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Methodology
Introduction
Methodology is a very important aspect of any research. As Anderson (2009, p. 45) states, research methodology defines the entire research. In a research process, a researcher sets forth to determine a spefific issue of interest. It is important to understatnd that primary data is very important in confirming or dispelling the issue of concern. Secondary data gotten from the review of literature is also important.
However, it is good to undrstant that secondary data only act as a guiding path. Murray (2006, p. 13) says that it informs the researcher what the previous researchers did and their findings. They also help the researcher avoid duplicating what other researhchers conluded. This would help in the advancement of research in a particular field. However, the current research is heavily dependant on primary data.
This chapter focuses on various aspects of research development. It includes methods of data collection, analysis and presentation. Every research project applies a certain research method to achieve its objectives depending on its goals. The methods used to conduct research in this project compared closely with the methods proposed in the project proposal (Anderson 2009, p. 89).
In research, design deals primarily with aims, uses, purposes, intentions, and plans within the practical constraints of time, location, money, and availability of staff (Earl 2009, p. 31). In this study, respondents were briefed in advance. The officials of Oman Oil and Oman Shell Companies were given relevant notice by the researcher. The study population was also amicably informed in order to get them prepared for the study.
Briefing was important because it could enhance reliability of the study. It is also ethical to inform people before researching on them. The findings were also made public to the researched as one way of ensuring morality in the study. Furthermore, the researcher observed researcher-researcher ethics by keeping away from criticism.
Out of 25 questionnairs sent to repondents, 24 of them were filled and returned. This was not a bad response. The response rate was high because the researcher insisted that the study was purely academic. This encouraged many employees at the Oman Oil and Oman Shell Companies to fill in their questionnairs.
Purpose of collecting and analyzing data
The researcher appreciates the fact that there are a number of researches that have been conducted regarding this topic. These reports are very useful as individuals of high integrity did them. However, this new research is expected to develop the findings of the existing research.
This would therefore demand that the researcher conducts data collection from the field, which would give the report some sense of originality. Badenhorst (2007, p. 75) asserts that primary data would help the researcher to closely compare the findings of other researchers on certain topic against his or her own findings.
Research questions
This research was based on the role of transport and logistics in the Sultanate of Oman, with focus on two oil companies that is, Oman Oil and Oman Shell. To help generate desired results, the researcher developed some questions that would help guide the entire research. The following questions were formulated to help in this process.
- What is the role of transport in the oil industry in general?
- How do outsourcing relevant to the Oman Oil and Oman Shell.
- How equipped are the Omani Oil and Omani Shell companies concerning warehousing facilities.
Hypotheses of the research
From the above three questions, the researcher developed three null hypotheses and three alternative hypothesis. The hypotheses are as follows:
H1o. Transport does not play an important role in the oil industry
H1a. Transport plays an important role in the oil industry
H2o. Oman Oil and Oman Shell do not find outsourcing of logistics from other firms relevant.
H2a. Oman Oil and Oman Shell find outsourcing of logistics from other firms relevant.
H3o. Omani Oil and Oman Shell are not well equipped as regards to warehousing facilities.
H3a. Oman Oil and Oman Shell are well equipped as regards to warehousing facilities.
Research Model
This research utilized quantitative research methods in conducting the study and collecting data. Quantitative research was used because it aims at summarizing data mathematically. In this research, the researcher was interested in drawing inferences for the intire population from a small sample.
The oil industry in this country is very large and it would be practically imposible to conduct a research on the entire population in the industry. Bak (2004, p. 23) says that most researches would be done based on a sample of the total population since in most cases, the entire population is always too large. In this regard, the research took the form of a survey whereby the researcher identified some individuals and posted questionnaires to them.
The sampled population was selected randomly in order to eliminate biases. The researcher made follow-ups by contacting respondents on phone. Interviewing is another method of data collection that was used in this research. The researcher extracted more information from respondents by calling them. This was done because some respondents with vital information needed in this research could not be reached easily. Calling them was the easiest way of reaching them.
