Ship Management: Enhancing Efficiency and Cost Optimization in the Shipping Industry

Learn how ship management companies can improve operational efficiency and achieve cost optimization in the competitive shipping industry.

Running head: MANAGEMENT RESEARCH
A study on how ship management companies operate effectively in the industry and
optimized the cost involved in this competitive shipping industry
Name of the Student:
Name of the University:
Author note:

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Executive summary
Ship management industry is quite a complex industry. The primary function of the ship
management companies is to manage the entire business as well as manufacturing, maintenance
and repair of the vessels and provide the highest value to the customers. TS Maritime Sdn Bhd is
a reputed ship management company in Malaysia, which aims to improve its business efficiency
and implement cost optimization. This study provides an overview of the factors that affect the
operational and business efficiency of the ship management companies and how the cost
optimization is necessary to increase profitability of the business. The study was conducted in
the context of TS Maritime Sdn Bhd. Qualitative primary data was collected through interview
and along with secondary data, the researcher applied qualitative research method to conduct the
study. It has been found the companies should put the maximum focus on the technological
upgradation to make the systems highly efficient and also implement efficient leadership to
manage the workforce coming from diverse background. Lastly, the companies should adopt one
or more cost optimization processes as per the capital availability and requirement.

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Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................3
1.1 Introduction............................................................................................................................3
1.2 Research problem..................................................................................................................4
1.3 Research aim..........................................................................................................................5
1.4 Research objectives...............................................................................................................5
1.5 Research questions.................................................................................................................5
1.6 Significance of the research...................................................................................................6
1.7 Structure of the paper.............................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................8
2.1 Introduction............................................................................................................................8
2.2 Company overview................................................................................................................8
2.3 Factors of effective operations of ship management.............................................................9
2.4 Cost optimization in ship management................................................................................11
2.5 Leadership in ship management and its effectiveness.........................................................12
2.6 Methods adopted by the ship management company to improvise their operations for
making it safer, smarter and more efficient...............................................................................13
2.7 Strategies adopted by the ship management companies during depression of bulk cargoes
and oil recession period.............................................................................................................14
2.8 Literature gap.......................................................................................................................15

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CHAPTER 3: RESEARCH METHODOLOGY...........................................................................17
3.1 Introduction..........................................................................................................................17
3.2 Research philosophy............................................................................................................17
3.3 Research approach...............................................................................................................18
3.4 Research design...................................................................................................................18
3.5 Data collection method........................................................................................................19
3.6 Sampling technique and sample..........................................................................................20
3.7 Data analysis process...........................................................................................................20
3.8 Ethical consideration...........................................................................................................21
3.9 Time line..............................................................................................................................22
CHAPTER 4: DATA ANALYSIS, FINDINGS AND INTERPRETATIONS.............................23
4.1 Findings and interpretations................................................................................................23
4.1.1 Findings from primary data..........................................................................................23
4.1.2 Secondary data analysis................................................................................................27
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................35
5.1 Linking with the objectives.................................................................................................35
5.1.1 Linking with first objective..........................................................................................35
5.1.2 Linking with second objective......................................................................................36
5.1.3 Linking with third objective.........................................................................................36
5.1.4 Linking with fourth objective.......................................................................................37

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5.2 Recommendations................................................................................................................37
5.3 Limitations and future scope of study.................................................................................38
References......................................................................................................................................39
Appendix........................................................................................................................................44

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CHAPTER 1: INTRODUCTION
1.1 Introduction
Ship management refers to the process of dealing and managing all the activities and
operations of a ship. Usually the ship management activities are performed by independent
companies that use ships of other companies or other owners. These companies manage the ships
for their owners and pay them the amount of annual agreement between the owners and the
management companies. The ship owners have the right to lease the ship completely or some
services partially to the ship management companies (Weske 2012). It is quite a competitive
industry, with a large number of ship management companies existing.
There are various types of things that are included in the ship management business.
These are carried out over the span of before, during and after the operations. The operations
include approval for the ship, and its type, such as, if it’s a container vessel, or passenger ship,
then getting approvals for other business, supervision and maintenance services, manning the
ship and services for loading and unloading of the cargos (Bulut et al. 2012). Thus, the ship
management operations include variety types of services and it is quite a large industry with a
tough competition.
This research study is meant to explore the operations of the ship management companies
in the Malaysian ship management industry. The research will be conducted to evaluate the
effective functioning of the ship management companies in Malaysia and how the cost
optimization can be achieved in the competitive industry of ship management. The study will
present the research aim, objectives and research questions and that will be followed by an

