EXPLORING THE ROLE OF DECISION-MAKING PROCESSES IN GOVERNANCE PRACTICES ON OPERATIONAL EFFICIENCY IN SAUDI ARABIA’S PETROCHEMICAL COMPANIES

Abstract

The purpose of this study is to explore the role of decision-making processes within governance practices on the operational efficiency of petrochemical companies in the Kingdom of Saudi Arabia. The literature review section explores Saudi Arabia’s Vision 2030-associated corporate governance frameworks and their implications for the petrochemical industry. It examines the challenges of breaking oil reliance, its importance in a diversified economy, and how governance affects operational performance. Data transparency and lean concepts are discussed with regard to their applicability to operational improvement. The review outlines the importance of the area in relation to Vision 2030 and fostering more economic diversification; however, it also stresses the need for balanced monitoring, geared towards enhancing both efficiency and adaptability. By following a primary qualitative method, which used semi-structured interviews to collect data from 23 interviewees, a thematic analysis was performed by developing a total of four themes. Under each theme, two codes were extracted. In this way, based on the comparison of the statements of participants, the results of this thematic analysis were obtained. This study reveals that petrochemical companies in Saudi Arabia mostly implement centralised decision-making practices. These practices enable the business organisations to ensure improved stakeholder engagement and operational efficiency as well. However, some challenges, such as resistance to change, complexity and regulatory or market changes, are associated with the overall process of corporate governance implementation in Saudi Arabian petrochemical companies. It is recommended that petrochemical organisations should focus on centralised decision-making, along with some elements of decentralisation, to increase innovation and inputs from lower-level employees. Technological upgrades are an essential requirement for the petrochemical companies, as they allow for increased efficiency in business operations.