Alternative methods of data collection
Other than the use of questionnaires, other methods could be used in collecting data in this research. As Barzun (2004, p. 74) observes, research methodology can take a number of paths, each determined by the requirements of a particular research. Kothari (2004, p. 58) notes that each research is unique in its requirements. It is the responsibility of every researcher to ensure that he or she chooses the most appropriate method.
The chosen method should lead to desirable results. In this particular research, observation would be another appropriate method that could be used to gather the desired data. In this regard, the researcher would need to participate actively in this industry. Another method would be face-to-face interview. In this case, the researcher would engage the respondents in a face-to-face interview and either use audio recorders to record the message or write down the responses.
Appropriate alternative methods
Questionnaire usage was found to be the most appropriate method because of the limited time available for the research. The researcher had limited time that could not allow for such other methods as observation. Moreover, this method allowed the researcher to drop the questionnaire to respondents and pick them later.
Most of the sampled population was taken from employees of Oman Oil and Oman Shell. A good number of these individuals are very busy and organizing face-to-face interviews for all of them was practically impossible. By dropping the questionnaires to them, these individuals would respond to the questions at their own free time and mail them back.
Advantages and disadvantages of the alternative methods
All the methods of collecting data have their own advantages and disadvantages. The questionnaires used in this research had the above-mentioned advantages. However, formulating the questionnaire was time consuming. Moreover, some of the questionnaires sent to the respondents were never returned. This was a blow to the researcher because each section of the population was assigned a given role that would help in enhancing the validity of the research.
If any sample population failed to deliver the results as expected, it would hinder the validity. Observation is good in that it allows the researcher to be involved in the activities done in the field of the research. The answers this researcher would be getting would be a first hand data without any distortion.
Moreover, the researcher would be in a position to get answers that many respondents would have avoided in their answers. However, this method is time consuming. For a researcher to participate in the oil industry actively and be in a position to provide a valid report about the same, it would demand that he is employed in the industry. It may not be possible because the research is a short-lived process. Moreover, the researcher could be lacking the skills that would help him secure a job in this industry.
Data generation
This research was based on a sample of the entire population. A few individuals in the oil industry in Sultanate of Oman were incorporated in the research. To help guide this research, questions were formulated to guide the hypotheses set for the research. The questions were designed to generate answers that would help in accepting or rejecting null hypotheses during the analysis process.
Scope of Data Collection
The researcher limited this research to Sultanate of Oman. This means that the results of this research would hold within this country or in a region with similar conditions. A region with a big difference may not find the results of this research applicable. The research was also restricted to the oil industry.
Although other industries may find this research vital, its appropriateness is only applicable in the oil industry. The number of respondents involved also limited the scope of this research. Because the researcher could not sample every single individual in this industry, only a sample was used.
Questionnaire design
There were two key methods used to gather information in this report. The first one was through the questionaire, which was administered online to the staff of the Omani Oil and Omani Shell Companies. The questionaire sought to capture various attutudes of staff at the Omani Oil and Omani Shell Companies regarding the importance of logistics in this industry.
The second source of information used for the research was literature on various aspects of logistics. The importance of the literature review was to gather information pertaining to the application of logistical techniques. Furthermore, it sought to determine the current state of research in the use of various forms of transport in this country.
The questionnaire had four Parts. The first part sought to capture the biodata information of respondents. The second part dealt with the demography and gender of the respondents. This was to ascertain the prevalence of views in varoius categories in order to ensure that if any differences came about, then they would be captured in their demographic space. The third part dealt with academic credentials and work experience.
The motivation for this section came from the understanding that different sections of population respond differently to motivators, based on age and academic credentials. The fourth part delved into the specific issues of transport, warehousing and logistics in general, starting from the understanding of the concept to the possible effects it would have on workers.
The questionaire also employed a mix of open ended and closed ended questions to capture different aspects studied. Open ended questions were used because they give respondents more time to figure out their opinions, which would make them volunteer more information related to felings, outlooks and comprehension of the subject. This would allow the researcher to understand the position of respondents as regards to employe feelings.
Open ended questions minimize some errors that could have been created in the course of research. Respondents rarely forget answers if given an opportunity to respond freely. Furthermore, respondents cannot ignore some questions because they must go through all of them.