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extensive literature review to create the context of the study. TS Maritime Sdn Bhd, Malaysia
was considered as the case study company for this study to narrow down the research process.
Information will be gathered from this company to get an in-depth overview of these ship
management companies in Malaysia. The paper will also present a proper research methodology
chosen to conduct the study, followed by data analysis, findings, discussion, and finally,
conclusion and recommendation for the ship management companies of Malaysia.
1.2 Research problem
Ship management is a complex business operation that requires efficient skill
management. This business operation has substantial exposure to financial, commercial, physical
and political risks. It is a volatile industry that faces quite a few challenges, such as, cost, which
is linked to the volatile oil prices and the general market demand, which is dependent on the
general economic state and variations in the international trade. Hence, the business has high
risks and if it is not managed properly, it can face a downfall (Weske 2012).
Various types of national compliances are strictly followed in ship management, such as,
international law, financing legislations, maritime legislation and insurance compliances. The
ship owners face a major challenge of meeting the costs to the finance and for the cargo vessels,
it is all the more challenging due to the rising cost of fuel and market overcapacity, which drives
the vessel charter rates down along with the competition. The ship managers are under big
pressure to provide effective management solutions coupled with cost optimization, while
keeping the management fee unchanged to obtain the contract from the owners. Thus, the ship
managers are responsible for meeting the requirements of the vessels that is, its safety,
efficiency, cost effectiveness and compliances. The cost of maintaining the quality, maintenance,
safety of operations and crew management are rapidly increasing and the companies need to find

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out the ways for effective management of their operations that includes reduction of costs and
also ensuring that the goals are still achievable even with limited resources.
1.3 Research aim
The aim of this research paper is to analyze the process of improvisation adopted by the
ship management companies for successfully managing the vessel without compromising on the
quality, safety, operations and environmental protection along with maintaining cost
effectiveness to stay competitive in the challenging industry.
1.4 Research objectives
The objectives of the research study are:
 To study the improvisation methods adopted by the ship management companies for
delivering smarter, safer and efficient services to retain its position in the competitive
industry
 To provide solutions for efficient cost optimization in ship management companies
 To suggest key success strategies for the ship management companies in Malaysia
 To analyze the efficient methods for achieving the goals of the companies
 To evaluate the impact of the management on the business success of the ship
management company
1.5 Research questions
1) What are methods adopted by the ship management company to improvise their
operations for making it safer, smarter and more efficient?
2) What are the factors that affect the cost optimization of the ship management company
and how to mitigate the impact of those factors and achieve cost optimization?

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3) What are the strategies adopted by the ship management companies during depression of
bulk cargoes and oil recession period?
4) How the strategic planning can be created and implemented to enhance the services of the
companies at an affordable cost and help them grow?
5) What is the impact of leadership on the ship management operations and on managing the
human resources in the ship management companies that would help them to grot the
business?
1.6 Significance of the research
The study has two important aspects. Firstly, the study will contribute in the literatures
regarding the research subject in a broad manner. The study will give a highlight on the
effectiveness of the ship management companies and how cost optimization can be achieved and
implemented to make the companies grow. Along with that, the study will also highlight the
aspect of leadership and its impact on the efficient functioning of the ship management
companies. Secondly, the study also has business implications. From the findings, the ship
management companies can get useful information on how to integrate the leadership aspect
with efficient functioning of the businesses and also focus on cost optimization to increase their
profitability. Thus, the significance of the study lies in two folds.
1.7 Structure of the paper
Chapter 1 presents the introduction of the research topic. It consists of research problem,
research aim and objectives, research questions, and significance of the research.
Chapter 2 consists of literature review which is beneficial to make the readers acquainted with
the research subject and its background. It helps the researcher to understand the research topic

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and its context in a much in-depth manner and create the conceptual map of the research for the
study.
Chapter 3 describes the research methodology, which consists of the actions and strategies
undertaken to conduction the study, such as, the method of data collection and analysis.
Chapter 4 presents the findings from the data analysis and interpretations of the data are
presented to address the research questions.
Chapter 5 is the last chapter that describes the concluding remarks on the study and also presents
some relevant recommendations to the ship management companies to achieve further growth.
This chapter establishes a connection between the research objectives and the findings.

