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THE IMPACT OF ENVIRONMENTAL FORCES ON NIGERIAN NATIONAL PETROLEUM CORPORATION’S GROWTH STRATEGY AND PROFITABILITY.
ABSTRACT
The Nigerian National Petroleum Corporation (NNPC) operates in an unprecedented environmental uncertainties and response to thes dynamism and turbulences determins either its success or failure. These environmental uncertainties are categorized into internal and external environmental forces. For instance, politics, regulatory, funding, and technology, human asset significantly impact profitability and growth strategy in the oil and gas industry. In anticipation of the frequent changes and uncertainty facing the industry triggered by these forces, IOCs and NOCs continue to develop and improve on existing strategies to promote growth and achieve profitability in response to these forces. Nevertheless, the growth and profitability of the NNPC are still on the decline, as revealed in the literature. Accordingly, several studies have investigated the underperformance of NNPC over the years. However, limited research has been conducted in the context of the influence of environmental forces on the performance of the NNPC. Hence, guided by the interpretive paradigm and adopting the qualitative research method, this study seeks to understand the underperformance of the NNPC by investigating the impact of environmental forces on the corporation’s growth strategy and profitability. Data was collected from twenty-one research participants at three levels (NNPC employees, NASS members, and customers) using in-depth semi-structured interviews to gain insight into participants’ experiences with the industry’s environmental forces. Findings revealed the awareness and existence of growth strategies in response to environmental forces. Accordingly, to gain in-depth insight into the relevance of the current growth strategies adopted by the NNPC to achieve growth and profitability, current practices were compared to the constructs in Pettigrew’s CCP theory. In the light of this, communication, decision-making, and role of human resources are identified as forces affecting the growth and profitability of NNPC. Consequently, the study recommends a review on the risk assessment of the corporation and industry, decision-making and communication process, the role of human resources, commercial and non-commercial objectives, amongst others.
The study concludes by modifying the Pettigrew CCP framework and suggest its application to NNPC and NOCs to achieve growth strategy and profitability.
Keywords: environmental forces, strategy, strategic issues, growth strategy, profitability, NNPC, Oil and Gas.