to examine the events’ impact on NOC. However, there is a relationship between political meetings and militia activities to stop the production of petroleum caused by the protest against the unfair distribution of revenue as reported in the media. A mission and vision statement developed simultaneously, even though it lacked detailed information on how the NOC Board has produced it. There is also difficulty interviewing the Board members caused by work and political pressure, making it challenging to obtain a complete picture of the sensitive information.

 

4.7 Strategy Formulation Process

Research shows that 78.1% of people agree that the manager of MOG released the funds for the implementation strategy on time. Allocating the resources on time to various departments does not mean that there will be successful implementation. Some of the factors that may lead to the unsuccessful implementation of the strategy are organizational policies, overprotection of resources, among others.

“…High-ranking managers identified the primary factors affecting strategic management procedures in NOC industries as majorly internal. They majored in the essence of political stability, which has proven to be correct by history. Although culturaland social trends viewed as almost non-influential, itacknowledged that high-ranking managers’ social networks and relationships could interfere with the performance of the organization in case of inappropriately using. OPEC assists in boosting NOCs beside the external shocks; therefore, the influence of the supplier and the buyer leads changes inthe strategic plan ignored since most companies viewed them as non-essential. The main problem was intercompany domestic rivalries. Generally, outcomes on the factors influencing strategic management in different aspects of operation showed that not much time given for the implementation of the two strategies in petroleum companies worldwide. There continued a robust trend in the operational instead of strategic management (Khalifa et al., 2019).

Achieving a successful implementation of the strategy in Libya, the financial manager was required to release the funds on time. About 78.2% of the company’s investment directed toward technology. Most of the respondents agreed with the implementation process at MOG.

It is important to note that gas reserves concentrated in small countries as compared to the petroleum reserves, which shows that it is easier to exercise control over smaller countries, especially those that are producing gas.  Also, fifty-three percent of the global and gas reserves found in countries such as Russia, Iran, and Qatar. It shows that not many countries can access gas reserves despite the European nations (Outhuijse, 2019, p. 8). Conversely, countries such as Venezuela, Iran, and Saudi Arabia have the world’s largest petroleum reserves, and they have 43% of the reserves in the whole globe (Katz, 2010). The market conditions have also become more favorable for confirmation of the cartels, making it easier for countries gearing towards achieving a global cartel success to be close to their ambitions (Farimani et al., 2019, pp. 4-6). In the next several years, the European countries predict the possibility of having a gas glut in case the problems of petroleum domination not addressed.

The performance of the company relied on elements such as technology, training personnel, strategy formulation, and implementation. Results have shown that about 25% of the respondents have agreed that the company has well-trained staff in every sector. The company has strong management,together with an able team, blends entirely for the first step in implementing the strategy. The strategy of implementation determines the type of leadership that it requires for successful execution with the right people at the relevant posts.

 

4. 8 Strategy Control Process

The country has strong cultural norms and culture, interfering with the consumption pattern, business, and economy. The gap between the developments in the urban centers and the rural areas is broad (Wıllıams, 2002). There are situations in that nation which not ignored. The first one  isthat the people of Libya are gradually accepting technology and modern living as part of their daily lives. Secondly, the social and cultural diversities between the Libyans in urban centers and those in rural areas are widening.

“…putting into consideration the duration before and after 2011, the two factors are likely to affect the petroleum and gas sector of Libya. The two factors are the role of individuals in the company and the degree of stability. The gas and petroleum companies of Libya have been irrepressible despite the interferences caused by insecurity, fighting, and revolutionary changes. The NOC and its branches have been more stable when compared to the government of Libya. Furthermore, individuals and the roles that they have played affected the industrial sector from the unpredictable influence of Gadhafi. Doneby utilizing the positive influence of the chairperson of NOC, Mustafa Sanalla. Generally, during the error of 2011, the sector of petroleum in Libya presented irony, the conflict, and insecurity the country tremendously affected the production, infrastructure, and exports.”

Fortunately, the NOC and other companies remained protected from the destruction. Several individuals have fought to control the petroleum fields, terminals, and pipelines to benefit directly or indirectly from their finances. These individuals have ended up seeking cooperation with the NOC. The chances of these changes continuing are high since the gaps in the government are not completely sealed. It will therefore prevent the investment of gas and petroleum up to around five years to come. ” (Khalifa, et.al, 2019).There are improvements in the urban parts of the country. The developments are on women empowerment, on improved water supply, on the improved education system, and lastly, on the development of modern facilities, the rural areas left behind. It shows that the Libyans have accepted modern lives. Therefore, the likelihood of cultural improvements taking place is higher.

