Evaluating the Role of Joint Venture for Technology Transfer in Petrochemicals Industry at Jubail, KSA

Year 2013, Volume: 3 Issue: 3, 97 - 110, 23.07.2016

Noor Iskanadarani Mansour E. Abou Gamila Ali Shash

Abstract

In the petrochemical's sector, where the market evolves incessantly around new processes and functions, companies are forced to be continuously innovative by acquiring or developing technologies. This is a crucial element in the competitive strategy of any enterprise. The ongoing integration between the Saudi market and the international market liberalizes and enhances the competitive pressure within companies, in particular joint ventures and alliances. As well as, it increases technological development needs. This study was conducted to evaluate the role of Joint Venture for technology transfer in petrochemicals at Jubail Industrial City, Saudi Arabia. A questionnaire was developed to collect the necessary data from joint-ventures companies. Seventeenth companies completed and returned the questionnaire. The obtained data were analyzed using SPSS package. The results indicate that several Technologies including product, process, marketing, organizational, strategic, and systematic have been successfully transferred to the Petrochemical industry in Saudi Arabia. The majority of these technologies have been transferred mainly through joint venture companies. Joint venture companies consider and control many internal and external aspects to assure a successful technology transfer. Association with suitable partner, commitment of the top management, education and training, flexible organizational culture, intra-organization coordination and use of information and communication technology are essential ingredients of any technology transfer process. Also, the results show that patents play a main role in increasing profits for the joint venture companies. Language is considered as the major factor in creating a gap toward success in Joint Venture

Keywords

Product technology transfer, process technology transfer, strategic technology transfer, marketing technology transfer, top management, education and training, flexible organizational culture and barriers to technology transfer

References

• Abdul-Wahab, S.; Abdullah, H.; Uli, J. and Che Rose, R. 2010, “ Age of Joint Venture, Inter-Firm Technology Transfer and Local Firms’ Performance”, Asian Social Science, Vol. 6, No. 2.
• Abdul-Wahab, S.; Che Rose, R.; and Osman, I. 2011, “ Measuring the Effects of Relationship Quality and Mutual trust on Degree of Inter-Firms Technology Transfer in International Joint Venture”, International Business Research,Vol.4, No.3
• Ahmad, H. 2007, “Improved Operations Through Manpower Management in the Oil Sector”, Journal of Petroleum Science and Engineering, Vol. 55, Iss. 1-2.
• Al Ankari, Abdulrahman 2009, “Analysis of the Saudi Petrochemicals Sector Technology Transfer Stratiegies”, Cranfield University, United Kingdom.
• Al Dabibi, A. 2003, “Development of Middle East Petrochemical Industry, SABIC Americas Congress”, [www.sabic.com/corporate/en/newsandmediarelations], Houston, Texas, U.S.A
• Al Ghamdi, A. 2008, “Technology Transfer to Saudi Arabia Petrochemical Industry Experience”, Reaselear Polytechnic Inst., Troy, NY, U.S.A.
• Bercovitz, J. and Feldman, M. 2006, ”Entrepreneurial Universities and Technology Transfer: A Conceptual Framework for Understanding Knowledge-Based Economic Development”, The Journal of Technology Transfer, Vol. 31, No. 1.
• Blalock, G. and Gertler, P. 2008, “Welfare Gains From Foreign Direct Investment through Technology Transfer To Local Suppliers”, Journal of International Economics, Vol. 74, Issue. 2.
• Bresman, H. ;Birkinshaw, B. and Nobel, R. 2010, “Knowledge Transfer in International Acquisitions”, Journal of International Business Studies, London Business School, Regents Park, London, U.K.
• Caves, R. E. 2003, “ Multinational Enterprise and Economic Analysis”, UNCTAD, Transfer and Development of Technology in the Least Developed Countries, Cambridge, UK.
• Contractor, F. and Woodly, J., 2011, “How Tight an Embrace? Choosing the Optimal Degree of Partner Interaction in Alliances Based on Risk”, Technology Characteristics, and Agreement Provisions, Global Strategy Journal, Vol. 1, Issue 1-2.
• Gately, D.; Al Yousef, N. and Al Shaikh, H. 2011, “The Rapid Growth of Domestic Oil Consumption in Saudi Arabia and the Opportunity Cost of Oil Export Foregone”, New York University, New York, U.S.A.
• Hegedoorn, J. and Schakenraad, J. 2006, “The Effect of Strategic Technology Alliances on Company Performances”, Strategic Management Journals, Vol. 15, Issue 4.
• Henrick, B.; Birkinshaw, J. and Nobel, R.m 2010, “Knowledge Transfer in International Acquisition”, Journal of International Business Studies, vol 41, No. 1.
• Jabar, J.; Soosay, C. and Santa, R. 2011, “Organizational Learning As an Anteceded of Technology Transfer and New Product Development: A Study of Manufacturing Firms in Malaysia”, Journal of Manufacturing Technology Management, Vol. 22, Iss. 1.
• Jiangl, Q. and Chao, X.m 2010, “Protection Technology of Tight Gas Reservoir in Saudi Arabia Block B, Drilling and Protection Technology, Sinopec International Petroleum Exploration and Development”, Sinopec Petroleum Engineering Technology Research Insititute, Saudi Arabia
• Keller, D. 2008, “International Technology Transfer: Strategic for Success”, Academy of Management Executive, Vol. 4, No. 2, Louisiana State University.
• Kogut, B. 2006, “Joint Ventures: Theoretical And Empirical Perspectives, Strategic Management”, Journal, Vol. 9, Issue. 4.
• Lichtenthaler, V. 2010, “Technology Transfer Across Organizational Boundaries: Absorptive Capacity and Disruptive Capacity”, University of California Press, Vol. 53, No. 1.
• Mathews, R. 2003, “Offsets: Taking a Strategic View”, Saudi Business, Special Reports, February 2003.
• Muller, T. and Schnitzer, M. 2006, “Technology Transfer and Spillovers in International Joint Ventures”, Journal of International Economics, Vol. 8, Issue 2.
• Olayan, H. 2004, “Technology Transfer in Developing Nations”, Vol. 42, No. 31.
• Patton, W. and Rayan, J. 2009, “Making Hand Cash in a Soft Real Estate Market: Find the Next High Growth”, Library of Congress Cataloging in Publication Data, New Jersy, United States of America.
• Raff,H.; Rayan, M. and Stahlen, F. 2009, “Whole VS. Shared Ownership of Foreign Affiliates”, International Journal of Industrial Organization, Vol. 27, Iss.5.
• Ramady, M. 2010, “The Saudi Arabian Economy: Policies, Achievements, and Challenges”, By Springer, Second Edition, London, United Kingdom.
• Ramady, M. 2005, “ World Review of Science, Technology and Sustainable Development, Components of Technology Transfer: A Comparative Analysis of Offset and Non-Offset Companies in Saudi Arabia”, Inder Science Publishers, Vol. 2, No. 1.
• Roy, J.P., and Oliver, C. 2009, “International Joint Venture Partner Selection: The Role of the Host Firm Legal Environment”, Journal of International Business Studies”, Vol. 40, No. 5.
• Simon, L.; Khan, M. and Herman, K. 2001, “The Resourceful Knowledge: A Response to ‘Global 2000”, Blackwell, Oxford
• Wilson, R.; Al-Salamah, A.; Malik, M. and Al-Rajhi, A. 2004, “Economic Development of Saudi Arabia”, Vol. 4, No. 1.
• Young; I. 2011, “Saudi Kayan Forms Three-Ways JV to Build Buntol Plant”, Chemical Week Journal, Vol. 173, No. 4.