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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
This chapter illustrates an extensive literature review on the research subject. The
research study aims to explore the effective operations and functioning of the ship management
companies in Malaysia and the way of cost optimization practices in those companies. It was
conducted on the context of TS Maritime SDN BHD, and hence, this would help the researcher
to address the research questions in a more precise manner. This researcher has explored various
previous literature and research works by other scholars on the relevant topics under the broad
research subject and the knowledge gained from the literature study are presented in this chapter.
This helps in not only creating a conceptual framework for the study but also helps the readers to
get acquainted with the research issue. The findings from the literature review are presented
below.
2.2 Company overview
TS Maritime Sdn Bhd is a totally Malaysian owned ship management and shipbuilding
company, which was founded in 1996 and currently operates in Petaling Jaya, Selangor,
Malaysia. The company is an expert in maritime services and consultancy to the ship owners. It
sells ships and provides offshore support vessels that come with complete solutions of the credit
facilities and onsite delivery to all parts of the world. The primary business motive of the
company is to provide efficient and quality management services to the local as well global ship
owners, individual or corporate. The services of TS Maritime Sdn Bhd includes ship
management services, inspection services, delivery of the vessel services, consultancy in project
management, new vessel building, subsea services, such as, underwater engineering,

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construction and the maintenance services of the vessels and decommissioning of the offshore
facilities (Tsmaritime.com.my 2019). Under the ship management services, the company
manages various types of vessels such as, passenger cruise, accommodation work boats, tugs and
barges, offshore support vessels and 7000 DWT tankers. Thus, it can be said, that since 1996, the
company is working towards providing efficient maritime solutions to the ship owners and has
been able to create market position in the Malaysian ship management industry
(Tsmaritime.com.my 2019). However, currently, with rising cost of fuel and other volatility in
the international market, the cost of operation has increased significantly, which affects the
profitability of the TS Maritime Sdn Bhd.
2.3 Factors of effective operations of ship management
The primary motive of ship management is the delivery of safe and efficient ship
operations and over the years the techniques have evolved due to advancement of technology and
various other external factors. There are external environment forces such as, economic,
commercial, institutional and social which have a significant impact on the ship management
services. As highlighted by Kristiansen (2013), economic factors are major influencing factors
that affect the business operations of any ship management company. The main assets of this
businesses, that is, the vessels are extremely capital intensive. Those are of different sizes and
types and those are extremely dependent on the technological advances. Different entities can be
involved in vessel financing, ownership, manufacturing, operating, managing, fixing, flagging,
employing crews, maintenance servicing and regulating. Thus, many economic factors are
related with the ship management activities. The sale and purchase market of vessels and their
volatility, manufacturing market and the demolition market are three interrelated markets for the
vessels and ship management are heavily dependent on the economic condition of the nation.

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Deresky (2017) pointed out that the demand for the ocean shipping is a derived demand and it is
highly volatile and inelastic because alternative transport mode for deep sea transporting is
unavailable. The rate of change in the shipping service supply is usually slow and it is elastic at
the low freight rates. The reason is that there is excess amount of loads available. On the other
hand, the rate of change is very inelastic when the freight rates are very high because the supply
level is highly limited.
It has been seen that the heavy investment in the newly built vessels were much larger
during the mid 2000s and it suddenly fell to the lowest level during 2008, that is, during the
global financial crisis and hence, affected the ship owner’s income and also the liquidity of the
sector thereby halting the investment and financing in the ship management industry (Branch
2012). Thus it can be said that level of financing and investment are one of the crucial factors
that can affect the efficient functioning of the ship management business.
Talley (2017) focused on the regulatory practices and their effect on the ship
management industry. There are some common as well as specific regulatory compliance in the
world that has to be maintained by the shipping and maritime services companies around the
world. However, the industry many a times has to deal with different unilateral policies and
different types of policy initiatives that undermines the hurdles on international conventions and
jeopardizes the free competition by putting the ship management companies at a disadvantageous
position. Hence, favorable regulatory policies are important for a smooth functioning of the ship
management companies.
Ship management companies require highly efficient and skilled human resources, which
includes technical staff to seafarers. As the job roles are too specific, it becomes strenuous for

