The impact of privatisation on firm performance and management control in Egypt.

This study has investigated the changes in the Management Control System (MCS) practices and firm performance of three privatised SOEs in a developing country. It was based on the following central research question: 'How do external and internal factors influence the relationships between privatisation, MCS change and firm performance in less developed countries?' The research was conducted using the Egyptian construction industry as a basis for investigations. The main aim of the study was to gain an insight into the process of change instigated by the privatisation of Egyptian businesses. In order to answer the main research question, a set of four research sub-questions were settled. The first research sub-question was; 'Why and how did the Egyptian government implement the privatisation policy?' A descriptive historical analysis was applied in order to explore this research sub-question in greater depth. The analysis focused mainly on the socio-economic, political and institutional transformations seen in Egypt pursuant to the application of Structural Adjustment Programme (SAP) on May 17, 1991. The descriptive historical analysis gives an overview as to why and how Egypt implemented its privatisation policy. It focused on a review of the most important historical, political and economic events in Egypt prior to privatisation, discussed the implementation of the SAP polices and privatisation process, analysed some of the economic indicators in relation to the programme and analysed the process of social subsidy reduction following the implementation of the SAP. A mixed method case study approach was undertaken in order to answer the remaining research sub-questions. These research sub-questions were as follows: Which MCS practices were used before privatisation and how did these change after privatisation? What is the impact of privatisation on firm performance in terms of profitability, operating efficiency, output, risk and employees social responsibility, when compared to performance during the public ownership period? What are the external and internal contextual factors which affect changes in post privatisation MCS practices and firm performance? The aim of case study approach was to investigate the changes in MCS practices and firm performance resulting from privatisation, and to discover how the identified firms carried out their activities, and how their performance levels differed. In addition, examined how the transition process has been influenced by various external and internal factors, while taking other socio-economic factors into account.