Submitted by: Submitted by Sornn
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Pages: 24
Category: Business and Industry
Date Submitted: 08/12/2011 03:57 AM
Maritime Outsourcing and Structural Change
Henrik Sornn‐Friese, associate professor, Copenhagen Business School, hsf.ino@cbs.dk Introduction Over the past half a century the international shipping industry has been challenged by globalization and increasing international competition, as well as been profoundly implicated in its making. The still greater mobility of vessels and other factors of production in shipping is believed to make it an essentially footloose industry. Although this is not a new phenomenon, shipping is being globally integrated much faster today and at a much larger scale. An important aspect is the intensifying of competition in international freight markets, which has taken place at least since the early 1980s. The responses of shipowners have been many and varied, including international outsourcing to low‐cost regions and domestic measures to cut costs, and they have had repercussions well into the core of other maritime industries, linked directly or indirectly to the shipping industry. Maritime outsourcing and offshoring are undeniably current hot topics and should be studied as manifestations of such global structural change hinted at above. They should be conceptualized as company responses to globalization and increasing international competition. A shipping company is an open system that is in constant interaction with its general economic, political, technological and institutional environment and its task environment (suppliers, customers, competitors), exchanging information and resources with it and constantly adapting to it. The best way to organize any shipping company depends on the nature of the environment to which it must relate (Scott 1998). It will respond to change by adjusting not only its services – including the markets served – and technology, but also, and typically much more profoundly, its organizational boundaries and the geographical location of its activities. ...