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A Dissertation Proposal Submitted to The Arab Academy of Science & Technology
& Maritime Transportation
A Dissertation Submitted in partial fulfillment of the requirements of
The Doctorate Degree in Business Administration (DBA)
"The Role of Corporate Performance Management (CPM)
In Sustaining Competitive Advantage:
A Case Study in the Petrochemicals Industry in Egypt"
Supervised By:
Prof. Dr. Fareed EL Naggar
By:
Khaled Ahmed AKL
January 2014
ACKNOWLEDGEMENT
I would like to thank my supervisor, Professor Dr. Fareed EI Naggar, who has guided
me throughout my dissertation with his patience and knowledge. He was always willing
to help, Thank you for all the time and support that you have provided.
I thank all my professors and colleagues at the Arab Academy for Science and
Technology; it has been really a learning experience.
Thanks to my family, who has provided a lot of time and effort during the time of this
research and who actually sacrificed a lot for the completion of this work.
Finally, I thank all my friends, colleagues, and everyone who really wished for this
research to be completed.
ABSTRACT
Petrochemicals products are driven from the natural resources (oil crude and natural
gas). The processing of the oil crude and natural gas indicates a high return and
value added that could reach 15 to 30 times for the intermediate and final products
consecutively compared to the raw natural resources value. In the present era of
emerging intense global competition, corporate are facing increasingly
knowledgeable and demanding customers and activist shareholders which have
changed the competitive environment from competition based on ability to invest in
and manage physical assets to competition based on knowledge and the ability to
develop and make use of intangible and soft assets.
The objective of this research is to study the role of the corporate performance
management to sustain the competitive advantage in the petroleum sector, especially
in the petrochemicals industry in Egypt as one of the newly established businesses
that has a high value added and faces a severe competition, to sustain its competitive
advantage that will be through a case study.
Based on the literature review, five hypotheses were developed and a research
framework was proposed. It consists of six constructs; the sustainable competitive
advantage, the corporate performance management, the customer value, the market
orientation, the service quality and the innovation in technology.
ii
A questionnaire was prepared and tested, then, a survey was conducted to collect
data, from corporate managers, working in the field of the petrochemicals, 250
employees within five companies were contacted, either by email or during the
companies' visits, 162 valid responses were received, that represents a response
rate of 64.8%.
Reliability tests, factor analysis and correlation analysis were conducted on the data
collected to test reliability, validity, and to test the research hypotheses. The results
suggested that; there is a significant path from service quality, market orientation, and
innovation in technology and customer value to corporate performance management.
There is strongly support among all constructs on sustaining competitive advantage.
Moreover, this research aims at developing a set of recommendations for the
decision makers and the various stakeholders. Recommendations are directed
towards increasing the awareness about market orientation, innovation in technology,
customer value, and service quality to increase the overall corporate performance
and competitiveness of organizations.
Keywords: Corporate Performance Management (CPM), Sustaining Competitive
Advantage (CSA) , Customer Value, Market Orientation, Innovation in Technology,
Service Quality, Petrochemical Industries.
III
ACKNOWLEDGEMENT
ABSTRACT
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
LIST OF ABBREVIATIONS
CHAPTER ONE
1- Research Background
1-1 Introduction
TABLE OF CONTENTS
1-2 Research Problem
1-3 Research Objectives
1-4 The Proposed Research Variables
1-5 Research Hypotheses
1-6 Research Methodology
1-7 Research Limitations
1-8 Research Plan
CHAPTER TWO
2- The Petrochemicals Industry in Egypt and Its Competitive Edge
ii
iv
viii
x
xii
1
4
6
6
8
8
10
10
2.1 Introduction 11
2.2 Petrochemical Products in Egypt and Local I Global Demand 11
2.3 Egyptian Petrochemicals Industry Competitive Edge 15
2.4 Regional and Global Petrochemicals Industry Competition 18
2.5 Key Performance Indicators for Petrochemicals Industry Sttccess 21
iv
2.6 The Need for Corporate Performance Management Framework 22
CHAPTER THREE
3- Literature Review: Performance Management and Sustainable
Competitive Advantage
3.1 Introduction