 

4.81          ICT Development

 

The communication and education sector has tremendously improved due to technology in Libya. The country has planned to develop an ICT facility by introducing ICT as a subject in their schools (Hamdy, 2007). It also discovered that rapid development in technology has led to the changing of the humanitarian sector. The table below shows the ICT situation in Libya before 2007.

Table 7: ICT situation in Libya before 2007 (Hamdy, 2007)

Currently, the scenario is better than the one mentioned above because the number of internet users has increased to about 17% in small and medium-sized businesses (Molle, 2004 and Moneer, 2004). The table above shows the number of internet users in Libya. ICT has provided much assistance to the developing industries and small businesses. It has also helped to maximize the potential of the tourism industry in Libya. Furthermore, it has also helped promote the economic development of this country in the northern regions of Africa.

 

4.9  Strategy Innovation Process

Meaningful relationships that exist between the culture of the organization and implementation of strategy are the factors that influence the successes of commercial banks in Libya. All categories of organizational cultures have significant associations with the implementation procedure, even though there is a variation in the extent of the culture’s influence, the main difference is clan culture while least is hierarchy culture (Adrian, 2012, Al Zoghbi, 2001; Alessandro, 2005, Alfarajani, 2007 and Alfergani, 2010).  Studies on the culture show that culture is vital if the organization has to embrace change successfully and maximize human capital value. Culture management should be management capability, and a necessary condition for organizational success should include the right culture. Determining what the productive culture is has proven a challenge for the managers for their organization and, when culture necessary, ways to change the organizational culture effectively are.

Culture as a means of improving internal integration and coordination. Organizations identified culture as an essential mediator when adoption to the business environment through the open system view. There is a contradiction in the traditional view of a strong culture to organizations’ ability to adapt and change. Culture is of importance for facilitating the innovation of the organization; accepting new ideas and perceptions requires a different culture to organizational change. An influential culture within an organization usually understood as a conservative force; however, it is a contemporary business environment; an influential corporate culture may be dysfunctional making change to require orientation. Because of the stability of an influential corporate culture, which does, not there can be resistance to change within the organization (Al-Ghamdi, 2010 and Ali, 2011). Strategy implementation is challenging because of deep-rooted cultural biases resulting in resistance to implementing the new strategies in companies with defensive cultures.  Because employees view organizational changes as a threat, making them favor continuity and security.

Bureaucratic culture originates from bureaucratic organization’s features described Max Weber, a German Sociologist. Weber outlined essential elements of organizations bureaucratic when analyzing bureaucratic organizations, and considerable attention devoted to the cultural values and modes of opinions that resulted in the rise of modern bureaucracies. Dominant cognitive orientation reflects bureaucratic structures and processes of modern societies. For example, strategy’s failure or success not recognized to succeed spirits of success or supernatural beliefs but reasonable causes like good communication and flexible method to change.  An essential element in organizational bureaucracy is a culture of a rational approach, which enables an organization to achieve its strategic goals.

The reason for the organization’s existence described in its mission. The most crucial cultural trait is the mission, and organizations should focus currently on the task.  Embracing organizations’ mission culture, leaders concentrating on establishing and communicating the organization’s mission and purpose, and employees allowed designing their work activities with the job. Leaders supervise and give overall direction, encouraging different decision-making when determining the details of operations to execute the plan.

Leaders should take bold and risky activities in an entrepreneurial culture, on behalf of his company.  By searching for new opportunities helps an organization when making a strategic plan. Chief Executive has the central. Strategy success in entrepreneurial corporate requires making significant, bold decisions presented in entrepreneurial culture than a job. Employees work as a team in most organizations. The way organizations can exercise entrepreneurial culture is by treating people with respect (Ali, 2007, Alison, P., 2007, Al-Kandari, 2013, European studies line spaces., 2010, Evans, and Newnham, 1998 and Falola, et al., 2012).  A base for active and sustainable organizational culture provided by respect and trust among its staff.

 

4.10Business Outsourcing Process

 

Libya is a country, which endowed with resources and has very high potentials. The African country has a large reserve of natural resources. The political situation in Libya is likely to stabilize after the first general election. With this stability, foreigners will gain their confidence in the country and return to invest. The government of Libya is trying to emphasize on other factors aside from energy, since the country’s overdependence on it.