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ageing workforce and people often find the seafarer job unattractive (Kristiansen 2013). Thus, it
is a challenge for the ship management companies to efficiently recruit and allocate the human
resources so that their maximum productivity can be achieved. Along with that, international
manning, that is, sourcing seafarers from the places that has cheap labor also is a practice in this
industry and that can have significant consequences on the effective functioning of the company
(Mitroussi and Notteboom 2015). This factor also relates to the cultural issues as sourcing human
resources from diverse cultural background can lead to cultural clashes among the seafarers.
2.4 Cost optimization in ship management
Cost optimization is a process which enables the companies to drive the spending
towards the cost reduction activities while maximizing the value of the business (Adeli and
Karim 2014). Cost optimization includes activities like obtaining the best pricing and terms in
the market for the business purchases, along with standardizing, rationalizing and simplifying the
platforms, procedures and services, and automating and digitalizing the IT and other business
operations. As highlighted by Demirel and Bayer (2016), there are three sections in the ship
management, namely, commercial management, technical management and administration, and
thus, cost optimization process must include all these three areas of ship management. The
authors highlighted that there are three sections of cost in the operations of the ship management
companies, namely, capital, operating and voyage. The capital part consists of deposit,
repayment of loan principal, and interest; the operating cost includes manning, insurance, repair
and maintenance, stores, spares and supplies, administration and management; and the voyage
cost includes bunkers, port disbursement and canal and seaway transit costs. Among these costs,
some costs are non negotiable (Drewry 2006). For example, the voyage costs, which are
dependent on the international tariffs. The bunker prices are dependent on the market and have

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little scope for negotiation. On the other hand, the operational costs, such as the repairs and
maintenance cost, supplies and spares, management and administration are negotiable and cost
optimization can be achieved. According to a study by Marfin Management Company on the
operational cost and daily overall expenses for the ships management companies comprises of
crew cost (48%), administration (18%), stores (16%), Insurance (13%) and spare and repairs
(5%) and it can be said that the largest cost the crew cost, which is not flexible for negotiation.
Similarly, insurance cost is also non-negotiable. Rest of the costs can be controlled by the
company and can be bargained for cost optimization (Albertini 2013). Demirel and Bayer (2016)
highlighted there are changes emerging in the vessel manufacturing world and much of those
manufacturing are now being relocated to low cost countries, like China and other south east
Asian countries to reduce the cost of manufacturing. Other than that, strategic procurement is
also necessary for cost optimization. It is essential for the ship management companies to
calculate between the total costs and opportunity costs in relation to the pricing strategies
(Grammenos 2013).
It can be said that the for efficient functioning of the ship management companies, cost
optimization is a crucial factor and it helps the company to stay profitable in the long term and
also to handle any type of contingencies efficiently.
2.5 Leadership in ship management and its effectiveness
As leadership is an important factor in any type of management in the business world, the
ship management industry is no exception. This industry has a different type of job category that
is not attractive to many employees, that is, the seafarer’s job. As a major part of the job profiles
contain the seafarer, it is important for the companies to not only manage the resources, but also
to keep them motivated through various initiatives. As stated by Theotokas, Lagoudis and

