The Impact of E-Business on Oil Industry - Kuwait Petroleum Corporation - Research Proposal Example

Running Head: A Research Proposal in Strategic Management Planning Paper The Impact of e-business on oil industry a case study Kuwait Petroleum Corporation (KPC) Table of Contents Content Page Chapter-1Introduction 3 Statement of Purpose 3 Background and Context of Study 4 Significance of Study 4-5 Chapter 2-Literarture Review IT Strategy and Transformational Business Leadership 5-8 Chapter 3-Research Methodology Qualitative Analysis 9-10 Data Collection 10 Interviews 10-11 Ethical Considerations 11-12 Problems/Limitations of Study 12 References 13-15 Chapter 1 Introduction Contemporary business landscapes face the challenge of keeping pace with rapid technological developments. The advancement also presents formidable opportunities for business that they can tap to enhance their effectiveness, efficiency and competency. Various businesses and state organisations are moving swift to utilise modern technology to transform the way they do business shifting focus much more from operations and productions orientations to more customer inclined business concepts. This has been one of the dimensions brought about in the surge of cutting edge technology. Kuwait is one of the High Tech literate countries currently undergoing various transformations in tandem with the pace of technological development. The developments have critical implications for business entities and any organisation striving for competitiveness, efficiency and sustainability. The import of this research proposed is to explore the dynamics that characterise the implications for e-business organisations in Kuwait’s oil industry business fronts. Statement of Purpose The purpose of the study is to explore the impact of e-business on the oil industry in Kuwait . This will be complimented with a probe into adjustments that the organisations have to make in the dimension of Strategic Management Planning for E-Business Information Systems. The study will also zero in on the specifics that charcterise challenges faced by oil companies in Kuwait in face of rapid technological advancements. Background and Context of Study Oil was discovered in Kuwait in 1938 by the Kuwait Oil Company (KOC) which is a London established joint venture of the Anglo-Persian Oil Company (now BP) and Gulf Oil (now Chevron Corporation. The oil industry in Kuwait has experienced tremendous developments both in upstream as well as in down-stream fronts of the industry. The growth and development thrust of KOC has entailed the running of refining operations with the Mina AL-Ahmadi Refinery since 1949. Kuwait National Petroleum Company (KNPC) was established in 1960 as a joint venture between the state and private sector and started operations at the Shuaiba Refinery in 1968. The Petrochemicals Industries Company (PIC) was founded in 1963. The company was also founded as a government-private entity and began operations in 1964 in fertilizer manufacturing. Kuwait has been rated as the third biggest computer market in the vibrant Gulf region. The entirety of the size of its local IT expenditure is poised to rise from US$539 million in 2008 to over US$830 million in 2012. The figures presented in the foregoing imply that Kuwait is one of the fast-growing IT markets in the Gulf zone. This has been largely attributable to the relatively small but high tech literate and affluent populace. The country is tapping the of the record oil prices windfall and has moved ahead to initiate the modernisation for the oil sectors among various other sectors in focus of the programme. The county’s telecommunications sectors are blooming in tally with other key sectors such as property. The flourishing sectors are presenting lucrative opportunities of various IT vendors offering IT services as well as products in Kuwait. The country’s IT sector looks poised for further growth given the heightened consumer spending leveraged on the government expansionary budget since 2006 to date. The Oil and gas production sectors are looking to revolutionise cost structures while similar developments are obtaining in financial sectors and other related industries. Sectors across the entire economy spectrum are implementing IT solutions tailored for business flexibility, efficiency and competitiveness. The Kuwait government is also tapping the merits new IT inventions running and implementing various e-government initiatives paralleled with a surge of government institutions offering various online services. The described milieu has pervading implications of the strategic management and planning for e-Business information system in Kuwait business environments. Businesses have to on up to the opportunities presented by the evolving IT landscape in order to deliver on the goals of efficiency, effectiveness and sustainability. The technological thrust will also empower business organisations to focus on customer needs and thus improve service and enhance customer satisfaction. Significance of Study Business organisations do not exist in a vacuum. The nature and stature of the organisations is shaped largely by internal factors as well external factors. Internal factors entail organisational management strategy, organisational culture and ideology among a host of elements that constitute the organisation. External factors include the concrete and abstract environments in factors technological, social, political, geographic, demographic and economic among many others. The study purports to provide insights that will fill knowledge gaps on the aspects of the Impact of e-business on oil industry at operational and strategic levels in Kuwait. Nonetheless the significance of the study goes beyond the boundaries of Kuwait as the study will capture valuable nuances and insights on the subject of strategic management planning for E-Business information’s systems that can be used across the entire spectrum of related business management and IT disciplines. By extension the study will serve as an expansion of the knowledge contributions made on the related a subjects of e-commerce and E-business for tie oil industry and beyond. Chapter 2 Literature Review IT and Change in Organisations (Business Strategy) Business enterprises, regardless of their size and operational