State-owned enterprises as a political tool: The case of a Venezuelan oil company
- Author(s)
-
DOIhttp://dx.doi.org/10.21511/ppm.20(1).2022.38
-
Article InfoVolume 20 2022, Issue #1, pp. 473-487
- 1097 Views
-
286 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Public companies represent a valuable tool for the state to intervene in the economy by correcting market failures. However, critical positions that advocate its privatization continue to appear since they do not usually have great returns. This study analyzes the effect that political goals have on the efficiency of a state-owned enterprise (SOE) when ownership and management tend to be concentrated in the same actor. Agency theory served as a reference framework, using Petróleos de Venezuela (PDVSA) as a case study during the period 1995–2014. First, the period was divided into four stages differentiated by changes in the SOE volumetric strategy, the exploration strategy, the position regarding foreign capital, and the SOE participation in social development activities. Later, the SOE economic and productive efficiency was analyzed in the stages to identify relevant changes. The results indicate that the interests of the principal and the agent by good management of the SOE increase when the profit is reduced. It is mainly due to the need of the government to benefit from these activities. However, when the company surplus increase, the government tends to intensify its control to obtain additional benefits, especially during electoral events.
- Keywords
-
JEL Classification (Paper profile tab)D72, H21, L32, M11
-
References44
-
Tables4
-
Figures5
-
- Figure 1. Evolution of company’s profit and social development spending (in millions of USD dollars)
- Figure 2. Participation of citizens in national elections in Venezuela
- Figure 3. PDVSA global productivity index (GPI)
- Figure 4. PDVSA average cost of production
- Figure 5. PDVSA total crude oil, liquid petroleum gas, and net natural gas (in thousands of BOE per day)
-
- Table 1. Position regarding the oil policy between the owner and the agent by stages
- Table 2. PDVSA operation data by stage
- Table 3. PDVSA operation income and costs
- Table 4. Expenses for social developments (in millions of US dollars)
-
- Agüero, A. (2012). La dimensión geopolítica y económica del petróleo venezolano en las primeras décadas del siglo XX y su repercusión en el Estado Cojedes. Tiempo y Espacio, 22(58), 1-26. (In Spanish).
- Amamou, M., & Ben-Ahmed, K. (2019). Agency conflicts between business owners and managers: Empirical evidence from Tunisia. International Journal of Business Performance Management, 20(1), 34-45.
- Andrews, R., & Mostafa, A. M. S. (2019). Organizational goal ambiguity and senior public managers’ engagement: does organizational social capital make a difference? International Review of Administrative Sciences, 85(2), 377-395.
- Baena, C. (1999). The policy process in a petro-state: An analysis of PDVSA’s (Petroleos de Venezuela SA’s) Internationalisation strategy (1st ed.). Routledge.
- Banco Central de Venezuela. (n.d.). Tipo de cambio de referencia. (In Spanish).
- Bel, G. (2011). The first privatisation policy in Latin America: Selling state-owned enterprises in 1948–1950 Puerto Rico. Revista de Historia Economica – Journal of Iberian and Latin American Economic History, 29(2), 157-182.
- Bernier, L. (2014). Public enterprises as policy instruments: the importance of public entrepreneurship. Journal of Economic Policy Reform, 17(3), 253-266.
- Buchanan, J., & Tullock, G. (1962). The Calculus of Consent: Logical Foundations of Constitutional Democracy. University of Michigan Press.
- Caplan, B. (2005). From Friedman to Wittman: The transformation of Chicago political economy. Economic Journal Watch, 2(1), 1-21.
- Carnes, C. M., Gilstrap, F. E., Hitt, M. A., Ireland, R. D., Matz, J. W., & Woodman, R. W. (2019). Transforming a traditional research organization through public entrepreneurship. Business Horizons, 62(4), 437-449.
- Carrigan, C. (2018). Unpacking the effects of competing mandates on agency performance. Public Administration Review, 78(5), 669-683.
- Concejo Nacional Electoral. (n.d.) Resultados de elecciones en Venezuela. (In Spanish).
- Fama, E. F., & Jensen, M. C. (2008). Separation of ownership and control. In M. Huse (Ed.), The Value Creating Board: Corporate Governance and Organizational Behaviour (pp. 90-111).
- Garlick, J. (2019). China’s principal–agent problem in the Czech Republic: the curious case of CEFC. Asia Europe Journal, 17, 437-451.
- Haririan, M. (1989). State-owned enterprises in a mixed economy: Micro versus macro economic objectives. New York: Routledge.
- Hayllar, M. R., & Wettenhall, R. (2013). As public goes private, social emerges: The rise of social enterprise. Public Organization Review, 13(2), 207-217.
- He, E., & Sommer, D. W. (2010). Separation of ownership and control: Implications for board composition. Journal of Risk and Insurance, 77(2), 265-295.
- Helman, C. (2015, March 19). The world’s biggest oil and gas companies. Forbes.
