THE UNIVERSITY OF HULL Privatisation: A Saudi Case of Implementation and Organisational Change A Doctoral Thesis Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor of Philosophy Management from the University of Hull By Maher G Gasim BSc (Hons) Aeronautical Science, Saint Louis University (1997), USA. MBA/ MIS, Southern Illinois University (2001), USA. MRes Management, Lancaster University (2012), UK. Postgraduate Diploma in Research Training, University of Hull (2016), UK. June 2019 Abstract Privatisation has gained increased attention throughout the world since its emergence in the 1970s. It is argued that countries have adopted different privatisation programmes due to two main reasons; poor economic conditions and low performance of State Owned Enterprises (SOEs). Privatisation has been studied from different perspectives: in privatisation theories and the drive behind privatisation in prices and entry in interurban coaching, in the methods and benefits of privatisation and in regulations, liberalisation, and reforms that are associated with the privatisation process. Moreover, researchers have looked at the privatisation of certain industries such as communications, energy, water, steel, and transportation. Nevertheless, the focus was primarily economic and financial, while, limited work has been carried out on the implementation phase of privatisation, as most of the work has looked into the pre and post stages of privatisation. Therefore, it is the aim of this research to investigate the privatisation implementation phase of Saudi Arabian Airlines (Saudia), which started in 2000 and is still not complete. Also, the transformation process, from the public to private sector, is complex in nature, as changes imposed on privatised firms influence and possibly challenge the core and deeply embedded objectives, values, and culture that public firms hold. Thus, this research is structured on three pillars: privatisation, the change process, and employees, looking at the organisation from three different angles to gain as much understanding as possible of the context, and in turn, the implementation phase. Furthermore, since the privatisation project in Saudia is still ongoing, utilising a processual approach is of significance as it will provide insights on the change process and how change has evolved and developed with time. A qualitative approach (in-depth, semi-structured interviews) was utilised in the study as the research seeks to investigate the implementation of privatisation and how change occurs and unfolds as the firm transforms from public to private sector. The research significance lies in its exploration of the privatisation process and how it has evolved over time, hence, adopting a processual approach. In addition, the research focuses on enriching the literature on the Arab world, as it has a unique cultural context that is less explored. In addition, the Islamic perspective on privatisation and other organisational aspects is incorporated in this study, which contributes to the literature on the topic, II while at the same time providing a platform of knowledge which other Islamic countries may wish to consider or follow. The research results encompass three angles; the privatisation of Saudia, the change process, and employees. The findings show several key areas that have directly impacted all three elements, whilst overlooking certain aspects related to culture and religion has impacted the transformation process, resulting in the slow progress of the project. In addition, the results accentuate the importance of communication and HRM role in the transformation process, while reflecting on their limited practice within SOEs. Also, the processual approach enabled the context to be portrayed in a chronological way, which signifies the start and evolution of the project while unveiling different factors that influenced the change process. III Dedication This thesis is dedicated to my parents, whose lives will always be my greatest source of pride, inspiration, and support. My beloved father, who passed away in May 2018, who loved me and encouraged me to achieve my dreams and goals in life. I pray for Allah to forgive him and have mercy on his soul and grant him paradise. Also, to my beloved and precious mother, in appreciation of her endless love and prayers for me. I ask Allah to bless her with long, healthy life and joy. IV Acknowledgements Praise be to Allah; Most gracious, Most merciful for blessing me with everything that I am today. I thank Allah for giving me strength and for bringing certain individuals into my life, without whom, achieving this accomplishment would have been difficult if not impossible. Abu Huraira reported: The Prophet, peace and blessings be upon him, said, “He has not thanked Allah who has not thanked people.” Accordingly, I thank those who supported me in my life in general and the PhD journey in particular. Foremost, I am grateful and indebted to is my supervisor, Dr Denise Thursfield. I can never find words to express the gratitude and appreciation that I have for her continued support, help, and understanding of the hardship and difficulties that I have endured during my PhD journey. Her knowledge, experience, and devoted time in guiding and advising me have been indispensable to the completion of this work. I am honoured to have known her and I am privileged to have had the chance to work under her supervision. From the bottom of my heart, I say, Thank you Denise. Also, many thanks go to The University of Hull, The Business School, and The Research Office Team, particularly Andrea Bell, for extending her support. Thanks to all my friends and colleagues for sharing their valuable comments and knowledge with me. A special “Thank You” to Taibah University and Saudi Cultural Bureau in London for the opportunity and support to embark on this journey and achieve my goal. Also, to Saudia Airlines, particularly, those who participated in this research, for devoting their time and sharing their stories openly. Sincere thanks are extended to my mother, brothers, and sisters for their kindness, being there for me, and their unfailing belief in my ability to achieve this dream. Finally, my utmost gratitude goes to the loves of my life, my wife and children, I am indebted to you for everything: your love, the joy you bring me, and your endless support, encouragement, and patience. My utmost thanks and appreciation to you and I love you all. V Tables of Contents Abstract ........................................................................................................................... II Dedication ...................................................................................................................... IV Acknowledgements ......................................................................................................... V Tables of Contents ......................................................................................................... VI List of Tables .............................................................................................................. XIII List of Figures .............................................................................................................. XV Abbreviations ........................................................................................................... XVII 1. Chapter One: Introduction .................................................................................... 1 1.1 Introduction ........................................................................................................... 1 1.2 Research Overview ............................................................................................... 1 1.3 Brief Background on Saudia ................................................................................. 2 1.4 Source of the Problem ........................................................................................... 4 1.5 Statement of the Problem and Research Questions............................................... 6 1.6 Research Context .................................................................................................. 8 1.7 Research Aims ...................................................................................................... 9 1.7.1 The Privatisation of Saudia ......................................................................... 10 1.7.2 The Change Process .................................................................................... 10 1.7.3 Saudia Employees ....................................................................................... 10 1.8 Research Significance ......................................................................................... 11 1.9 Research Contribution ......................................................................................... 12 1.10 Research Methodology and Scope ...................................................................... 13 1.11 Thesis Organisation ............................................................................................. 13 2. Chapter Two: Literature Review ........................................................................ 16 2.1 Introduction ......................................................................................................... 16 2.2 History of Privatisation ....................................................................................... 16 2.3 Definition of Privatisation