Linear and Nonlinear Strategic Management: With Applications to Shipping

Abstract

The strategies—corporate, competitive and current—and the “effective leadership”, provided by linear management—all in all 22—were briefly presented with an application to shipping industry, like BCG matrix, and growth, as well as how to create and maintain a competitive advantage. Moreover, the essential strategies/functions of a shipping company were too presented with the prime emphasis to timing of shipping decisions. In shipping, management, as showed, is done by distance. Nonlinear management strategies showed next and the full Cartesian diagrams-phase spaces—of 3 companies— one in shipping—were used to discover the level of chaos in their business activities. A further tool has been used from nonlinear management: the “span of management” vis-à-vis the well-known “span of control”. We have showed that both top maritime countries and top shipping companies pursue the “growth strategy in a related industry” (with same knowhow). Some countries did it better, like Greece and Germany. “Growth strategy” has been accompanied by economies of scale and a lower service cost. We showed also that a growth strategy has to be moderated by: 1) forecasting that demand will be there, when ships are delivered; 2) that liquidity is secured, even in a slump, where banks and stock exchanges turn their backs to shipping, 3) the fact that prices of ships—new or 2nd hand—were indeed at rock bottom and that the 1st-best or 2nd best timing has been applied and 4) that company’s investments did not influence total supply so that to dampen markets. A mention on generic competitive strategies has been carried out and especially differentiation issue of products and services, but not pursued much as shipping has homogeneous services.