Enterprise Risk Management

Discussion Post Week One

John G. Stauffer

 BUSI 601

 March 24, 2012 

The maritime shipping industry is one of the most widely utilized methods of shipping goods worldwide. With 71% of the Earth being made up of water the shipping industry is a vital part of commerce for countries all over the world. Many countries have devoted billions of dollars into building massive vessels that are capable of carrying enormous amounts of goods for shipment worldwide. With vessel exceeding 1000 feet in length and capable of traveling at approximately 20 knots it is a bit shocking that an eighteenth century technique is handcuffing the industry. Piracy has the maritime shipping industry’s full attention with more than 400 attacks against ships worldwide in 2011 (Bateman, 2011). Merriam-Webster online dictionary defines piracy as “an act of robbery on the high seas”.

Maersk Line shipping is one of the worlds largest maritime shipping companies and is no stranger to the affect of piracy within their company. Even before the high profiled attack on the Maersk Alabama in the Indian Ocean in 2009, the company was taking many steps to stymie piracy against their vessels. One of the contemporary management techniques that can be utilized is enterprise risk management. Enterprise risk management is defined as a framework and process that firms use to manage the risks that could negatively or positively affect the company’s competitiveness and success (Blocher, Stout, & Cokins, 2010, p. 14).

Maersk Line shipping, like all other maritime shipping companies, are faced with the decision of how to properly safeguard their vessels, cargo, and crew while keeping shipping cost as low as possible. Maersk has taken some steps to mitigate any attacks against their vessels. These steps range from having a security team onboard every vessel when they are underway in high-risk areas to a secure “panic room” in the engine room. Obviously the cost of these measures trickle down to the...