” … The last twenty years have seen increasing academic research into strategy and strategic management, more recently as a phenomenon that contributes to shaping countries (Whittington, 2006). Kotler et al. (1997) term this ‘total national approach strategic market management,’ linking company growth to national wealth and stressing the importance of strategic vision followed by implementation. Despite the importance of petroleum to both national and global economies, the literature review indicated a lack of relevant literature on strategic management in national petroleum companies (NOCs) (Marcel and Mitchell, 2006) except on issues of global concern such as politics, carbon emissions, global warming and security of energy supply. Even recent major research programmers have added little to the knowledge of this field, with Marcel and Mitchell (2006) the notable exception (Baker Institute, 2007). Since strategic management has inextricably linked with strategy and so both were taken into consideration with due regard for the specific context of the MOG Corporation. This paper focuses on the findings of a recent empirical study that explores senior managers’ perceptions of strategic management processes in the Libyan NOC. To achieve this aim, first, a brief review of the literature presented. The methodology adopted and the findings of the study discussed in some detail, and relevant conclusions reached…” (Khalifa, Dabab, & Barham, 2019).

The country is likely to stabilize as soon as possible if there are no other political unrests soon. The other factor that the government has to put into consideration is the fact that continuous dependency on the energy sector will affect its economy negatively. It will occur because its expenditure will be large (The Tripoli Post, 23 August 2013). IMF estimated growth of 20.2% in 2013, 10.14% growth in the following year (Khalek, 2013). It is correct to mention that, if the economic and political situations remain intact, the economy of Libya will experience tremendous progress. The current government is bent towards improving the manufacturing and agricultural sector. It is likely to bring significant economic diversification in the country.

 

4.10.1    Major Export and Imports

Libya majorly exports petroleum or crude petroleums, which is around 95% of the total exports, iron, and steel, which is less than 1%, and lastly, chemical goods, which are about 1%. The main exporting partners of the country are China, Spain, Italy, France, Germany, the UK, and the USA, among others. The products that Libya imports include Cruise ships refined petroleum’s, Automobiles, Agricultural goods, Iron Ores, and Electronic goods, among others (CIA Factbook, 2013)

 

4.10.2    Trade/ Bop of Libya: related to international Business

Libya is a country in the northern parts of Africa. It has a population of about 7.16 million people. International businesses majorly interfere with the balance of payments and the balance of trade. The two balances are the fundamental terms in the country’s economy. The figure below shows the significant imports and exports of Libya to other countries.

 

 

Major exports Major imports Major exports countries Major import countries
Petroleum petroleums, crude (83%) Petroleum petroleums, refined (15%) Italy (33%) Italy (17%)
Petroleum gases (8%) Cares (4%) France (13%) China (17%)
Petroleum petroleums, refined (7%) Cruise ships and similar vessels for the transport of persons (3%) Spain (9%) Korea, Rep. (11%)
Acyclic hydrocarbons (1%) Insulated wire and optical fiber cables (2%) Chain (9%) Egypt (10%)
Mineral or chemical fertilizers (1%) Iron ores and concentrates (2%) Germany (9%) Germany (10%)

 

Table 8: Balance of Payment scenario of Libya

Source: Alexander Simoes (The Observatory of Economic Complexity: Libya Exports, Imports, and Trade Partners).

The central bank of the government of Libya formulates the balance of statements. The balanced ideas show the economic relations of Libya with other countries, while the balance of payments arranged in different ways to encounter various requirements. There are two types of balance of statements. First on being the capital account, while the other one is the current account. The existingreport represents the direct investment moves, government borrowings, trade financing, and value of products.

On the other hand, capital account represents the short and long-term inflow of cash paid to foreign accounts. Libya launched an approach to its economy after resuming trade with the European Union (Badcock, 2004). The summation of the transactions every Libyan resident with the rest of the world known as Libya’s balance of payments.

 

4.11Individual Company Implementation Strategy

The Arab country is a middle-sized country with a developing economy. There are adjustments done in the country to promote the global business and the improvements mentioned below;

  • The companies should hire potential managers with a competitive staff to develop the economic relationship between their country, Libya, and likely foreign countries.
  • Increased Business negotiation with foreign countries and the government regulations made it more accessible.
  • The political stability of the country well improved by adjusting on security and evoking barriers and restrictions to ease global trade.
  • There should be a Mutual relationship between Libya and other countries.
  • The country should improve its education system so that the necessary skills acquired to develop the economic conditions in it.
  • The economy of Libya will develop when the government decides to measure the factors that undermine its economy and security then correct them.