capacities; must align themselves for the enhancement of their efficiencies, growth and sustainability among other micro and macro organisational goals. Various contributions have been made by various professional, researchers and scholars attempting to unravel the concept of change. Perhaps one of the lucid outlines of the concepts is that presented by (Schalk et al; 1998). The scholar posits that Organisational Change can be defined as empirical process that entails an organisations multi-dimensional transformation in the dimensions including organisations shape, size and state over time. The scholar underscore that this process actualises after the implementation of new ways of "Thinking, functioning and operating” (Van de Ven and Poole 1995). The rapid developments in the Information Technology (IT) domains which have been fueled by the emerging needs in the ever evolving IT world have led programmers and system developers to create better models of surmounting challenges of the contemporary world. The development of computer phenomenon has been experiencing tremendous changes in its multi-dimensional composition. The developments have also rippled over into key domains like database technological design. New needs and challenge emerge on the aspect of data warehousing, data security, network, optimisation of data system functionalities and performances; this led to the revolutionarisation of the IT domain with notable strides thrust in the database technology realms. IT Strategy and Transformational Business Leadership There are a number of social and economic forces driving changes in leadership. Alchian (2007) states "That much sought after, much maligned social entity, and a job is vanishing like a species that has outlived its evolutionary time" Secondly; demographic changes have created a more diverse society. M. Jensen and W.H. Meckling (1992) state, Workers in an environment receptive to diversity are empowered to use their full capacity. As a result, they, their work, and the organization as a whole benefit from this." The third significant change is a shift from what was referred to as the baby-boomer generation to the gold collar worker. When demand for talent so outstrips supply, startling salaries, bonuses, and mimosas are just the beginning. - Work is not about paying the rent; its about self-fulfillment. J B Barney (2002) states, “…the need to cultivate and aggressively use those brains is evolving into a business religion." This will become increasingly difficult as there is a growing shortage of skilled labour and it will require strong leadership skills to attract the best individuals to organizations. Once attracted to an organization it will also mean creating a culture where creativity, cooperation and resiliency are the operative words. In summation, the forces driving change in leadership: job changes, diversity issues, increased demand for skilled labour, demographic changes and lack of strong leadership skills are significant and need to be addressed. It is no wonder it is difficult to define what is meant by leadership because the context is constantly changing and demanding new ways. An effective performance management system recognizes these changes and provides a framework for meeting the leadership challenges of a changing workforce and customer needs. IT Transformational change within organisations requires an elementary reorientation in attitudes, values beliefs. (J. Hausler 20) B.J. Loasby (1997), "Redefining of the essential psychological space. He outlines that variables such as time and resources as well as effort invested on an intervention must to be expanse enough to include such change elements as outlined above. Change processes are implemented to enhance business operational and functionalities efficiencies as well as provide and adaptations to the external environment or address the quality of life aspects. T.W. Malone and R.J. Laubacher (1998) present an ‘ecological’ perspective on transformational change. The scholars underscore the essence of aspects such as interconnectedness and coalitions with business partners and players for capacity and sustainability goals. For E-Businesses this has been applicable to its customer and business dependence relationships serving to consolidate its market shares in its native and foreign business landscapes. The E-Business have to run an IT strategy transformation and overhauling order to accomplish set goals on the dimensions of competitiveness, growth and long term sustainability. A crucial dimension on the expansive framework as outlined by Fuller and Unwin (2003) entails the participation dimension which brings an unpacking of the expansive and restrictive approaches to workforce development in relation to the ways in which personnel acquire expertise. The scholars posit that, "An expansive view of expertise entails the creation of environments which allow for substantial horizon, cross boundary activity, dialogue and problem solving. This aptly applies to the change and sustainability strategy of E-Businesses which have expanded workplace learning opportunities for their personnel in particularly technology and customer-satisfaction related problem solving domains. Fuller and Unwin contributions on the dynamics and theoretical tenets of core work place learning models provide invaluable insights that can be applied to better under how workplace learning can be perceived to be essential in complementing education as well as exploring ranging dynamics around the necessity, the efficiency and of course the limitations of the workplace learning thrust. Transformational leadership has a powerful influence on job satisfaction both directly and indirectly through its influence on a persons intrinsic task motivation (empowerment). Transformational leadership tenets that emphasise the essence of flexibility are deemed feasible for the prospects of adopting and implementing customer oriented organisational culture as well as masterminding complimentary staff development programmes. This has been the thrust of E-Business after adopting market-driven business operational and practice thrusts entailed in IT stratagem. Unlike transactional leadership, which has no effect on empowerment; transformational leadership model is likely to have been adopted by businesses for the implementation of a paradigmatic shift process that enable the company to reorient its thrust towards customer satisfactions above operation. The shift should enable personnel to move off traditional and typically product-pushing approaches to customer satisfaction inclined approaches. Strategic Planning for Information Systems In today’s business the planning and management are playing an important role. The strategic management is the science and art of formulating, implementing and valuating practical decision that will enable any organization to achieve its goal (Robert, etal; 2003). Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment (MA Hitt, etal; 2001). It is the process of specifying the organizations objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organizations objectives. Strategic management, therefore, combines the activities of the various functional areas of a business to achieve organizational objectives (E Turban, etal; 1998). It is the highest level of managerial activity, usually formulated by the Board of directors and performed by the organizations Chief Executive Officer and executive team. Strategic management provides overall direction to the enterprise and is closely related to the field of organization Studies. In the field of business administration it is possible mention to the strategic consistency. According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Organisations typically develop rolling business plans, they are constructed by taking into account the current business, the external influences on the business (e.g. the economy, government policy and technological advances), and the aims and objectives of the most senior levels of management. The strategic business planning describes how the organisation will strive to move from the current business to the target business. Planning for information systems, as for any other system, begins with the identification of needs. In order to be effective, development of any type of computer-based or information system should be a response to need whether at the transaction processing level or at the more complex information and support systems levels. Such planning for information systems is much like strategic planning in management. Objectives, priorities, and authorization for information systems projects need to be formalized (Robert, etal; 2003). The systems development plan should identify specific projects slated for the future, priorities for each project and for resources, general procedures, and constraints for each application area. The plan must be specific enough to enable understanding of each application and to know where it stands in the order of development. Also the plan should be flexible so that priorities can be adjusted if necessary. The task of strategic information systems planning is difficult and often time organizations do not know how to do it? Strategic information systems planning is a major change for organizations, from planning for information systems based on users’ demands that based on business policy. Also; strategic information systems planning changes the planning characteristics in major ways. For example, the time horizon for planning changes from 1 year to 3 years or more and development plans are driven by current and future business needs rather than incremental user needs. Increase in the time horizon is a factor which results in poor response from the top management to the strategic information systems planning process as it is difficult to hold their attention for such a long period. Chapter 3 Research Methodology Case study A phenomenological case study is naturally a qualitative study. A phenomenological study is “the type of research that examines the human experience (McDonald, John, 2005). The emphasis is on “experience and interpretation” (Merriam, 1998). Merriam (1998) continues “In the conduct of a phenomenological study, the focus would be on the essence or structure of an experience (phenomenon)”. Fraenkel and Wallen (1990) lists six steps one must use in a phenomenological study. These steps are in no particular order, but according to Fraenkel and Wallen, they must be included (pg. 443-445): 1. Identification of the phenomenon to be studied. 2. Identification of the participants in the study. 3. Generation of hypotheses. 4. Data collection. 5. Data analysis. 6. Drawing conclusions. This study will involve a collection of data from 10 oil companies in Kuwait and 20 private companies that are related to the oil industry. In analyzing qualitative data close attention must be paid in the interpretation of the collected data in order to try and find points of bias (Merriam, 1998). To zero in on the exploration of the impact of e-business on the oil industry in Kuwait, the study will feature a case study detailing one of the world’s top oil companies in Kuwait. The study will make use of the Kuwait Petroleum Corporation (KPC). KPC is one of the top ten Oil energy conglomerates in the world. KPC was founded in 1980 as a way of bringing all state-owned entities of the country’s oil industry under one corporate ensemble. The Corporations has an expanse business network that spans all the world’s continents. The company delivers hydrocarbon energy from its local reservoirs as well as upstream interests abroad directly to target consumer bases through a systematic series of specialized subsidiary operational entities. The size and dynamism of the KPC make the case ideal for a meaningful exploration of the impact of e-business on oil Industry for the accomplishment of the goals and objectives of the scope of this study. Qualitative Analysis The research exercise will take the shape of a qualitative approach to the meeting of set objectives and scope of the research exercise. James Neil outlines, “Qualitative research entails the analysis of data such words, pictures or objects gathered in the research drive. The gathered elements are evaluated in subjective and relative manner toward the making of conclusions and recommendations in tandem with research scope and objectives. On the other end quantitative research involves a scientific evaluation of numerical data.” Qualitative research This research project will be conducted mainly by qualitative research methods and accompany by analyzing the companies