Effective business strategies for energy service companies in the East Asian business environment.

Yi, Tan

Abstract

This study investigates effective business strategies for energy service companies in the East Asian business environment. The research purpose has three foci. First, it seeks to examine the dominant business environment conditions that impact upon the oil and gas service sector in China, and to a lesser extent, Singapore and Malaysia. Second, the study investigates business strategies adopted by oil and gas service companies in response to the business environment in which they operate. Third, the study seeks to evaluate the reliability of strategic theoretical frameworks based on Western business practice but applied in a non-Western business environment like East Asia. Ten main propositions were formulated for empirical research. They are all related to the research objectives. Pilot fieldwork had been carried out between December 2000 and February 2001 in China. Data were collected through a questionnaire survey addressed to senior executives of oil and gas service organisations in the above three countries, and 98 organisations participated in the survey. A number of statistical procedures like descriptive statistics, univariate statistics and bivariate analysis were applied. Various nonparametric techniques such as Spearman correlations, the chi-square test, the Kruskal-Wallis test and the Mann-Whitney test were utilised for data analysis. In addition, analysis of variance (ANOVA) was used to compare the differences or similarities in the three countries. In the light of empirical evidence, some propositions were shown to be well grounded whereas the others were not. The business environment for the service sector in East Asia is found to be slightly uncertain, with the lowest level in China and the highest level in Singapore. Although the business environment is complex and dynamic in each country, the environmental conditions are predictable and attractive to oil and gas service companies. It is found that, in each of the selected countries, organisations can be classified into five strategic orientations, namely: Balancer, Analyser, Defender, Prospector and Reactor. In general, competitive strategies pursued by the service organisations comprise four categories, with Differentiation and Hybrid as the majority, Low-Cost as the minority and with quite a few falling into a Non-Purpose group. Five strategically competitive positions can also be classified for the participating organisations. Notably, in each country, the majority of the participating organisations had improved their strategic performance over the five-year period examined. Regardless of the types of strategies, a higher strategic performance is associated with a lower level of perceived environmental uncertainty. Different categories of strategic options do not show differences in the levels of perceived environmental uncertainty, but do show differences in relation to strategic performance. Analysers or Balancers yield a better strategic performance than Reactors; Differentiation or Hybrid organisations outperform Low-Cost organisations; and a strategic position of low customer added value with a high price level is doomed to have a poor strategic performance. The significance of the research findings is important for any senior executives in both Western and Eastern organisations who wish to enhance the strategic competency of their businesses, so that they may survive long-term in East Asia.

Citation

YI, T. 2004. Effective business strategies for energy service companies in the East Asian business environment. Robert Gordon University, PhD thesis. Hosted on OpenAIR [online]. Available from: https://doi.org/10.48526/rgu-wt-1706205

• Thesis Type: Thesis
• Deposit Date: Jul 6, 2022
• Publicly Available Date: Jul 6, 2022
• DOI: https://doi.org/10.48526/rgu-wt-1706205
• Keywords: Business strategy; Business management; Oil and gas industry; East Asia
• Public URL: https://rgu-repository.worktribe.com/output/1706205
• Award Date: Apr 30, 2004