The economy of this country characterized by factors such as low living standards, trade deficits, illiteracy, and health issues. The government should assess and correct these factors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER FIVE: SUMMARY OF THE FINDINGS, CONCLUSION, AND RECOMMENDATION

 

5.1 Introduction

The current economy of Libya primarily dominated by the public sector. Most of the employment opportunities created by the public sectors. The government of Libya has a significant influence on all industries. This domination was mostly available in the regime of Gaddafi since his authority based on the ideology of communism. There are chances of change in the privatization, which has begun in the country. Estimated that, by 2050, a large part of the economy will be under the private sector.

5.2 Summary of the Findings

The study stated earlier that the socio-political-economic situation in Libya is tremendously improving after the crisis. The country is slowly recovering from the losses later on (Naisbitt, 1994 and Nanjira, 2010). It is recovering in that the rate of unemployment is reducing, it has a democratic government, the GDP is growing, and international trade is developing significantly. These steps to improvements have brought hope to this country (Nault, 2010 and Neack, 2008). Libya is considering focusing on decentralizing its economic dependency, which is a perfect sign. The threat that the country may face is that of its history, the 2011 crisis.

“…The research was seeking to find out the effect of resource allocation on the implementation of the strategy at Libya Petroleum in Kenya. The findings of this study showed that the company had invested more in technology and had enough trained employees in all departments for strategy implementation. It helped the company to be able to utilize the specific budget allocated for strategy implementation. The budget allowed the company to translate the strategy from words into actions. Finance managers supported strategy implementation by releasing the funds timely. However, there was a need for improvement in releasing funds timely to support strategy implementation effectively…” (Hollis, 2010).

The mentioned threat not taken lightly because of the supporters of Muammar al-Gaddafi. Since the mass uprising in Libya, which occurred about two years ago, there was still an absence of order. There was insecurity because of the consistency of political assassinations and fighting (BBC News, 28 November 2013). It showed that there was still an absence of stability. However, the country’s economy can develop rapidly when the political situation managed and put under control.

 

5.3  Strategic Implementation Practices in the Petroleum Industry in Libya

The state-owned enterprises produce a highly valuable worldwide commodity; NOCs create both the public value and deliver optimum profits for the country over a maximum time-span. The primary purpose of the NOCs produces gas and petroleum since the day of their establishment. 80%-90% of world petroleum reserves controlled by the NOCs, making them be in the global market where there is the interaction between the market demand and political forces. Hence, the complexity of their strategies and strategic management than those of the multinational petroleum companies and the excellence in strategic management through expertise is essential.

State-owned enterprises also share one major characteristic with organizations in the public sector. The character is constraints imposed on the choice of the availability of the strategy to interrelate with the social needs, among others. NCOs face extraordinary challenges despite controlling the reserves considerably. They have to compete in both national and political expectations and meet the demands of the market. In developing countries, NOCs usually are a means of political gain achieving different goals other than increasing government revenues, for instance, employing nationals and providing food and other subsidies. There is a challenge in the identification of national missions due to the emergence of two strands. The first is the protection of national hydrocarbon wealth and promotion of the development of the economy, and the third is supporting political concern abroad.

The difference influences the creation of value in structural, competitive, operational, and exert of the market.  NOC management requires experts in the petroleum industry and public administration who have high-level skills in politics. The formulation and implementation of the strategy require teamwork from different backgrounds and disciplines such as politicians, political advisers, managers, and leaders. Identification of different operational professionals and strategic responsibilities also proved a challenge within state-owned businesses. Strategic business-boundary issues cause complexity, price decisions, among others. NOCs experience less impact on the hostile relations caused by full control and marketing factors such as competition due to policies and quotas of OPEC.

NOC’s management requires an understanding of the notion of the Schools of Management thought, taking into consideration the evolution of strategy and strategic management over time. A particular approach that proposed where for one to manage NOC, he must suit a given condition such as high or low insecurities, and environment control.Even though Libya has the highest earning from the exportation of petroleum, there are also high unemployment and social inequities. The other problems Libya encounters a lack of economic diversification, underdevelopment in the agricultural sector. Moreover, overdependence on specificpetroleum sectors. After the crisis in 2011, the country depended entirely on imports for itsprimary domestic needs. During the civil war, most of the foreign businesses in it shut down, and after that, it had to maximize security to gain the confidence of foreign investors (The Daily Star; 20 October 2012). The country is a member of several organizations, both regionally and internationally. Some of the organizations are UNWTO, United Nations, IMF, OPEC, UNCTAD, IDA, African Union (AU), UNESCO, OIC, IDB, among others. The country is not entirely a member of the World Trade Organization (European Commission; 2013). The other part of the report clarifies the potential, future developments, and the international economic environments of Libya.