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Kotsiopoulos (2014), having a good maritime leader on board is always beneficial to keep the
seafarers motivated. As in most cases, the seafarers belong to different countries and different
cultures, their vision of leadership differ and hence, a good and convincing leader is required to
make them united for a better functioning of business. Other than the technical and
administrative help, the seafarers also need compassion and empathy due to their nature of job
and for that a leader with strong interpersonal skills, empathy, transparency, fairness, attitude of
not to give up and inspirational characteristics is highly required on board (Röttger, Vetter and
Kowalski 2013).
There are four types of leadership, autocratic, consultative, participatory and delegating.
As opined by Popescu (2013), the leaders on board should be able to retain control and make the
decisions promptly and according to the situations. Thus, the leaders should be able to apply any
leadership style based on the situation. At same time, the offshore activities also require effective
leadership for managing the operations in a controlled direction. Thus, in this industry the leaders
should be able to act and react as per the situations that arise rather than implementing any fixed
type of leadership.
2.6 Methods adopted by the ship management company to improvise their operations for
making it safer, smarter and more efficient
For improving the operations in the ship management, the companies focused on the
technology first to make it safer, smarter and more efficient. As stated by Wu et al. (2013),
various technological advancements have occurred in the recent years in the ship management,
such as, growth of sensor technology, robotic automation, autonomous ships, Internet of Things
(IoT), environment friendly materials, Efficient Propulsion Techniques, and Port management.
Sensors are very important technologies, which can improve the signaling and messaging

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efficiency by collecting and analyzing the data from remote locations and sending alerts. Thus,
the ship management companies are integrating the improved sensors with artificial intelligence
to make their vessels and operations more smart, safe and efficient.
Ship Energy Efficiency Management Plan (SEEMP) is another improvement measure
that the ship management companies are adopting to improve their functioning and business.
Environment protection is a major challenge for almost all industries and ship management
companies are also responsible for this task. There is rapidly increasing greenhouse gases and the
consumption of the fossil fuels which are adding pressure on the environment and the maritime
industry governing body IMO has implemented Energy Efficiency Design Index (EEDI) to
monitor the amount of CO2 and other harmful emissions from the ships (Schoch 2012). This
index is beneficial during the manufacturing of the hull and other machineries in order to reduce
the harmful gas emissions by increasing the overall efficiency of the ships. SEEMP is a new tool
for reducing the operational cost of the ships by reducing the total fuel consumption in the long
run. The SEEMP is ship specific and it must be implemented as per the type of the ships, the
cargoes carried, ship routes, and many other relevant factors and hence, the plan cannot be
implemented on a fleet or company level (Marine Insight 2018). The authors also highlighted
that two sister ships will also need different SEEMP as those would operate in different
conditions.
2.7 Strategies adopted by the ship management companies during depression of bulk
cargoes and oil recession period
During the global financial crisis, the ship management industry faced a downturn. The
crisis affected the oil price also and the volatility and uncertainty in the oil price also contributed
in the downfall of the shipping and ship management industry. The level of investment fell

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significantly and the financers preferred smaller and simple investments in this industry.
However, to mitigate the negative impact of the depression of bulk cargoes and oil recession
period, the ship management companies focused on few strategies like, cautious investments in
the financial derivatives, creating niche market, building the brand image of the companies
through various CSR activities and marketing, addressing the overcapacity problems, reducing
the financing and other operational costs, and establishing good supplier relationships (Porlida
and Kafaridis 2017).
As stated by (Goulielmos 2017), during the depression of the dry cargo sector, the
shipping and ship management companies in the world adopted two different techniques, firstly,
‘to survive’ and secondly, ‘to look after the opportunities’. The author stated that the ship owners
and the management companies are mostly reactive in nature and generally apply the cost
leadership of strategy by Porter's through the economies of scale, and cutting the average as well
as the total cost of the fleet.
Apart from that, as seen in a report by Deloitte Insights (2017), the shipping industry and
the ship management companies faced a major challenge due to slower growth of international
trade and growth capacity of the industry when the demand is low. Uncertain trade policies and
the changing trade patterns among the nations are two major factors that affect the ship
management companies apart from the bulk cargo depression and oil price volatility. The ship
companies focused on balancing the demand and supply of both the vessels as well as the
cargoes to keep their operating cost within limit.

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2.8 Literature gap
It has been seen that the ship management industries across the world has gone through a
significant revolution. The efficiency of these companies depends on many factors such as
economic factor, technology, regulations, HR practices and cost optimization. To improve its
efficiency of the vessels and the systems, the ship management companies adopted various new
technologies. However, implementing new technologies also entails more cost. As the market is
highly competitive, the companies must focus on reducing its operation cost and implementing
cost optimization. Thus, this study was conducted to give an overview about the impact of cost
optimization on the efficiency of business operations of the TS Maritime Sdn Bhd, Malaysia.

