MANNING_STRATEGIES_IN_GREEK-OWNED_SHIPPI.pdf

This however is strongly depended on the range of

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This however, is strongly depended on the range of activities and decisions assigned to third party. The case of Greek shipping companies is a very indicative one. Greek shipping companies continue to apply today traditional models of conducting shipping business. This is so, because the vast majority of Greek shipowners consider shipping to be a profession and not simply an activity that brings in an income (Theotokas 1998). Thus, they retain the absolute control of both the strategic and the operational decisions, refusing to outsource what they consider as the main source of their companies competitive advantage, which is the cost effective technical management of their ships. For them, shipping operation was, and still remains, a core competency that could not be outsourced (Harlafti and Theotokas 2004). However, Greek-owned shipping companies have followed the path mentioned above to reduce their variable costs during the last decades: flagging out and recruitment of seafarers from the low cost countries. What differentiated them from other companies of traditional maritime countries is that they did not use extensively ship management companies for this. This is the main reason for the low penetration of the third party ship management sector in Greek shipping. Even in cases that such a company was contracted, the main task assigned was related to the crew management in a strategic context defined by the shipping company. Indeed, while only a small percentage of Greek-owned shipping companies had used ship management companies, crewing was the service that all of them had assigned (Mitroussi 2004). This paper focuses on outsourcing of crew management functions and its role on the manning strategies of the shipping companies. For this, it examines in more detail the phenomenon of outsourcing in Greek shipping and the various forms that are implemented by the companies. Section 2 introduces to the meaning of outsourcing and its application in the shipping sector, while Section 3 analyses the structure of the world seagoing labour market, along with the role that manning agencies play in the market. Section 4 presents the strategic seagoing human resources management model, which is related to the manning and outsourcing decision. The methodology of the research follows in Section 5, while Section 6 presents and discusses the results of the survey. Finally, conclusions and suggestions for further research are given in Section 7. 2. THEORETICAL FOUNDATION OF OUTSOURCING AND ITS APPLICATION IN SHIPPING Outsourcing can be defined as the process whereby activities traditionally carried out internally, are contracted out to external providers (Domberger 1998). Outsourcing creates risks and entails unique transaction costs that at times may exceed the transaction costs of having the activity directly under management’s in house control. Quinn and Himler (1996) contend that to address these difficulties “managers must answer three key questions about any activity for outsourcing. First,
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