GLOBAL STRATEGY DEVELOPMENT & IMPLEMENTATION (ACADEMIC ASSIGNMENT) REV1.docx
1. Global Strategy Development and Implementation 1
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Title: GLOBAL STRATEGY DEVELOPMENT AND IMPLEMENTATION.
Oil Search is a highly responsible Energy company with a proud heritage and huge market
share in Papua New Guinea with Corporate Offices in Australia and Asset bases in Alaska in
USA and Japan and Exploration interest in the Middle East and Africa. It is also listed on the
Australian Stock Exchange and has an ethos of ‘Sustainability’ embedded in its ‘Corporate DNA’
that contributes to a Sustainable Future!!
Apparently ‘Sustainability’ is threaded and interwoven through all the aspects and is an integral
facet of its business environment and it is built and raised on the 7 pillars of Sustainability
Framework/Model such as:
Climate
Environment
Community
Health and Safety
People and Policies
Integrity and Transparency and
Economic Sustainability
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It is therefore imperative for a Multinational Company or Corporation to have a solid business
strategy foundation before entering specific ‘New Emerging Markets’. In this Report we are
venturing into evaluating and critically analyzing the Pros and Cons of New Business
Development and international expansion of its Subsidiaries like the Five Fingers of a Palm that
stretches across 5 Continents.
Utility of Strategic Management and business policy theories such as Cultural factors,
multi-level administrative requirements, Geographic and Economic Factors (CAGE) and
Adaptation, Aggregation and Arbitration Framework (CAAA).
In order to bridge the GAP between cultural, administrative, geographic and economic
distances that exist between the host and target or destination countries, it would be highly
essential to follow the PESTEL ANALYSIS of higher order thinking to outline the
different macro-environmental factors that can affect business strategies.
As global economies and socio-economic factors supersedes domestic economies, it is
quite imperative for large MNC’s to consider numerous opportunities and threats before
emerging into new markets.
Political Factors: Since Oil Search has its parent company in (Papua New Guinea) PNG,
the long-term nature of operations and its adaptability in that business environment has a
lot to say in terms of its operability and scalability in that region as it has grown to be the
largest contributor of Oil and Gas to the PNG Government Stakeholders.
Since 1929, Oil Search has grown from its base in PNG to be the largest active Oil and Gas
explorer with operative licenses for Drilling and Gas Exploration with a huge market share
and more than a 100 Million USD$ - 500 Million USD$ of payments being made in lieu
of Taxes, Royalties and Commissions being levied by the PNG Government to sustain the
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PNG economy and to enable it to stay resilient even under the pressures of Covid
restrictions and a crisis that has forced many companies and communities to perform in a
substandard manner due to market pressures and technical disruption.
As a result, vested interest in oil exploration has now grown by “leaps and bounds” to
explore the archipelago of the Middle East as Bahrain is a group of Islands with huge
potential for growth due to Oil Reserves for contingencies.
Bahrain’s National Oil and Gas Authority (BNOGA) has been incidental and
enthusiastic about drilling and exploration of oilwells in its Offshore and drilling blocks
and oilfields to the North of the Kingdom of Bahrain as it is nearest to the vast expanse of
land nearest to Saudi Arabia and the Arabian Peninsula .The estimated area of 2800 sq km
and a depth ranging from 10 -70 meters is the approximate area of an oil and gas
exploration project that requires a Production and Exploration Agreement to be signed off
at the dignitaries level with a meeting comprised of high level delegates.
The Policies are entirely different in both the host and destination countries as the Middle
East is a Tax Haven unlike the (Papua New Guinea and Australian Government) that
embodies a regulatory framework of taxes and fees levied in the form of mining and
petroleum tax (Corporate Income Tax), Group Taxes and Royalties which contribute to the
major share of government revenue after earnings before tax.
Social and Socio-economic Factors: These factors are generic in nature and has a Cause
and Effect’ relationship between the host and the destination country. In this case we are
critically evaluating and outlining the viability of Oil Exploration interests in Bahrain in
the Middle East. Here, the population demographics and distribution of wealth in terms of
‘Oil Reserves’ guarantees 100,00 Barrels per day and what more concepts like ‘Resource
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Mobilization’ and the educational level and change in lifestyle trends have a pre-
dominant role to play.