Bell (2005, p. 36) explains that open ended questions generate data that can be used in data analysis by other researchers. In other words, they allow secondary data analysis. On the other hand, closed-ended questions are analyzed easily. That is why they were used in this study.
Each response can be coded for statistical interpretation. Nonetheless, closed-ended questions are compatible with computer analysis package (Calabrese 2006, p. 78). The technique is more specific meaning that its answers are consistent in all conditions. This aspect is impossible with open-ended questions because each respondent is allowed to use his or her own words. Finally, Cramer (2003, p. 42) explains that closed-ended questions take less time to administer unlike open-ended questions, which are detailed hence time consuming.
The questionnaires were sent to respondents through the mails that is, the researcher mailed the questions to respective respondents. The researcher arrived at this decision after considering time and reseources. The method is less costly and less time consuming (Creswell 2009, p. 73).
Furthmore, the method allows respondents to reflect on the questions and answer them accurately. Employing research assistants would be problematic because of the sensitivity of the study. Many people would be reluctant to give their views freely. The method is ineffective because answers are not independent. The respondent might not have filled the questions themselves. Moreover, the method is affected by the respondent’s level of literacy.
One big disadvantage of the technique is that there is no interaction between the researcher and the researched. This means that respondent’s reactions are not captured. Delving (2006, p. 43) says that reactions are important because they give more information in regard to the feelings of respondents.
Generally, the technique is more applicable where the researcher is interested in numbers, not deep feelings of the respondent. In this study, the researcher is interested in identifying the number of employees who feel that logistics plays an important role in this industry and the role of the government in ensuring that infrastructure is improved.
The literature collected provided information regarding this industry and the changes that have taken place since its inception. This provides a historical perspective since this industry has gone through various changes, especially from of 1990s. Secondly, the literature availed a number of theories that deal with the application of transport and warehousing in the business world. It perceives logistics to be playing some strategic fuction in any business unit.
The Omani Oil and Omani Shell Companies fit well in this parameter. Finally, the literature provided information on the state of research inn the field. Various researchers have conducted studies on various elements of transport and warehousing, as well as logistics in general (Dunleavy 2003, p. 75). This gave the study a sound academic backing and a strong basis for drawing comparisons and conclusions.
The use of the questionaire made it possible to capture issues that are unique to Omani Oil and Omani Shell. This is because there was no accessible literature with required degree of relevence to the subject matter about the the two oil frms. The targeted staff responded to questionaires online.
The availability of staff influenced the choice of this method because Omani Oil and Omani Shell operate throughout and therefore it is not possible at any one time to find all of them in one place. An online questionaire reduced the costs of data collection, assured confidentiality, and was available to the staff for a fixed period (Glatthorn 2005, p. 34). After collection, the data went through analysis, resulting to the observations and conslusions discussed in chapter three and four respectively.
Sampling
The most applicable sampling method for this exercise was stratified sampling. Considering that the targeted population consisted of staff of the Omani Oil and Omani Shell, there was no much risk of having biased data. If the survey needed to cover the entire staff of the two firms, systematic sampling coupled with stratified sampling would be ideal to ensure cross-departmental representation (Hoyle 2002, p. 39). However, this survey targeted the employees hence stratified sampling proved sufficient to collect required data.
Reliability and validity of the method
Reliability means appropriateness, applicability and truthfulness of a study. It is the ability of research instruments to produce results that are in agreement with theoretical and conceptual values. In this study, internal validity was ensured through checking the represenativeness of the sample.
The researcher ensured that the sample used captured all important characters at the Omani Oil and Omani Shell (Taylor 2005, p. 13). External validity was ensured through triangulation that is, the researcher used more than one technique in collecting data. External validity was also guaranteed by asking respondents to give their views.
Reliability means that the study is consistent and lacks any ambiquity (Krathwohl 2004, p. 91). It is related to the accuracy of instruments that is, how accurate the measuring device is in measuring what it claims to measure. In this study, it was achieved through increasing verifiability of the perspective. The researcher adopted the principles of coherence, opennes and discourse in order to guarantee reliability.