Even though several factors facilitate the formation of the gas cartel, some obstacles prevent its potential establishment. The first is that no transportation uses a unified international price for the gas and is thereby preventing the cartels from having a clear target on the actions they should coordinate (Gobble, 2017). The prices of gas assigned to long-term contracts defined by the existing market process. Besides, they are dependent on the producers that prevented it from exaggerating the price of gas (Van de Graaf et al., 2020). It means that the contract prices are determined before cartels set them. Despite the conditions gradually changing, there is a continuous limitation on the formation of gas prices, which makes it difficult to manipulate the process (Farimani et al., 2019, p. 6).

While the liquid natural gas can be loaded on tankers and taken to places where there are reports for it to received, there are suppliers who prefer to work on long-term contracts. Due to the relevant costs when building or setting up a liquid natural gas infrastructure by the government (Huffman & Anderson, 2017). Several consumers have appreciated the security in long-term contracts he liquid natural gas infrastructures (Stent, 2010, p. 23). In 2003, various contracts regulated from the sales of liquid natural gas, and a 20% dropped in the year 2005 due to the unconventional supply of gas (Jones & Sullivan, 2019). There is a tremendous increase in sales in the United States as the demand for imported liquefied natural gas drops.

 

Libya, as one of the petroleum-producing countries, seek a high uncertainty in the environment by maximizing sustainable yield to develop and expand their economies, resulting in a potential issue. OPEC used scenario planning to illustrate its acceptance of the possibility of the environment in which they operate and its inability to control the nature of the environment even though there is regulation reliance on the petroleum supplies influencing prices.

Petroleum exploration and mining require long term planning linked to the sustainable commitment of essential resources.

There is also a change in strategic approaches, the differences between strategy formulation and implementation recognition. Another difference is between the long-term planning and strategy aiming to respond to evolution in the business environment, and between strategy at different companies, business environment, and operational level.  Approaches to the policy have four classified groups; classical, procession, evolutionary, and systemic. The traditional approach adopts a stable environment; evolutionary assumes a reaction to change to minimize profit, whereas processual and systematic emphasizes the formulation of energy and organization operation in its environment, respectively.

The theoretical framework considered different strategic management models. From the school of strategic management, the paper examined three practical approaches, which were rationalist, evolutionary, and processual. There is a similarity between the rationalist and classical school of strategic management, which requires a distinction of the best strategic management approach through rational decision-making. Evolutionary schools of strategic management insist that decision-making is not reasonable since companies’ reactions in their environment; hence, the perception of the strategy to be visible is not clear.

The emphasis placed on the process of strategy creation makes processual school different. However, there is a similarity in the stages of the formulation of strategy and its responsibilities. The design school developed by Mintzberg had a consideration of whether to classify it as a strategy model. Another concern was on scenario planning, Wheelen and Hunger model, public sector strategic management, and the private petroleum major’s strategic plan. The only model derived from research is Grant’s model in petroleum companies, the company firmed based on yearly planning circles with forecasts, trends based on scenarios and expectations, which are built-in planning guidelines which are a factor limiting the applicability of the model.

The Wheelen and Hunger model applies to all sectors since the external and internal environmental scanning. The model’s strength lies in explaining the activities involved in each stage during the strategy formulation, such as its mission, objectives, strategies, and policies. The weakness of the model is that it does not consider the types of working relations as well as the activities associated commonly found in NOCs.

The creation of NCOs has particular political, social, and political determinations; hence, this study selected the theoretical model developed by Karami. Karami’smodel first step is mission, then internal and external environmental scanning to improve the long-term objectives of the organization. In the model, the long-term objectives are further broken down to short-term objectives while other models combine the long-term objectives when forming an effective strategy.  After breaking down the long-term, the model produces the operational procedures, policies and applicability, control, and evaluation method. Several factors presented that influences senior managers’ opinions of the strategic management process identified during the review of the literature. These factors grouped into internal and external factors; they shape perceptions of senior managers as well as operation. Senior managers’ opinions also affected by the impact of the sequence when forming and achieving the company’s strategic objectives. The analysis of data collected during fieldwork influenced the effectiveness of both the senior manager’s perceptions and the Board.

