A strategic approach for improving government organisations’ performance to attract foreign direct investment : a case study of Iraq infrastructure

Abstract

Infrastructure development is considered a key facilitator for achieving economic growth in developed as well as developing world, and has a direct impact on the growth and overall development of an economy. Iraq, similar to many developing countries, has a considerable lack of infrastructure. Nevertheless, it has been found that attracting Foreign Direct Investment (FDI) can play an important role in addressing this lack. A vital step for governments to attract FDI is to create an organisational environment attractive to Multinational Corporations (MNCs). Iraq is internationally recognised as a country whose government organisations are highly corrupted and hard to do business with, a situation which has also significantly contributed to the underdevelopment of infrastructure in the country. A number of organisational performance improvement models, such as EFQM, Baldrige and PROBE, can identify and improve organisational practice and reduce performance weaknesses. However, these approaches are lengthy and their implementation can thus jeopardise any improvement due to the lack of quick wins. Given the urgency of addressing Iraq’s infrastructure needs, this research focuses on developing an approach to help Iraqi decision makers create an organisational environment attractive to MNCs in a step-change fashion.To achieve this goal, four research stages were established. The first was conducting an extensive literature review; this identified six critical steps in creating an organisational environment attractive to MNCs. The second, or exploratory, stage applied these steps, assessing Iraqi organisational practices, comparing them to world-class standards and identifying key weaknesses and strengths. The third, development, stage focused on using the findings from the exploratory stage and the literature to develop and propose an approach to creating an organisational environment attractive to MNCs. This framework was validated in the fourth stage, using case studies. The key results of this research showed that an effective and quicker approach for decision makers of Iraqi government organisations to creating an organisational environment attractive for MNCs is by establishing separate spinout organisation(s) dedicated to working exclusively with MNCs throughout the lifecycle of infrastructure development programmes. Their successful implementation will pave the way for large-scale reform for government organisations in Iraq. However, such an approach is entirely dependent on achieving top management support and commitment to change. This research contributes to knowledge by providing an alternative approach to the existing improvement methods that can help government organisations similar to the ones in Iraq, overcome their performance weaknesses and create effective organisational environment in the short term