Analysis of Data
There were several interesting observations made in the process of data collection. The observations include those made from the literature review and those made from analysis of data collected through the questionnaire. In this section, the two sources of data present the categories used for disseminating the findings. In the first case, the information covers the data retrieved from various academic sources such as journals, reports, and books on issues of transport and logistics. In the second section, the attitudes and thoughts of employees of Omani Oil and Omani Shell form the basis of the report as covered by the questionnaire.
Analysis and Interpretation of Data
Analysis was based upon the three hypotheses that were developed in this research. This research seeks to reject the null hypotheses so that it can confirm the alternative hypotheses, which supports this research. The three hypotheses were as follows:
H1o. Transport does not play an important role in the oil industry
This hypothesis tries to overrule the need for this research. By holding that transport does not play any important role in the oil industry, this hypothesis would make this research irrelevant. The research is seeking to investigate the role of transport in this industry. By saying that it does not play any role in this industry, it would be like saying that it is irrelevant to this industry, hence not worth researching over.
Most of the respondents confirmed that transport sector plays a major role in the oil industry. A good number stated several reasons to support their statements. The reasons would be looked at in the discussion below. This saw the rejection of the null hypothesis above. In so doing, the alternative hypothesis below was accepted.
H1a. Transport plays an important role in the oil industry
Upon rejection of null hypothesis, this alternative hypothesis was accepted. This would create validity for this research. This hypothesis is comprehensively looked at in the discussion section
H2o. Oman Oil and Oman Shell do not find outsourcing of logistics from other firms relevant
This hypothesis was formulated to bring to focus the need for outsourcing. From the results received from the data collected from the field, majority of the respondents admitted that outsourcing proved a better way of managing logistics, especially in foreign countries. This result therefore rejected the null hypothesis above.
H2a. Oman Oil and Oman Shell find outsourcing of logistics from other firms relevant
This hypothesis was accepted upon the rejection of the null hypothesis above. Details of the findings are talk about in the discussion below.
H3o. Omani Oil and Oman Shell are not well equipped in respect to warehousing facilities
This hypothesis was formulated to put to focus the importance of warehousing in respect to the two companies, Oman Oil and Oman Shell that are under our study. A simple majority of the respondents admitted that Oman Oil and Oman Shell were well equipped with warehousing facilities. This was a rejection of the null hypothesis above.
H3a. Oman Oil and Oman Shell are well equipped in respect to warehousing facilities
This alternative hypothesis to the above hypothesis was therefore accepted. The supportive details are addressed in the discussion below.
Discussion
The sultan Oman
Middle East is known for its production of oil. As noted in the above literature review, Middle East countries have heavily depended on oil as the main income earner. Nonneman (2006, p. 19) argues that countries in this region have experienced problems with agriculture because the soil is not able to support the crop agriculture and the climatic conditions are not good enough. Oil production has been their main source of livelihood. Sultanate of Oman is one such country found in this region.
This research was conducted within Sultanate of Oman. This is a country in the Middle East. Andrzej and Buchaman (2007, p. 65) note that for a long time, the country had heavily depended on slave trade. The slaves were gotten from Africa, parts of Asia and other lesser developed regions in the world.
By the close of eighteenth century, there was a great campaign against slave trade. When this trade was banned in nineteenth century, the economy of this country was greatly affected (Clement & Henry 2010, p. 67). However, things would change following the discovery of oil. The country discovered rich oil reserves within its borders.
Since the discovery of oil, the economy of the country has experienced a growth, making it one of the countries in this region with very stable economy (Soles 2010, p. 28). It is one of the leading oil producers in the entire region, supplying its products to the OPEC, which then distributes the products to other regions in the world. With the recent increase of oil prices in the world, the industry of oil has had a growth.
Since mid 1990s, oil prices in the world have constantly been on the rise. The countries that produce this product have seen its demand rise by a huge margin in the international market. Mikulski and Katowice (2010, p. 85) observe that this has seen various governments in this region get directly involved in this industry. Governments have realized the importance of this industry. In Sultanate of Oman, the two main companies have actively been involved in this industry.
The sultanate of Oman has keenly taken interest in ensuring that its oil industry is well developed. This industry accounts for over 75 percent of the country’s total income. The government has therefore made an effort to ensure that the industry receives the attention that it deserves.