3.2 Definitions of Corporate Performance Management
3.3 Importance of Corporate Performance Management
3.4Performance Measurement Systems
3.5 Evolution of the Corporate Performance Management
Frameworks
3.6 The Strengths and Weaknesses of the Performance
Management Frameworks
3.7 The Common Characteristics of Performance Management
Frameworks
3.8 Possible Pitfalls Existing in Performance Measurement
3.9 Constructing the Actual Measures within a Performance
Management Framework
3.10 The Best Performance Management Practice
3.11 Making it Work: Overcoming the Barriers to Performance
Management
3.12 Introduction about the Sustainable Competitive
Advantage (SCA)
3.13 Sustainable Competitive Advantages (SCA)
3.14 Sources of Sustainable Competitive Advantages (SCA)
v
23
25
29
31
37
48
51
54
58
59
63
67
69
70
3.15 The Relationship of SCA to Other Strategy Concepts
CHAPTER FOUR
4- Research Methodology and Design
4. 1 Introduction
4.2 Research Problem
4.3 Research Objective
4.4 The Research Variables
4.5 The Proposed Research Conceptual Framework
4.6 Research Hypotheses
4.7 Measuring Instruments
4.8 Pilot Study
4.9 Population and Sampling
4.10 Target Number of Responses
4.11 Survey Method
4.12 Summary
CHAPTER FIVE
5- Data Analysis, Discussion and Findings
5.1 Introduction
5.2 Respondent Characteristics
5.3 Assessment of Measurement Models
5.4 Assessment of Structural Research Framework
5.5 Testing Hypothesis
5.6 Discussion and Findings
vi
74
79
79
80
81
87
89
91
100
102
103
105
105
107
107
108
116
120
122
CHAPTER SIX
6- Conclusion, Recommendations and Future Research
6.1 Introduction
6.2 Conclusion
6.3 Recommendations
6.4 Directions for Future Research
REFERENCES
APPENDIX A - Survey Questionnaire
vii
124
124
126
126
128
136
LIST OF TABLES
Table 2-1 Egyptian Petrochemical Companies Data as of year 2013 14
Table 3-1 Results and Determinants Model 39
Table 3-2 The aspects of the perspective dimension 43
Table 3-3 The aspects of the focus dimension 43
Table 3-4 The Aspects of the Purpose Dimension 44
Table 3-5 Common Characteristics of Performance Management 51
Frameworks
Table 3-6 Common Characteristics (Hone) 52
Table 3-7 Specification of Characteristics develop a dynamic performance 53
measurement system
Table 3-8 Themes of Good Performance Measures 58
Table 3-9 Relevant Concepts and Definition of Sustainable 68
Competitive Advantage
Table 4-1 Survey Item: Sustainable Competitive Advantage 94
Table 4-2 Survey Item: Corporate Performance Management 95
Table 4-3 Survey Item: Innovation in Technology 96
Table 4-4 Survey Item: Service Quality 97
Table 4-5 Survey Item: Customer Value 98
Vlll
Table 4-6 Survey Item: Market Orientation 99
Table 4.7 Cronbach's Alpha Scores for Survey Instrument Subscales 102
Table 4-8 Minimum Sample Size 104
Table 5-1 Respondents Characteristics 107
Table 5-2 Factors Loading 115
Table 5-3 Constructs' Correlations 116
Table 5-4 Fit Indices of Structural Research Models 117
Table 5-5 Parameter Estimates of Structural Research Models 119
Table 5-6 Hypotheses Testing 121
ix
LIST OF FIGURES
Figure 1-1 Petrochemicals Industry Value Added 1
Figure 2-1 Development in the Egyptian Petrochemicals Industry (2002-2015) 13
Figure 2-2 Egypt's Petrochemicals Trade Balance (2010-2011) 13
Figure 2.3 Egyptian Geographic Location as Competitive Edge 17
Figure 2.4 Egyptian Energy Cost as Competitive Edge 17
Figure 2.5 Egyptian Relative Economical & Political Risk Rating 18
Figure 2.6 Global Petrochemicals Polyolefin's Player 18
Figure 3-1 The SMART Pyramid 38
Figure 3-2 The Balanced Scorecard Frame work 40
Figure 3-3 Value for Money I Business Process Model 45
Figure 3-4 The EFQM Business Excellence Model 46
Figure 3-5 The Performance Prism 47
Figure 4-1 The Proposed Research Conceptual Framework 88
Figure 5-1 Measurement Model of Service Quality 109
Figure 5-2 Measurement Model of Innovation in Technology 110
Figure 5-3 Measurement Model of Customer Value 111
Figure 5-4 Measurement Model of Market Orientation 112
Figure 5.5 Measurement Model of Corporate Performance Management 113
x
Figure 5.6 Measurement Model of Sustainable Competitive Advantage
Figure 5.7 Hypothesized Structural Research Model
Figure 5.8 Alternative Structural Research Model
xi
114
118
120
API
BI
Bse CPM
EFQM
GPPS
HIPS
KPls
LOPE
LPG
MENA
PE
PET
PP
PS
PVC
SCA
Sidpec
LIST OF ABBREVIATIONS
Advanced Performance Institute
Business Intelligence
Balanced scorecard
Corporate Performance Management
European Foundation Quality Management Excellence Model
General Purpose Polystyrene
High Impact Polystyrene
Key Performance Indicators
Low-Density Polyethylene
liquefied petroleum gas
Middle East and North Africa
Polyethylene
Polyester
Polypropylene
Polystyrene
Poly vinyl chloride
Sustainable Competitive Advantage
Sidi Kerir Petrochemicals
xii
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