- Hults, D. R. (2011). Petróleos de Venezuela, S. A. (PDVSA): From independence to subservience. In D. G. Victor, D. R. Hults, & M. C. Thurber (Eds.), Oil and Governance: State-Owned Enterprises and the World Energy Supply (pp. 418-477). Cambridge University Press.
- Inoue, C. (2020). Election Cycles and Organizations: How Politics Shapes the Performance of State-owned Enterprises over Time. Administrative Science Quarterly, 65(3), 677-709.
- Javid, A. Y., & Iqbal, R. (2008). Ownership concentration, corporate governance and firm performance: Evidence from Pakistan. The Pakistan Development Review, 47(4), 643-659.
- Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
- Lander, L. E. (2004). La insurrección de los gerentes: Pdvsa y el gobierno de Chávez. Revista Venezolana de Economía y Ciencias Sociales, 10(2), 13-32. (In Spanish).
- Lecy, J. D., Ashley, S. R., & Santamarina, F. J. (2019). Do Nonprofit Missions Vary by the Political Ideology of Supporting Communities? Some Preliminary Results. Public Performance and Management Review, 42(1), 115-141.
- Li, B., Megginson, W. L., Shen, Z., & Sun, Q. (2019). Privatization effect versus listing effect: Evidence from China. Pacific Basin Finance Journal, 56, 369-394.
- Malay, J., & Fairholm, M. R. (2020). How ideological divides serve to limit bureaucratic autonomy: A case study of the BLM. American Review of Public Administration, 50(4-5), 375-386.
- Manzano, O., & Monaldi, F. (2010). The Political Economy of Oil Contract Renegotiation in Venezuela. In W. Hogan & F. Sturzenegger (Eds.), The Natural Resources Trap (pp. 409-466). The MIT Press.
- Megginson, W. L., & Netter, J. M. (2001). From state to market: A survey of empirical studies on privatization. Journal of Economic Literature, 39(2), 321-389.
- Morales, J. C. (2005). Efecto de los cambios de status jurídico-organizativos y de posición de mercado sobre los niveles de eficiencia y eficacia de los servicios postales de España. Estudios Financieros. Revista de Contabilidad y Tributación, 273, 149-220. (In Spanish).
- Morales, J. C. (2007). Reforma de empresas públicas y su efecto en la eficiencia y eficacia: el caso de los servicios postales de España. Universitat Autònoma de Barcelona. (In Spanish).
- Mühlenkamp, H. (2015). From state to market revisited: A reassessment of the empirical evidence on the efficiency of public (and privately-owned) enterprises. Annals of Public and Cooperative Economics, 86(4), 535-557.
- Núñez, B., & Pagliacci, C. (2007). El diseño de la política petrolera en Venezuela: un enfoque de economía política. Colección Economía Finanzas. (In Spanish).
- Oǧuz, A., Karataş, A. R., Olcay, T., & Günay, M. (2014). The contribution of a state-owned enterprise to regional, industrial and agricultural production in Turkey: An example of ülfet stock company of food and soap industry. Mediterranean Journal of Social Sciences, 5(13).
- Pandey, S. K., & Wright, B. E. (2006). Connecting the dots in public management: Political environment, organizational goal ambiguity, and the public manager’s role ambiguity. Journal of Public Administration Research and Theory, 16(4), 511-532.
- Parris, P., Pestieau, H., & Saynor, P. (1987). Public enterprise as an instrument of government policy. In Public Enterprise in Western Europe (pp. 119-134).
- PDVSA. (n.d.). Relación con inversionistas. (In Spanish).
- Picazo-Tadeo, A. J., González-Gómez, F., Wanden-Berghe, J. G., & Ruiz-Villaverde, A. (2012). Do ideological and political motives really matter in the public choice of local services management? Evidence from urban water services in Spain. Public Choice, 151(1-2), 215-228.
- Roy, M. J., & Hackett, M. T. (2017). Polanyi’s ‘substantive approach’ to the economy in action? Conceptualising social enterprise as a public health ‘intervention.’ Review of Social Economy, 75(2), 89-111.
- Soyeon, K., Hyun-Han, S., & Seungwon, Y. (2019). Performance of State-Owned Enterprises During Public Elections: The Case of Korea. Emerging Markets Finance and Trade, 55(1), 78-89.
- Stazyk, E. C., & Goerdel, H. T. (2011). The benefits of bureaucracy: Public managers’ perceptions of political support, goal ambiguity, and organizational effectiveness. Journal of Public Administration Research and Theory, 21(4), 645-672.
- U.S. Bureau of Labor Statistics (n.d.) Producer Price Index (PPI).
- Vergés, J. (2014a). Eficiencia comparativa Empresa Pública vs Empresa Privada. estudios empíricos (3rd ed.). (In Spanish).
- Vergés, J. (2014b). Evaluación de la eficiencia comparativa: Indicadores y técnicas de análisis. In Universitat Autònoma de Barcelona (4th ed.). (In Spanish).