data, like companies’ annual reports, press release, their official website…etc. The reasons for choosing qualitative research method instead of quantitative research method are due to four perspectives: 1) the nature of the research project; 2) the scale of the project; 3) the cost of carrying out the project and 4) time limitation. Rubin and Babbie (2001) have emphasized the totally different nature of qualitative and quantitative research method. “Quantitative methods emphasize the production of precise and generalisable statistical findings and are generally more appropriate to nomothetic aims. When we want to verify whether a cause produces an effect in general, we are likely to use quantitative methods…… Qualitative research methods emphasize the depth of understanding associated with idiographic concerns. They attempt to tap the deeper meanings of particular human experiences and are intended to generate theoretically richer observations that are not easily reduced to numbers.” As a direct result of the objective of this research project, the researcher intends to have a deeper understanding of what specific factors will affect companies’ management strategic planning decision versus the technology advancements which direct impact on business By adapting the e-business systems. The research has also anticipated financial resources constraints that have inhibited the adoption of more capital intensive quantitative research thrust. On another end it is considerably too time-consuming to collect enough amounts of qualified questionnaires as well as to analyse large amounts of data drawn from received questionnaires. Data collection Among different qualitative research methods, this research intends to conduct 30 semi-structured interviews with 10 public oil companies and 20 private companies’ IT managers. The duration of each interview will be around 30-40 minutes. Besides, this research will also support by analyzing KPC data, like IT Strategy, official websites and press release…etc,. Finally, literature and journals review will be used to collect data for the study as well. Interviews Scholars and researchers Rubin et al (2001) have underscored the significance of qualitative interviewing in research exercises of this nature. The scholars have reinforced that qualitative interviewing is flexible and incessant rather than prepared beforehand and sheltered. J. Kargar and J.A. Parnell (1996) also state, “The Interviewer wanders through the landscape and enters into conversations with people encountered. The traveler explores the many domains of the country, as unknown territory or with maps, roaming freely around the territory….The interviewer wanders along with the local inhabitants, asks questions that lead the subjects to tell their own stories of their lived world...” The researcher will therefore set a range of questions to keep the interviews focused on the core research themes and topic. Finally, the researcher is cognisant of certain variables that exist as way of limitations to the study in the use of interviews. As R. Mark (2000) enquires, ‘if another person was to conduct the same study would their observations find the same results?’ In response to this question, researcher would like to reiterate that the study is a typically small scale exercise whose results must not be generalized and applied to all companies and all managers’ beliefs. Moreover, throughout all the four interviews, researcher will use the same set of questions’ guidelines. In doing so, the variation in conducting interviews should be minimized. Ethical Considerations Data gathered in this research thrusts of this study will be used exclusively used explore the dynamics companies’ strategic decision making. The research exercise is being carried out within the precincts and confines of regulations of the governing institutions as well as scholastic and professionalism values. As such the research drive is being conducted according to the guidelines and rules and regulations of the governing academic and research institution. Details and information solicited from targeted and contacted research respondents will be used in the strictest of confidence and will not be availed to any other endeavors unless where all requite arrangements have been made and fulfilled in the interest of the research respondents and all other parties concerned. The researcher also hereby declares categorically the factor of absolute independence from organisations of or bodies of knowledge or interest that may be perceived to be of some association with the carrying of this study. The four stages of ethics in doing research are followed by the way of a good design, modes of data collection, analysis of data and for proper dissemination Problems/Limitations of Study The research exercise will endeavored to solicit as much detail as possible under the scope and objectives defined and implied in the thesis statement. Nonetheless the research exercise has not been in any way exhaustive and the researcher herein acknowledges the limitations of the research exercise owing to it’s encompass and goals among a host of other factors. The focus of the research, and as such the literature review, is thus limited to the time-frame, conceptual scope and objectives defined and implied in the thesis statement. The study is also likely to suffer logic lapses attributable to delimitational perceptions on the scope of the study. The study is based on sweeping and tacit assumption that technology enhances business performance. This may not be entirely provable. References A. Alchian and H. Demsetz, Production, information costs and economic organizations, Kuwait Economic Review,2007, pp 26 J. Barney, Firm resources and sustained competitive advantage, Journal of Management 17, 2001, pp 99-120 J. Barney, Is the resource based "View" a useful perspective for strategic management research?, Academy of Management Review , 2001, pp 45 J B Barney, Strategic factor markets: expectations, luck, and business strategy, Management Science, 2006, pp 73 J. Hausler, Planning: A way of shaping the future, Management International Review 2, 2007, pp, 21-27 M. Jensen and W.H. Meckling, Specific and general knowledge, and organizational structure, in: L. Werner and H. 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