As was seen from the secondary data gathered from reviewing of literatures, proper infrastructure is one of the main requirements in this industry. The products need proper means of transport and storage facilities in order to reach various desired destinations.
Importance of Transport in the Oil Industry (Oman Oil and Oman Shell Companies)
Transport is one of the most important elements in the marketing mix. Sehgal (2011, p. 74) says that it is defined as the place element, in the four P’s of marketing. The Sultanate of Oman is heavily dependent on the oil industry as the main revenue earner. However, it is important to note that this product is consumed in location outside the country. The product is needed in other continents like America, Europe, and Africa among other places in the word.
According to the respondents that the researcher interviewed, overwhelming majority confirmed that transport is the backbone of this industry. This industry may not perform independently (Stadtler & Kilger 2008, p. 43). Oil products fall under one of the bulkiest goods in the world. Because of its liquid nature, it demands a lot of care to ensure that no spillage occurs during the process of transport.
Moreover, this product is very harmful to the aquatic life and the environment in general should it spill over. One of the respondents mentioned the huge spillage of oil by the BP pipelines along the coastlines of the America, which caused damages to the marine life. The damage was huge. When such an unfortunate occurrence takes place, the company does not only incur serious loses, but it may also face another risk of litigation.
Thompson and Martin (2010, p. 56) affirm that the affected individuals would need compensation for the damage caused. Worse still, the company shall have created a negative public image. As seen from the literature review, the market is very competitive. Firms are struggling to be competitive in a volatile market (Wood 2002, p. 85).
Any little mess may spell complete doom on a firm. Such accidents would further harm the firm by creating negative public image. It would be seen as a firm that is not able to manage its logistics. Environmentalists may also create further harm by putting restrictive measures on the firm.
The Oman Oil and Oman Shell Companies are in a very competitive market. They have made an effort to ensure that they maintain a positive image in the market always. Oman Oil Company is a national corporation that drills oil and ensures that it is marketed within the country.
Button and Brewer (2001, p. 43) say that the company has maintained a positive outlook in a market that is characterized by stiff competition. Because of government support, it has been in a position to control the local market. However, the international market has remained highly competitive.
Although the presence of OPEC may seem to be an advantage to such firms because it takes products in bulk, its presence in the market is more of a disadvantage than being advantageous. Jamshidi (2011, p. 34) says that this body acts as a cartel. It controls oil prices to its advantage.
It would be more profitable for Oman Oil Company to sell its products directly to the market than to sell through such firms as OPEC. Oman Shell is exclusively specialized in distributing oil products within the Sultanate of Oman. It has over 142 service stations across the country (Woods & West 2010, p. 59).
Oman Oil Company therefore found it wise to enter alliance rather than competition with Oman Shell Company. The two companies have since been under a collaboration to ensure efficiency in marketing of the oil products.
Oman Oil Company still has the mandate to ensure that its drills and markets the oil products within and outside the Sultanate of Oman. On the other hand, Oman Shell Company still purpose to distribute oil products within this country. Oman Shell Company would therefore help Oman Oil Company achieve part of its objective within Sultanate of Oman.
To the two firms, transport is very vital. As Oman Oil Company strives to ensure that the oil it drills reaches the market at appropriate times in appropriate measure, Oman Shell has the obligation to ensure that the refined products reach the market within the required time. Various means of transport are available in this industry. For the petroleum gas that is transported within the country, tankers have proven to be the best means of transport (Kotler 2003, p. 52).
Tankers also transport oil to various stations within the country. When the product is needed in bulk, say from one city to another, oil pipelines have proven to be very reliable. The pipelines reduce costs, dangers of spillage and risks of pilferage by the transporters. Although the initial costs of constructing the pipeline may be high, this means is cheaper and more reliable in the end.
Both the two firms have made effort to ensure that they improve their logistics. Although they still use tankers to transport their products locally, this research has confirmed that the two companies have come to embrace new means of transport. There is need to ensure that the firms maintain efficiency and effectiveness of their activities within the market.