- Vickers, J., & Yarrow, G. (1991). Economic perspectives on privatization. Journal of Economic Perspectives, 5(2), 111-132.
-
Effect of work motivation and job satisfaction on employee performance: Mediating role of employee engagement
Setyo Riyanto
,
Endri Endri 
,
Novita Herlisha
doi: http://dx.doi.org/10.21511/ppm.19(3).2021.14
Problems and Perspectives in Management Volume 19, 2021 Issue #3 pp. 162-174 Views: 8990 Downloads: 7593 TO CITE АНОТАЦІЯTechnological developments are things that must be followed by companies to achieve a competitive advantage to improve performance. To achieve and improve performance, companies need active employee engagement by encouraging motivation and fulfilling their job satisfaction. This study aims to analyze the effect of motivation and job satisfaction on performance with employee engagement as a mediating variable. The research sample is Information Technology (IT) companies located in the cities of Jakarta and Bandung, Indonesia. Research respondents are system developers who handle system development activities for a project or part of an ongoing project. By using the convenience sampling technique 103 responses were obtained from IT developers. The research model analysis method uses Partial Least Square (PLS) with SMART PLS Ver 3.0 software. Empirical findings prove that motivation has a positive effect on the performance of IT employees, while job satisfaction is independent. Employee engagement does not directly affect employee performance, but the effect of mediation through motivation and job satisfaction can have a significant effect on employee performance. The research findings have managerial implications, in increasing high employee involvement, motivation needs to be encouraged to be more active and innovative, and facilitate the achievement of the desired results.
Acknowledgment
This study was made possible because of the full support of the Region III Education Service Institute (LL-DIKTI III), the Ministry of Education and Culture of the Republic of Indonesia, and the Research Center at Mercu Buana University, Jakarta. -
Management of enterprise’s financial sustainability and improvement of its methods
Galyna Azarenkova ,
Olena Golovko ,
Kateryna Abrosimova
doi: http://dx.doi.org/10.21511/afc.02(1).2018.01
Accounting and Financial Control Volume 2, 2018-2019 Issue #1 pp. 1-14 Views: 5298 Downloads: 750 TO CITE АНОТАЦІЯThe article is dedicated to the solution of the relevant issue, concerning management of enterprise`s financial sustainability. Financial sustainability assessment is one of the most important principles of enterprise`s activity, which provides information about financial capabilities of the company at the time of its evaluation and for the future. It is a requirement for the enterprise activity, which provides a high level of competitiveness, efficiency and intensity. Thus, the restoration and strengthening of financial sustainability is a priority task for the enterprise, a basic precondition for its effective functioning. The purpose of the research is to analyze financial sustainability and to improve the methods and approaches of its evaluation. The following methods were used in this research: financial and economic analysis, economic and mathematical modeling, analysis and synthesis, comparison. The main results of the study are following: the theoretical and essential characteristics of enterprise financial sustainability has been determined; the financial status of PJSC “Turboatom” has been analyzed; the taxonomic index of financial sustainability has been calculated and the forecast of its significance has been made, the approaches to increase enterprise financial sustainability have been proposed.
-
The resource-based view: a tool of key competency for competitive advantage
Akwesi Assensoh-Kodua
doi: http://dx.doi.org/10.21511/ppm.17(3).2019.12
Problems and Perspectives in Management Volume 17, 2019 Issue #3 pp. 143-152 Views: 4588 Downloads: 1052 TO CITE АНОТАЦІЯThe increasing turmoil in the external organizational setting or business environment has focused attention on capabilities and resources as the primary source of competitive advantage. Obviously, this statement points to the application of the resource-based view (RBV) of organizational management. Nevertheless, what constitutes RBV remains an illusion in many quarters of organizational management, as scholars have managed to put up their personal ideas, and managed to converge on phenomenon-driven theories, in addition to RBV. This paper reviews the concepts of RBV in light of knowledge management to highlight some critical pitfalls that might have eluded the research community on the subject matter of RBV. To this end, this paper’s educational value lies in the fact that it simplifies the concept of RBV to the new researcher in a fashion that is capable of appealing to his or her level. A cross-sectional qualitative research approach was employed in an effort aimed at understanding the role of RBV in creating a sustainable competitive advantage and key competencies. A total of 20 relevant articles were searched from different databases and search engines, including Scopus, EBSCO, ABI Inform, IEEE, PubMed, Science Direct, SABINET, IEEE, Bing, Science Direct, and Google Scholar. The findings indicate that RBV plays an important role and assists organizations not only create, nurture, and maintain competitive advantage, but also understand the collective resources needed to compete favorably in a globalized and highly competitive market. With expert knowledge workers at its core to provide support for knowledge creation, sharing, and utilization, the RBV principles discussed in this paper promise to guarantee a methodological step geared towards the achievement of competitive advantage. It, therefore, makes an incremental contribution to the RBV to attain modest improvement in organizational settings.