 

5.4 Challenges of Strategic Implementation in the Petroleum Industry in Libya

Well-informed choices are crucial for these organizations as it allows them to make a profit. In addition to the meaningful existence of multilateral interactions, the bilateral coordination between the members of the cartel, including Russia and Algeria, are increasingly gaining power with the consistency that they have in the market (Gobble, 2017, p. 8). Many other member countries, such as Qatar, have also been members of the OPEC. They, therefore, havea history of cooperating and communicating in the market, and they understand the impact of such cooperation. Russia is currently engaging in the GECF to strike a contract on its frosty relations with the OPEC members (Mulangu&Kottoh, 2019, p. 7). It is important to note that Russia owns the majority of Gazprom and is legally monopolizing the gas exportation. It makes Russia and Gazprom control the outflow of the gas despite several factors and contradictions that they have faced (Miller, and Dingwall, 1997and Milner, 2005). Libya is a country in the northern parts of Africa, which gained its independence in 1947 from Italy. Several neighbors border the country from all directions. Sudan borders it from the east, Algeria, and Tunisia from the west, and Chad and Niger from the south. Despite being the biggest country in the region, Libya has a relatively low population. A dictator, Colonel Muammar Gaddafi, formerly ruled Libya for about 42 years. In 2011, the error of dictatorship ended due to the uprising civil war that had lasted for over six months. Libya first performed its parliamentary voting in June 2012 with General National Congress emerging as the best party. The country found in the shores of the Mediterranean Sea and richly endowed with minerals such as petroleum. Petroleum is Libya’s primary export, and it entirely depends on it. About 90% of the country’s earning come from exporting petroleum (Otman& Karlberg, 2007). From that, it is essential to note that Libya exclusively depends on the sector of petroleum exportation. The ordinary income of Libya per capita is about $12300 (CIA Factbook, 2013). It is one of the most considerablerevenue in Africa. Libya has an upper-middle-income economy according to the reports issued by the World Bank. The economy of Libya began to rise after the national crisis that took place in 2011.

  • Reserve assets: transactions in a foreign exchange involving other items that are not money. These items can be in the form of SDRs and monetary gold. The position of Libya in the IMF and CBL records helps measure the reserve account of the capital account (Trading Economics, 2012).
  • Goods: the statistics of the petroleum products exported and other non-petroleum products used to calculate the value of every exported product.
  • Services: Services offered by Libya include insurance, travel, transportation, and other services. Libya also simplifies transport by helping passengers to acquire tickets that allow them to sell their products to the residents.
  • Travels: this is a crucial factor in the present-day account of the payment of balances.
  • Private transfer: this involves transacting money collected from the sales of goods to foreign countries.
  • Other transfer; these include government services such as supreme transactions, revenues, and other government donations.

Current transfers are abroad range of payment transfers that are collected.

Financial account: direct investment, there are significant components of the asset, such as portfolio investment. This type of investment directly influences the economy of Libya. Libyan foreign banks, Libyan investment banks, and the CBL provide the statistics on Libya’s investments. Various commentators have compared the incoming organizations to the old OPEC, which formed in the year 1960 and exerted a little influence on the market, thereby receiving increased attention up to the year 1970. In the world of petroleum production, the producers are currently becoming formal with an improved exchange of information and market analysis, which are available to them to make appropriate choices (Krutikhin& Overland, 2017, p.9).

“…the effects of strategy implementation on performance of the organization than focusing on the fragmented elements of the whole operations. The operations include effective competitor responses to strategy, unanticipated market changes, application of insufficient resources, and failures of buy-in among several others. The strategy’s implementation broadly recognized as one of the most significant weaknesses of all the strategic initiatives. According to Metric (2014), there is always a requirement of focusing on the essential attributes of a managerial position. The study realized that several organizations have tried to overwhelm this problem through their managers. The case study used to approach and illustrate the pitfalls involved in the case study. They argue that most fundamental attributes would lose their strategic effect without greater attention…” (Khalifa et al., 2019).

 

5.5 Limitation of the Study Problem

One of the main strategies for improving business performance is increasing numbers of senior managers in management who implement the operations better.  Strategy implementation is also the main challenge facing business managers today.  The lack of interest for implementation of the strategy is due to the likelihood of failures in strategy implementation, the process is highly complex, and the implementation process is less desirable than formulation and middle- level managers experiencing practical difficulties during the research. There is experiencing more challenges in research despite the neglect by scholars and consultants when implementing strategy.  Achieving the organization’s intended strategic, there is a need for it to manage these challenges effectively.

There is a long-run failure for organizations that fail to develop their strategy.  Methods of developing strategies and designs that ensure researchers have developed structured processing.  There is a gap between knowing what to do and doing it.  The knowledge of systematic in an organization indicates how a well-conceived strategy implemented in real day-to-day operations (Fattouha, and Darbouche, 2009;Fattouha, and Darbouche, 2009 and Favennec, 2011). Top management commitment affects the implementation of the strategy.  Since it is a significant problem hence when implementing the process, there is a need for managers to show their willingness to demonstrate power and loyalty for it to succeed.

