The objective with this thesis is to study and create a good understanding of the current piratical activities off the Somali coast and its influence on the shipping industry. By illuminating the increasing piracy problem, we have formulated a primary research question: ‘How has the piracy in Somalia affected the behaviour of doing business for the shipping industry and its identified key actors?’ In order to answer the primary research question we use a qualitative approach and conformed our research strategy through a case study design.
Our theoretical frame of reference includes the stakeholder theory, which is important in order to identify the actors involved with this matter. Moreover, we use the value constellation theory and the institutional theory to be able to identify a structure of the the problem and its impacts. The empirical findings are a process of the data we have gathered from our interviewed respondents. It conducts on how they have been affected by the increasing piratical activities and how they believe the international shipping industry and trade has been affected.
In our analysis we have linked the theoretical frame of reference with our empirical findings. We have enlightened how the different studied actors have been affected in accordance to: international trade, the direct effect of piracy, direct costs, challenges and opportunities that has occurred from this issue, and lastly changes of interactive behaviour among the studied actors.
The thesis conclusions demonstrate that it has affected some of the identified actors, but especially the shipping industry. This through increase costs and re-routing, which have lead to delay in cargo. Furthermore, we can also conclude that the interactivities among the actors have increased and positively created constellations since many have realized that measurements needs to be done in order to decrease piracy off the Somali coast and secure today’s international business.
Table of Contents
1 INTRODUCTION
1.1 Background
1.1.1 The Suez Canal
1.1.2 Piracy
1.1.3 Piracy in Somalia
1.2 Problem Discussion
1.3 Research Questions
1.3.1 Subquestions
1.4 Purpose
1.5 Delimitations
2 METHODOLOGY
2.1 Abductive Approach
2.2 Qualitative Approach
2.3 Research Strategy
2.3.1 Designing Case Studies
2.3.2 Strengths and limitations of a case study
2.4 Data collection
2.4.1 Semi structured interview
2.4.2 The process of information selection
2.4.3 Theoretical framework selection
2.4.4 Access
2.5 Reliability
2.6 Validity
3 THEORETICAL FRAMEWORK
3.1 Stakeholder theory
3.1.1 Stakeholder analysis
3.1.2 Stakeholder mapping
3.1.3 Categorizing the approach
3.1.4 A network theory of stakeholder influences
3.1.5 Critics towards the stakeholder approach
3.2 Value Constellations
3.2.1 The strategy of Value Constellations
3.2.2 Integration and co- produced value
3.2.3 Relationships
3.2.4 Different performance of business activities
3.2.5 Critics towards the Value Chain and Value Constellations
3.3 Institutional Theory
3.3.1 Critics towards the institutional theory
3.4 Theoretical synthesis
4 EMPIRICAL FINDINGS
4.1 Related stakeholders towards The Shipping Industry
4.2 Governments, Nations and Militaries
4.2.1 International Trade
4.2.2 Interactive behaviour and Piracy Impact
4.2.3 Challenges and Opportunities
4.2.4 Related Costs
4.3 International Organizations
4.3.1 International Trade
4.3.2 Interactive behaviour and Piracy Impact
4.3.3 Challenges and Opportunities
4.3.4 Related Costs
4.4 The Insurance Industry
4.4.1 International Trade
4.4.2 Interactive behaviour and Piracy impact
4.4.3 Challenges and Opportunities
4.4.4 Related Costs
4.5 The Logistic Industry
4.5.1 International Trade
4.5.2 Piracy Impact on the Actors
4.5.3 Related Costs
4.5.4 Challenges and Opportunities
4.5.5 Interactive behaviour
4.6 The Shipping Industry
4.6.1 International Trade
4.6.2 Piracy Impact on the Actors
4.6.3 Challenges and Opportunities
4.6.4 Related Costs
4.6.5 Interactive behaviour
5 ANALYSIS
5.1 Identified Stakeholders
5.2 Interactive behaviour
5.2.1 Behaviour response to the external changes
5.2.2 Social Network and Relationships
5.2.3 Different performance of business activities
5.3 The effects of piracy on the shipping industry
5.3.1 Direct effects
5.3.2 Indirect effects
5.4 International Trade
5.4.1 Related cost- effects on the studied actors
5.5 Challenges and opportunities that has occurred
5.5.1 Challenges that are having a direct effect
5.5.2 Encountered opportunities for the studied actors
6 CONCLUSIONS
6.1 The piracy effect on the shipping industry
6.1.1 The most affected actors
6.1.2 Significant challenges and opportunities for the shipping industry
6.1.3 Costs related to direct and indirect effects
6.1.4 Resolutions in terms of changes in behaviour and interactions
6.2 Limitations of the research
6.3 Recommendations to future research
Research Objectives & Key Themes
The objective of this thesis is to study and create a comprehensive understanding of current piratical activities off the Somali coast and their influence on the shipping industry, with a primary research question focusing on how piracy has affected the behavior of doing business for the shipping industry and its identified key actors.
- Investigation of the impact of piracy on international shipping and trade routes.
- Application of stakeholder theory to identify and map the key actors involved.