This research has shown that the market has grown increasingly competitive and quality is the language they speak. Logistics can play a major role in ensuring that the products delivered to the market are of the right quality. The shipping of the petroleum products is currently done using special barrels. The vehicles are also fitted with special aluminum to enhance their quality further. The variety means of transport is meant to ensure flexibility in this industry.
Outsourcing of Logistics
Outsourcing has gained relevance in the near past. For a long time, many companies have struggled to ensure that they have employees in every department. However, modern management theories have supported outsourcing as the best way of performing certain activities within the firm. As Kurtz (2008) asserts, it would be irrational for a firm to hire permanent employees on activities that are rarely performed in that particular firm.
For example, issue about repair may take place once a month, after two months, twice a year or on a yearly basis. Having employees on such fields would be irrational. The employees would lack what to do on other periods, and they would be paid for services they did not perform.
The results from the field prove that outsourcing may be necessary in some instances. Some respondents were specific enough to state that outsourcing would be very vital when companies like Oman Oil Company are seeking to operate in new regions.
However, this does not overrule the need to have local companies outsourcing services of another local firm. In the first case, Oman Shell Company operates as an outsourced company for Oman Oil Company. Oman Shell is performing duties that are meant for Oman Oil Company within the Sultanate of Oman. It has taken the responsibility to distribute the products of Oman Oil within the country.
Oman Oil Company may also find outsourcing relevant in cases that involve exporting the products to other regions across the world. Although the firm has enough tankers that can facilitate logistics within the country, this may not be possible when it comes to the transportation of this product to regions outside the continent.
There are shipping companies that have specialized in this activity. Many of the respondents (especially those at managerial level admitted that it is much cheaper to outsource other companies to transport petroleum products from the country to other regions in the world.
The company may decide to purchase large ships to transport its products to various countries. However, the initial cost is prohibitive. As some of the respondents said, it would be impossible to transport these products to all the destination markets where Omani Oil sells petroleum products.
It would demand for various ships to transport these products. Other associated costs like the cost of maintenance are also prohibitive (Kumar 2004, p. 72). Moreover, as a number of respondents explained, the shipping companies have better knowledge and experience of the high seas. They are better positioned to deliver the product to desirable markets across the world in the most efficient way.
Warehousing Facilities at Oman Oil and Oman Shell Companies
Warehousing is one of the most important aspects of this industry. Oil is a very hazardous product. It is very dangerous if not properly handled. Warehousing is one of the functions of logistics. When petroleum product is drilled, it is in its raw form with all the petroleum products mixed together.
The products need to be refined to produce various petroleum products that can be considered useful. In most of the cases, this crude oil is sold to foreign countries in its original form. In such cases, storage facilities would be needed, although not to a great extent (Leedy 2010, p. 67).
The crude oil would need to be stored before it is dispatched to various countries of destination. There should be tanks meant for this job. For the refined products, a lot of care should be taken to ensure safety is maintained. Some of the petroleum products are very dangerous if their containers leak. Liquid petroleum gas and jet fuels must be stored in very safe containers that would ensure that they do not leak.
They can explode when exposed to the air. Petrol is equally dangerous when it leaks into residential areas or places where people frequent. It easily catches fire when exposed to any little source of fire. As Mare (2007, p. 19) observes, most of the petroleum products are not only bulky but also weighty. Companies involved in this industry should install proper handling facilities.
From this research, it was evident that both the two companies are well equipped with warehousing facilities. Oman Shell Company has 140 service stations within the Sultanate of Oman. Within the service stations, this company has huge tanks dug underground that have the ability to store several thousands of cubic meters of petrol.
As such, it is able to deliver to the market the petroleum products without experiencing delays or shortage of supply. It has various trucks that it uses to transport the products to its various service stations. Within the stations, this company has firefighting gadgets that would help counter any unfortunate cases of fire.
Oman Oil Company has also developed its warehousing facilities. Having been relieved of the domestic duties of supplying the products to the local market by Oman Shell Company, Oman Oil Company has shifted its attention to drilling of oil and marketing it to the international firms.
This would require that it install proper facilities that would enable storage of products before they are taken to the market. This research confirmed that the company has some of the ultra-modern facilities that can help it in managing the storage and other logistical requirements.
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