Organizations in both the private and public sectors have carried out many types of research on different elements of the implementation of strategy in Libya. The topics examined include; factors influencing strategy implementation among local non-governmental organizations, factors affecting the successful performance of projects in NGOs within urban slums in Libya, challenges affecting the implementation of corporate strategies in the electricity sector in Libya (Fayez, 2012). Conclusion on the difficulty in strategy implementation made by researchers discussing factors affecting strategy implementation in government parastatals, and factors influencing strategy implementation of water supply firms in Libya (Ferguson, 2005, Fernando, 2011, Finon, and Catherine, 2007, Flemes, 2010). Frank, 1998 and Friedland, 2009). Several kinds of research view the outside of the petroleum industry. Still, those done in the petroleum industry do not include the critical role of leadership during the strategy implementation process and response methods to change affecting the industry. This research helped to recognize elements of strategy implementation in the petroleum industry, focusing on MOG.

An essential element of the strategic management process is strategy implementation. The strategy implementation process viewed as the process that converts the formulated strategy into various activities leading to the achievement of the vision, mission, strategy, and strategic objectives of the organization. The process demarcated as dynamic, interactive, and complex. Employees and managers have to make a series of decisions and carry out several activities. Organizations influenced by different interconnected internal and external factors when turning the strategic plans into reality for them to achieve strategic goals. The process in which organizations identify prospect opportunities through a dynamic process is another definition of strategy implementation. Different forms of learning used in a company caused by the threats in the business environment, which results in a strategic reaction, which acts as the main trigger for the learning process in the company, is also another alleged definition of strategy implementation. The process where organizations use their available resources to execute strategies, rules, and agendas and activities planning to gain a competitive advantage is also the definition of strategy implementation. The mentioned definitions indicate that the organization`s development relies on the successful implementation of its strategy.  However, several factors are affecting the strategy implementation process because it is exceptionally complex and interactive.

 

5.7 Implementation of the Study on Policy, Theory, and Practices

The implementation strategy drew much attention from strategy formulation in strategic and organizational research. In the management world, one of the main routes to improving business performance is by increasing the number of senior people. However, the challenge is that implementation is one of the most difficult challenges that businesses face today. With the problem, the management has to be competitive or able.

Strategy implementations are only successful when the strategies planned and matched to achieve the organization’s visions. The components of strategy implementation are; interpretation, communication, adoption, and actions that are not automatically successive and inseparable. Traditionally, the strategy has consisted of senior managers, the Chief Executive Officers and Managing Directors, and many more managers recognized to be involved recently.

 

“…The contemporary environment imposes a leading role in communication when talking about changes and large projects. It means the continuous development of necessary instruments in the form of skilled managing staff. It means continuous development of credibility of the managing staff and internal communication through honest and open communication that speaks about employee issues in a human tone. Restricted openness in communication is a big problem for many organizations (Zajkowska et al., 2011). Many barriers in the information flow from the bottom to the top, as shown by the presented surveys. As a result, members of the management cut off from the feedback from employees and from the important information possessed by regular members’ employees who work in the first line. In turn, employees perceive the managing staff cut off from reality, which damages their image in the eyes of the employees. The social media, which gives the employees a better chance for speaking, can provide the opportunity for many companies to change their culture towards greater openness…” (Mehta, 2011).

 

For a company to survive in long terms in a competitive environment, strategic management needs to have strategic management. An increase in academic research over the last twenty years on strategy and strategic management contributes to the shaping country in their comprehensive national strategic approach. In the market, management done by linking the company’s expansion to the country’s wealth and emphasizing the essence of strategic vision the implementation of the idea. Lack of relevant literature on the importance of petroleum to national and global economies indicated in the literature review on the strategic management in the NOCs except the global issues such as politics, carbon emission, among others. The primary research programs have added little knowledge in these fields.

Strategic management connects to strategy; hence, a consideration taken concerning specific contexts of the Libyan NOC.

