GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
A Systemic Approach to Create a State-Owned Enterprise as an Engine for a Diverse Economy.
Paper Proposal Text :
The Gulf Cooperation Council (GCC) countries are attempting to build a diversified economic system as
a means to create independence from the performance in the hydrocarbon sector. One of their efforts
is investing in the private sector to make it more competent in creating jobs, building national
capacity, generating knowledge, and ensuring positive impact on the overall performance of the
country. Unfortunately, the current private sector is still playing a minor role in the GCC economies,
and mainly continuing to be reliant on the performance of the oil and gas sector. Therefore, its
investments in other industries are still struggling due to the high risks associated with these
investments, lack of experience and vague financial viability.
This paper aims to propose a systemic approach to guide and enhance the capacity of private sector
organisations to play a greater role in the development processes of strategic projects in the GCC
countries. The research mainly focuses on the design of State-Owned Enterprises (SOE) in terms of
strategy, operating models, organisational structures, and performance measures. It investigates the
creation of SOE in a multi-stakeholders environment, exploring the potential of different forms of
collaboration among its partners, particularly the private companies, SMEs and entrepreneurs. Such
collaborations and alliances will form a network of organisations transforming the market, through
which businesses and government organisations interact with their complex operating environments,
co-creating value, assuming risks and challenges, attracting new opportunities through innovation,
and safeguarding long-term viability. The recognition and consideration of such co-evolving complex
network, and its power and implications, will influence the design of SOE and their business models.
Accordingly, this action research introduces a systemic model of designing a SOE in one of the GCC
countries as a nodal organisation working as a context leader, and connecting a number of public and
private organisations. The SOE could play a significant role in orchestrating the business ecosystem by
providing intellectual influence, shaping the network structure and its infrastructure, setting ethos and
standards, and managing customer interfaces. By doing so, there will be a co-creation of values
resulting from the participatory process and interactions across the whole network including the SOE
and other key players in addition to customers of their services and products. The SOE becomes the
centre of a web of prequalified agencies ready and able to respond to environmental changes among
its partners of private and public organisations. Consequently, such operating environment could
create a platform that encourages understanding and resolves many issues facing the private sector in
its role towards a diverse economy. These issues are characterized today by small degree of
interaction, lack of communication channels with public organisations, inefficient allocation of
resources, inefficient national labour force programmes, and low productivity.
For its practical evidence, this paper undertakes a case study from Oman of the telecommunication
and broadband industry. A number of workshops and interviews have been conducted to investigate a
governmental initiative that entails collaboration with different stakeholders, including operators,
regulators, customers, utility providers, and SMEs. The initiative aims to set up a new SOE responsible
for operating and managing broadband infrastructure across the country.