Technological Factors and Environmental Factors: The Role of Technology and
technical knowhow cannot be undermined in this COVID Era where the global pandemic
has been ransacking lives mercilessly. As such the scope and need for digital
transformations are driving in a paradigm shift into a ‘Knowledge Economy’! In order to
support the transitioning process, MNC’s are investing heavily in R&D drives too for
harnessing the strength of innovative methodologies in the operational systems.
Recognizing evolving technologies: Is the need of the hour and this is for the reason of
achieving an Optimal level of internal efficiency but there are a few inherent THREATS
to disruptive technologies that could hamper of affect the business environment.
New technological platforms could provide the base for Administrative and Operational
back up and trouble shooting issues and Cybersecurity concerns could also be addressed
by an In-House Team of Subject Matter Experts (SME), with technical knowhow and
expertise in Information Technology and Systems. This is to help combat the challenge of
becoming obsolete and deal with erupting issues due to technological advancements as
CHANGE is the only CONSTANT!!
Environmental Factors: This kind of critical evaluation and analysis is the most realistic
of all the different measures used to gauge the extent of hazards and the impact thereof
when strategically planning an implementation of MNC Proliferation into specific
Emerging Markets for New Business Development taking into consideration the market
forces and competitive edge on the basis of the Firm’s Strategy, Structure and
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Rivalry; Factor Conditions; Demand Conditions; and Related and Supporting
Industries in the same business Segment. (Porters Diamond Framework/Model)
While Oil Exploration and Drilling interests in the Middle East and particularly in the
archipelago like the Kingdom of Bahrain seems to be gaining prominence. It is important
to note that Bahrain, as an emerging market with a Govt revenue from oil reserves
exceedingly approximately 68.4% from current market data and statistics, has engaged
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many international companies to drill Offshore appraisal wells to evaluate the commercial
viability of the gas reserves in the deep gas reservoirs and allows permits for exploration
licenses with Knowledge Partners.
It is also to be noted that laying of Pipelines for drilling and exploration purposes requires
a thorough study of the Oilfields and the government stakeholders therefore invites
companies like Oil Search to formally register an Expression of Interest (EOI) in order to
find access to a virtual Data Room and there are several rounds of discussions involved in
the bidding process before it is possible to enter into a MOU (Memorandum of
Understanding) and sign an Exploration and Production Sharing Agreement.
Other Reportable Factors from Personal Experience:
While it is possible for international companies like Oil Search to diversify investments
and vested interests in the Middle East. It is to be noted that converting an Oil Field into
an Middle East Asset base involves a highly complicated process of entering into several
dialogues with the Govt Stakeholders and it involves a bidding process, compliance and
strict adherence to certain protocols and acquisition of a Strategic Asset is a great
achievement indeed.
Finally, to bridge the knowledge GAP between cultural, administrative and factors
affecting the dynamism of the Economy in which it operates a strategic asset, it is
more than imperative to select an appropriate business strategy and risk mitigation
strategies inherent due to technical internal and external factors.
When high level delegates are involved, it includes (Business Organizations,
Government Stakeholders of the PNG Govt and the National and Federal Authorities
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of the Kingdom of Bahrain) and this facilitates arrangement of power and water
resources and logistics.
Addressing logistical concerns in itself is a huge concern due to a number of factors like
difference in time zones, liaison and coordination with global corporate offices in order to
fly the Rotational Staff (both In and Out) and the kind of staff include geophysicists and
geologists and training coordinators and Risk Mitigation Mangers and Occupational Health
and Safety Practitioners for the requirements Onshore and Offshore.
While the fundamentals of Global Strategic Planning illustrates deeper emphasis on the
deeper fundamentals of Strategic Planning and Implementation , it is also necessary to
focus on alliance based issues, legal rules and regulations of the target / destination country ,
religious and local sentiments , cultural restrictions, intellectual property rights and
challenges in implementing technological innovations during a PHASE of business
expansions to support the Operational base in the newly acquired STRATEGIC ASSET
BASE!!
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This Figure is an Illustration of the Local Community of the Host Country in PNG (Papua New
Guinea) Vs a Self-Explanatory picture of the lucrative advantage in the Destination Country.
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Works Cited
Qian. W.,Tilt,C. and Belal,A orcid.org/0000-0001-6144-8907 (2021) Social and Environmental
Accounting in Developing Countries: Contextual Challenges and Insights. Accounting, Auditing
and Accountability. Journal, 34 (5). pp. 1021-1050. ISSN 0951-3574 http://doi.org/10.1108/
AAAJ-03-2021-5172