The findings of the paper based on the recent empirical study aiming to explore the senior managers’ opinions on the strategic management process in NOC. There is a presentation of a brief review of the literature followed by methodology used then finally, a discussion of the findings in detail before reaching a relevant conclusion to achieve the aim.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusion

The findings and the analysis indicate that the strategic management have a positive impact on the performance.The increase in technological advancements over the past decade has opened an avenue for foreign reserves and countries to have unconventional gas, especially in North America, which also changes the dynamics of the natural gas market in the world (Marshall et al., 2016, p. 9). From the year 2006 up to 2009, the output of shale gas increased, leading to gas prices reducing extensively in the United States by more than 40% (Marshall et al., 2016, p. 6). Technology has also led to the United States boosting its gas reserves by 50% over the last few decades, thereby entailing less demand for gas produced in Russia. While shale gas owners have been advocating for reducing supplies of an unconventional form of gas, their advocates believe that such conditions have a long-term impact on the global supply (Anderson & Huffman, 2017, p. 5). Other findings show that the discovery of the unconventional source of gas evoked by the invention of technology can serve as an alternative to the traditional pipeline gas and a substitute to the Russian supply, which has made it challenging to acquire conventional gas

Libya is a nation endowed with natural resources but has no proper social, economic, and technological developments because of several factors. The main factor that undermines the development of the country is politics. Libya is a country with the best economy in the North African region. Political situations, significantly the crisis obstructed the political developments. The government is reconstructing after the 2011 crisis. The factors affecting international business in the country either directly or indirectly discussed. The assignment provides detailed information about Libya and its full potential. The improvements in the country  discussed. With this assignment, one can picture Libya in the future when the advances made in Libya.

The real situation on the ground nowadays has explained how the relationship of Libyan tribes with political elites and the central state has evolved over time which confiremnd their negative impact on oil and gas industrial where several pipe lines closing and export terminl shutdown toke place many times. Tribestate relations in Libya are historically fluid, pragmatic and opportunistic. In this tribal context, the leaders of subsequent regimes realised they had to earn the support of influential tribes by carefully crafting patronage networks, while exploiting tribal loyalties and inter-tribal tensions for their own good. Tribal leaders, in turn, needed to remain in favour with political elites to ensure their political relevance and access to state resources, while also using their social and military power to effectuate regime change. The threat imposed by the marginalisation or disregard of tribes has reinforced co-optation of some tribes but continued to threaten the exclusion of others. This continues to be a double-edged sword whereby tribes need to balance the equation between regime and constituent. In today’s Libya, tribalism is still relevant as tribes provide order and protection in a chaotic and hostile environment. Unsurprisingly, therefore, tribes are often seen as one of the few institutions that can survive present-day conflict, and even as a stabilising factor.

 

 

 

 

Recommendations

For best use of strategic management tools and to have clear future plan for smashed country like Libya nowadays with presence of two government one in the eastern part of the country and one in the western part, many strategic decision could be considered as safe future investment plan, safing the local workers and ensure their job continuity during the crisis is a helpful idea as they will be more loyal to the company and to company assests.

One more strategic decision could be valid is to transfer the company head quarter to neboughr country which is stable at the moment and it provides the security of the employess who can work remotely.

Increase the investment and oil and gas exploration in offshore where there is no empact of unstability of the country as these fields as far from onshore and there is possibility to be operated from nebourcontry from logistic point of view.

In the short term, any Libyan government should make use of the tribal system for conflict resolution. As long as there is no formal judicial system that can do so, and as long as judgments cannot be enforced. In the longer term, a unified Libyan government should work towards the integration of traditional and formal justice systems, as has been done in Somaliland.

Ensure that your entire organization has adopted a goal-setting methodology. The objectives and key results (aka “OKRs”) method is emerging as the new standard, but using SMART (goals— specific, measurable, attainable, relevant and timely) is better than nothing. Ensure that there are established best practices for writing goals. Each manager should be responsible for his or her team’s goals. If no best practices are being followed, use OKRs.

Attempts to include tribes in the statebuilding process should be based on inclusive representation of all tribes and communities. The current division between tribes who fought alongside the rebels and those who remained loyal to Gaddafi is highly problematic and unsustainable. There is a need to reconcile the two communities and ensure their equal participation and representation, as this will contribute to promoting long-term stability and will reduce the possibility of future conflicts.

 

Petroleum companies must increase the concern about decreasing the cost, and give more attention to the process of measuring the expenses.

 

It is necessary to evaluate the employees and use the evaluation analytics as a feedback in the improvementprocess including the motivation and incentives to decrease the employee turnover.

 

Top management should start with only the most critical strategic goals, as this will reinforce the notion that strategy execution is the most critical focus Adopt technology that can provide predictive analytics on goal attainment. Predictive analytics is not an exact science; however it provides a reflection point on how a goal is tracking. The more a goal has visibility the more a goal will be managed.

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