- Use of value constellation and institutional theory to analyze business behavior and organizational responses.
- Examination of direct and indirect costs associated with piracy, including insurance and re-routing.
- Evaluation of challenges and opportunities arising from the piracy situation for various industry actors.
Excerpt from the Thesis
1.2 Problem Discussion
The Somali pirates have assertively increased their attacks and expanded the area. In February 2011, the Somali pirates had expanded from the coast of Somali and captured 10 vessels in the Indian Ocean and the Arabian Sea. In 2010, only three vessels had been captured and two of them were in the Gulf of Aden. Henceforth, at the end of the year 600 vessels from more than 18 different nations were held as hostages (Bowden et al., 2010). Reports by International Maritime Bureau, IMB, indicates that this year of captured of vessels will exceed last year’s record of 49 (Wright, 2011).
Through an international business perspective, we will identify the aspects that have affected the world business both indirectly and directly on the shipping industry and the identified actors. Piracy has become a major international problem; therefore, it is vital to identify affected actors and nevertheless the shipping industry (Vego, 2009).
The piracy outside the coast of Somali and Gulf of Aden is a severe and growing problem, and it clearly affects world’s largest business transport industry, the sea transportation (Bowden et al., 2010). Since the first pirate attack a few years ago, today’s pirates have shown an increasing flexibility and mobility in their tactics. The pirates adapt their techniques and equipment towards the measures that are held to combat them. The success in limitation of attacks was in the Gulf of Aden by global naval forces such as European, US, Chinese and Indian warships but, that is just a minor of the area in the afflicted route. Furthermore, it is the money that attracts the pirates, instead of earning 200 dollar a year as a fisherman, they can gain 10 000 dollar for each vessel they capture (DI Weekend, 2011). Therefore it is important to investigate on how the shipping industry have been affected, because it is the shipping companies that are the main targets in this problem.
Summary of Chapters
1 INTRODUCTION: This chapter provides the background, problem discussion, research questions, and the objective of the thesis, framing the piracy situation within an international business context.
2 METHODOLOGY: The chapter outlines the abductive approach, qualitative research strategy, and data collection methods, including interviews with key industry actors.
3 THEORETICAL FRAMEWORK: This section presents the theoretical models used, specifically stakeholder theory, value constellations, and institutional theory, to provide a structure for the analysis.
4 EMPIRICAL FINDINGS: This chapter details the data gathered through primary and secondary sources regarding governments, international organizations, the insurance industry, the logistic industry, and the shipping industry.
5 ANALYSIS: The empirical findings are analyzed through the lens of the established theoretical framework to explore the effects of piracy on industry behavior and stakeholders.
6 CONCLUSIONS: The final chapter presents the study results, summarizes the piracy effect on the shipping industry, addresses the research questions, and provides limitations and future research recommendations.
Keywords
Piracy, Somalia, international business, the shipping industry, stakeholder theory, value constellation, institutional theory, maritime security, cargo insurance, risk management, naval forces, Suez Canal, Indian Ocean, global trade, organizational behavior.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis examines the emergence of piracy off the Somali coast and investigates how these activities have specifically impacted the business operations and behavior of the international shipping industry and its key stakeholders.
What are the primary themes addressed in the work?
The main themes include the structural changes in international trade routes, the financial impact (such as rising insurance costs), the strategic responses of shipping companies, and the role of international stakeholders in addressing the piracy crisis.
What is the main research question of the study?
The research question asks: "How has the piracy in Somalia affected the behaviour of doing business for the shipping industry and its identified key actors?"
Which scientific methodologies are employed?
The authors utilize a qualitative research approach with an abductive logic. The study is structured as a case study, relying on a combination of primary data from semi-structured interviews and secondary data from reports and literature.
What topics are covered in the main body of the thesis?
The main body covers the theoretical background using stakeholder, value constellation, and institutional theories, followed by an empirical investigation into various industry sectors including government, insurance, logistics, and shipping.
Which keywords best describe the paper?
Key terms include Piracy, Somalia, international business, shipping industry, stakeholder theory, value constellation, and institutional theory.
How does the institutional theory explain the origin of Somali piracy?
The thesis argues that Somalia's state failure and the lack of a functioning legal framework have created an environment where pirates operate with impunity, as there are no effective national structures to enforce rules or deter criminal behavior.
What unique insights are provided regarding the insurance industry?
The study highlights how piracy has led to the creation of new insurance markets, such as specialized war-risk and Kidnap and Ransom (K&R) insurance, and how these additional costs influence the strategic decision-making process for shipping companies.
How do shipping companies balance costs and security?
Companies navigate a difficult trade-off between the high costs of detouring around the Cape of Good Hope, the expense of onboard security measures, and the risk of transiting through high-risk areas in the Gulf of Aden.
- Citation du texte
- Emelie Lantz (Auteur), Marika Lövenbrant (Auteur), Suheila Farah (Auteur), 2011, The Jack Sparrow Revolution. A case study of how emerged piracy off the Somali coast has affected the shipping industry and its identified key actors, Munich, GRIN Verlag, https://www.grin.com/document/181122
