Video: Monday, 11 January 2016
To stay competitive in a cut-throat global market, global seaports have traditionally put a lot of effort into minimising the cost of freight flows. By focusing on efficiency of their current process, ports are missing out on opportunities to innovate in more exploratory ways, argues Rick Hollen from Rotterdam School of Management, Erasmus University (RSM). In his PhD thesis, Hollen describes what firms, port authorities and business associations can do to innovate beyond the eternal battle for efficiency.
It is often a challenge for a single firm to find the most productive balance between investments in the current business model, and investing in new ways of doing business. This balance, coined as ‘ambidexterity’, becomes even more difficult to achieve at the aggregate level of an entire seaport, which can be seen as a complex system of interrelated and partly interdependent organisations.
The results of Rick Hollen’s case studies provide guidance to what individual port actors and multi-actor alliances can do to increase the sustainable international competitiveness for not only their own business but also for the entire port. Management innovation by these actors, which is non-technical, may also contribute to enhanced resource productivity, greater environmental performance and improved safety procedures, Hollen found.
Port authorities can play an important role in co-ordinating ‘strategic connectivity’ both within the port and with other logistical hubs, nationally and internationally. That way they contribute to the international competitiveness of the organisations involved and to the creation of strategic value for their country. Examples include investments in a port community system – such as Portbase in the Netherlands – and in pipelines that allow firms to exchange by-products and waste.
Hollen’s research also indicates that firms can improve their competitive position by establishing new collaborations with multiple partners in the port and by organising existing dependencies on one another differently. To make this all happen, these firms have to think beyond their own production processes and come up with management innovation where necessary.
Finally, Hollen demonstrates that business associations can contribute to a more innovative port by stimulating transfer of knowledge and best practices. They can also help to organise value chains that stretch across multiple partners in the port. For example, Hollen describes how business association Deltalinqs, which represents more than 700 port organisations, has successfully developed new activities and products for its members regarding safety and energy efficiency in the Rotterdam port area.
Hollen’s research demonstrates that studying complex environments like ports from multiple organisational angles can provide worthwhile new insights in promoting innovation and competitiveness. These findings can be expanded to other ports, and comparable logistic and industrial complexes, particularly those located in an economically advanced country, he concludes.
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