Determinants of operational efficiency in the oil and gas sector

Abstract

PurposeThere is limited research that indicates the relation between knowledge management practices (KMPs), organizational culture (OC) and operational efficiency performance (OE) by using Balanced scorecards (BSC) specifically in oil and gas sector. This relationship is not yet acknowledged through empirical tests. The purpose of this paper is to fill this gap by providing a better understanding of that relationship and its importance with regard to business outcomes.Design/methodology/approachIn order to examine the relationship between OC and OE, this research takes a BSC perspective with the mediating impact of KMPs. Three hypotheses were developed using literature review and tested through the application of confirmatory factor analysis in structural equation modeling. Altogether, 568 valid responses were collected from one of the biggest oil and gas companies in the UAE.FindingsAll KMPs were found to have significant relationship with OE and OC. Also, KMPs mediate the relationship between OC and OE. In addition, the results show that the standardized coefficients of these paths and the loadings of the indicators on their factors are significant. Pearson’s correlations indicate strong evidences of the joint impact of OC and KM practices on OE, with a possible mediator impact of KM practices on OE.Research limitations/implicationsOne of research limitations is the type of organization. Future research may include other industries such as manufacturing and construction. Only the operational variable is evaluated and there is no consideration of other dimensions such as leadership type, organizational structure and technology.Originality/valueThis paper is the first in the UAE and the region to examine the relationship between OC and KMPs by considering OE from a BSC perspective with the mediating impact of KMPs.