Managing unexpected disruptions : the resilience of shipping companies

Modern shipping companies operate in a complex, unpredictable and dynamic environment shaped by globalisation and technical advances. Shipping companies are increasingly interlinked with economic, social and natural systems whose volatility creates unprecedented threats of disruptions that are characterised by uncertainty and complexity. A growing number of scholars recommend that resilience to unforeseen and unpredictable disruptions is necessary for organisations to survive and grow in the challenging 21st century environment. However, a literature review reveals that in the past there has been limited in-depth empirical investigation of the resilience of shipping companies, especially with respect to how shipping companies actually develop resilience capabilities. The purpose of this thesis is to explore how shipping companies can prepare themselves to cope successfully with unforeseen and unpredictable disruptions. Thus, the primary research question for this thesis is: How can shipping companies develop organisational resilience capabilities? This is addressed by investigating (1) the organisational capabilities utilised by shipping companies to manage actual disruptions and threats; (2) the activities occurring in shipping companies that contribute to the development of organisational resilience capabilities; and (3) conceptualisation of resilience by decision-makers who plan, control and facilitate organisational activities. The sample for this thesis was drawn from shipping companies operating in Australia. The companies surveyed were engaged in operating ships across a diverse range of sectors ‚Äö- liner shipping, dry bulk, tanker, passenger, general cargo, RO-RO and support services. Primary data was obtained through 30 telephone interviews of senior managers a mix of qualitative and quantitative items, enabling a pragmatic investigation based on the conceptual framework developed for this study. The conceptual framework was based upon four key organisational capabilities identified in the literature review as contributing to resilience ‚Äö- awareness, learning, innovativeness and robustness. Analysis of data confirms that shipping companies operate in an environment where multifaceted threats emerge unexpectedly from diverse causes such as market volatility, industrial accidents, natural events, supply interruptions, institutional rules and operational contingencies. The disruptions experienced by shipping companies varied in scale in terms of their impact on the companies. It was found that the variance in impact was influenced by the extent of modularity and diversity in the company. Modularity influenced the localisation of impact and diversity enabled flexibility of response. However, this study also found that shipping companies can develop resilience capabilities regardless of size, type and area of operation. This study found that traditional management techniques of planning and control for risk management are effective in reducing the likelihood of disruptions and improving the preparedness of shipping companies to manage crises. The challenge of coping with unforeseen situations remains however, as a result of trade-offs made by shipping companies in balancing risk and commercial opportunities as well as due to circumstances beyond their control. This study found that the concept of resilience is still under development among senior managers of shipping companies. Nevertheless, senior managers facilitate activities to develop resilience capabilities in their organisations. By addressing resilience of shipping companies from a holistic perspective of both avoiding and withstanding disruptions, this study contributes to the emerging body of empirical studies on organisational resilience. In addition, this study proposes a definition of resilience and provides recommendations that may be useful in guiding managerial thought and practice towards both short term performance and long term sustainability of shipping companies. From a methodological perspective, the study highlights strategies that were effective, and those that were less effective, in addressing the challenge of interviewing elites.