The Impact of Digital Transformation and Corporate Governance in the Relationship of Strategic Management Practices and the Firm’s Performance: The Case of the Egyptian Petroleum Sector

Zayed Elsayed Mohamed^1, and Mohamed Saad²

¹Arab Academy for Science, Technology and Maritime Transport, Graduate School of Business (AASTMT)

²The British University in Egypt, (BUE)

Cite this paper:
Zayed Elsayed Mohamed and Mohamed Saad. The Impact of Digital Transformation and Corporate Governance in the Relationship of Strategic Management Practices and the Firm’s Performance: The Case of the Egyptian Petroleum Sector. Journal of Business and Management Sciences. 2022; 10(4):192-209. doi: 10.12691/jbms-10-4-3

Abstract

Purpose: Egypt set out ambitious strategic plans a few years ago to cope with the emerging global development and innovation. Therefore, nowadays the importance of strategic management science and art is the main topic of attention. As the petroleum sector is one of the most important sectors affecting the economy of Egypt. Therefore, the main objective of this study is to examine the importance of strategic management practices and their impact on company performance, while testing the impact of applying digital transformation and corporate governance principle as a mediator in the Egyptian petroleum sector. The results show that the independent predictor variable was found to significantly affect all variables, both mediators and dependent variables. Aim and objectives: The aim of the study is to find out the impact and the relationships between strategic management (SM) and business performance (FP) in the Egyptian petroleum sector, while testing the impact of using digital transformation and corporate governance principle as a mediator. The study managed to examine whether the Egyptian petroleum sector is ready to implement the strategic management practices applying the principles of Digital Transformation (DT) and Corporate Governance (CG). More attention will be given to companies that have applied the SM theories and their interest in the application of DT and CG in the Egyptian petroleum sector. Hypotheses: Based on empirical literature, the model expressed the relationship of strategic management practices consisting of four basic phases that include (environmental scanning, strategy formulation, strategy implementation, and evaluation and control) and related to company performance, four perspectives that measure the organization and the business unit or departmental success after finance; Customer; internal operations; Human Resource Systems & Development (learning and growth) and for the financial indicator, the study focused on only two dimensions (profitability metrics, revenue growth) and the customer indicator, the study focused on customer satisfaction and the internal process that the study selected to improve Internal Process Indicator . In terms of context, the main concept of the model is to examine the role of both digital technological tools, which include three main dimensions (the individual level, the organizational level, the digital technological tools), and finally the corporate governance principles (more independent Board, Audit Committee & Disclosure and Transparency). Design/methodology/approach: The study proposes a research model built on the basis of extensive research and a fully constructive literature review that simulates the variables and the relationships between all these variables. Based on this model, a research hypothesis is established, which is further explored through a survey considering primary data and analysis. The target audience is mainly the whole Egyptian oil companies including the public, JV and the investment companies. Middle and upper management are the main target group of this study as they are very familiar and have solid experience in studying the subject. The sample size was carefully calculated to represent the population of more than 95,000. Therefore, we selected a sample of approximately 383 participants from fourteen large companies with a confidence level (95%) and an error rate (5%).

Keywords:
strategic management firm’s performance digital transformation corporate governance egyptian petroleum sector

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