School of Management Curtin Business School Firms Adaptation to Environmental Turbulence: The Case of the Libyan Tourism Sector Hafez E.L Mansour This thesis is presented for the degree of Doctor of Philosophy of Curtin University March 2016 DECLARATION To the best of my knowledge and belief, this thesis contains no material previously published by any other person, except where due acknowledgment has been made. This thesis contains no material which has been accepted for the award of any other degree or diploma in any university. The research presented and reported in this thesis was conducted in accordance with the National Health and Medical Research Council National Statement on Ethical Conduct in Human Research (2007) – updated March 2014. The proposed research study received Human Research Ethics Approval from the Curtin University Human Research Ethics Committee (EC00262), Approval Number: SOM-10-2013 Signature: Date: 30/11/2015 i ACKNOWLEDGEMENTS First and foremost, all praise and thanks to Allah, the Almighty, for giving me the strength and the patience to complete my thesis finally, after all the challenges. Life as a PhD student, a husband and a father, living in a foreign country with limited sources of income was never easy. Thus, the completion of this thesis was made possible only through the encouragement and support of many individuals. Special thanks go to my beloved wife. She has always been there whenever I needed support. I would certainly not have been able to complete this journey without her. I would like to express my sincere gratitude and deep appreciation to my esteemed supervisory team: Dr Bella Butler, Associate Professor Kirsten Holmes and Dr Subra Ananthram for their continuous support of my PhD study and related research, for their patience, motivation and immense knowledge. Their guidance helped me in the duration of the research and writing of this thesis. I could not imagine having better advisors and mentors for my PhD study. Thus, their influences will forever remain engraved in my professional career; they are my academic inspirations. I would like to thank the Ministry of Higher Education and Scientific Research in Libya for awarding me full financial support during my PhD program. I would also like to express my sincere thanks to my institution, the Faculty of Business and Economics- Omar Al-Mukhtar University, for supporting my application for a scholarship to study a PhD in Australia. I would like to express my deepest thanks to my colleagues at the University of Benghazi and Economic Research Centre in Benghazi city. My sincere thanks also goes to Curtin University and Curtin Business School, who awarded me a PhD Completion Scholarship, provided HDR student consumables allowance and gave access to the specialised equipment and research facilities. Without their precious support, it would not be possible to conduct this research. I sincerely thank all of my PhD colleagues from the School of Management for their continuous support. Warmest thanks to all my friends in Libya and Australia for their encouragement. I am particularly indebted to all 20 participants of my field study, for their willingness ii to share their time, knowledge and experience, as well as provide the secondary data. Their generosity and honesty is greatly appreciated. iii DEDICATION To my country, Libya To my beloved family members: My mother, Nouria and my father, Al-Siddiq My wife, Faiza My one and only sister, Ambarka My brothers, Salem, Ali, Achour and Jamal My nephews and nieces My beautiful little child, Al-Siddiq, who has grown up surrounded with journal articles and books, thanks for his unconditional love and patience. To my newborn son, Muftah. To my late friend, Farag Bou Khalil, “May Allah have mercy on him” iv TABLE OF CONTENTS DECLARATION ......................................................................................................... i ACKNOWLEDGEMENTS ....................................................................................... ii DEDICATION ........................................................................................................... iv LIST OF TABLES .................................................................................................... ix LIST OF FIGURES ................................................................................................... x ABBREVIATIONS ................................................................................................... xi ABSTRACT .............................................................................................................. xii Introduction .......................................................................................... 1 Introduction .............................................................................................................. 1 Background .............................................................................................................. 2 Research Questions and Objectives ......................................................................... 7 Definitions of Terms ................................................................................................ 8 Research Significance .............................................................................................. 9 1.5.1 Contribution to Theory ..................................................................................... 9 1.5.2 Contribution to Practice ................................................................................. 11 Conceptual Framework .......................................................................................... 11 Structure of the Thesis ........................................................................................... 12 Literature Review............................................................................... 15 Introduction ............................................................................................................ 15 Tourism Crisis Management Literature ................................................................. 15 2.2.1 Tourism Crisis Management: An Overview .................................................. 16 2.2.2 Crisis and Disaster Definitions ...................................................................... 17 2.2.3 Types of Tourism Crises ................................................................................ 18 2.2.4 Managing Tourism Crises and Disasters........................................................ 22 2.2.5 Summary ........................................................................................................ 38 Dynamic Capabilities Literature ............................................................................ 39 2.3.1 Dynamic Capabilities Perspective (DCP): An Overview .............................. 39 2.3.2 Development of Dynamic Capabilities Literature ......................................... 40 2.3.3 Typologies of Capabilities ............................................................................. 45 2.3.4 Levels of Dynamic Capabilities and Perceived Environmental States .......... 47 2.3.5 Building Dynamic Capabilities in Turbulent Environments .......................... 48 2.3.6 Components of Dynamic Capabilities ........................................................... 50 2.3.7 The State of Dynamic Capabilities Research in Emerging Economies and Tourism Context ............................................................................................................ 53 2.3.8 Summary ........................................................................................................ 56 v Emerging Economies Literature ............................................................................ 56 2.4.1 Emerging Economies: An Overview ............................................................. 56 2.4.2 Characteristics of Emerging Economies ........................................................ 57 2.4.3 Summary ........................................................................................................ 63 Conceptual Framework for Firms Adaptation to the Environmental Turbulence.. 64 Overall Summary ................................................................................................... 65 Research Context ............................................................................... 66 Introduction ............................................................................................................ 66 Background ............................................................................................................ 66 Structure of the Economy ...................................................................................... 70 Business Environment ........................................................................................... 72 Constitutional Development in Libya .................................................................... 74 Tourism in Libya .................................................................................................... 75 3.6.1 Tourist Attractions in Libya ........................................................................... 75 3.6.2 Tourism Development .................................................................................... 79 Conclusion ............................................................................................................. 92 Research Design and Methodology .................................................