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CHAPTER 3: RESEARCH METHODOLOGY
3.1 Introduction
This chapter illustrates the strategies and actions taken by the researcher to carry out the
research study. As stated by Mackey and Gass (2015), research methodology refers to the
strategies for collecting, analyzing and interpreting the proper type of data required to answer the
research questions in most logical and unambiguous manner. The research methodology consists
of research philosophy, approach, strategy, design, data collection method, sampling and
sampling technique, data analysis method, ethical considerations and time schedule. The detailed
research methodology adopted for this study is presented below.
3.2 Research philosophy
Research philosophy refers to the set of assumptions that help the researcher to set a
direction of the way of research, that is, it is beneficial for understanding and taking actions for
conducting the study in the appropriate manner (Hamlin 2015). Positivism, interpretivism,
realism and pragmatism are the most commonly used research philosophies. While positivism
allows the researcher to apply scientific quantitative measures and tools to study the data
collected for the research, interpretivism totally depends on the judgment and interpretation skills
of the researcher. On the other hand, the researcher analyzes the realities using qualitative
methods under the realism philosophy and pragmatism allows the researcher to apply both the
qualitative and quantitative methods that is mixed methodology for conducting the study
(Goldkuhl 2012). In this given study on the effectiveness of ship management companies and
effect of cost optimization was studied and for that, the researcher applied the qualitative method
of study, that is, interpretivism philosophy. This allowed the researcher to investigate the

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research topic in a qualitative manner and have a more in-depth view of the topic. According to
this philosophy, the rest of the study design was prepared.
3.3 Research approach
Research approach refers to the plans and process of the researcher to collect the data,
analyze and interpret those for the purpose of research (Sekaran and Bougie 2016). There are two
types of research approaches, inductive and deductive. In inductive research, a new theory is
generated from the data, that is, from the generalized information, a specific conclusion is drawn.
On the other hand, the deductive approach allows the researcher to examine the research
hypothesis on the basis of already established theories, that is, a generalized conclusion is
derived from specific research phenomenon. In this given study, the researcher adopted the
deductive approach. The particular case study of TS Maritime Sdn Bhd was explored to get a
generalized conclusion by applying appropriate research methods for evaluating the research
questions.
3.4 Research design
This explains the framework of methods and the techniques to be followed by the
researcher for combining various aspects or components of the research phenomenon (Abbott
and McKinney 2013). Descriptive, correlational, experimental are some of the most commonly
used research designs. In this research, the researcher adopted the case study research design
under descriptive research design. This design is beneficial in getting an in-depth, up-close and
detailed overview of the research topic in the real world and practical scenario. TS Maritime Sdn
Bhd was chosen as the case study company to explore the impact of cost optimization on the
effectiveness of business operations. This was beneficial as it made the researcher to narrow

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down the field of study and focus on specific aspects to get a practical overview of the research
problem and derive generalized conclusion and recommendations from the analysis.
3.5 Data collection method
Data is of two types, primary and secondary. The data that is gathered directly from the
field of study through survey, interview, focus group, is called the primary data and the data that
is collected from the secondary sources, such as, books, journals, official websites, government
reports, publications and websites, newspaper articles, are called secondary data (Gupta and
Gupta 2017). In this given study, the researcher collected both the primary and secondary data.
Primary data was collected from the employees of TS Maritime Sdn Bhd, Malaysia to get a
direct overview of the practices followed by the company. This method helped the researcher to
focus on the internal work process of the company in order to achieve the organizational goals
with an optimized cost. The researcher also collected information from the secondary literature
for conducting the literature review in an extensive manner. Apart from that, secondary
information was also used to validate the findings from the primary data. Using both types of
data helps the researcher to assess the research problem in a more profound manner.
The primary data was collected through an interview method. 5 questions were framed
that focused on the practices of the company to make its systems and operations safer, smarter
and more efficient and the perspectives of the employees on the cost optimization process and its
impact on the business. The interview was structured and all the participants were asked the
same questions to maintain the uniformity in the data.

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3.6 Sampling technique and sample
Sample refers to a small subset of the larger population for research bearing the same
characteristics. As population is large and it is not possible to study the entire population for the
study, hence, a small sample is drawn that has the same characteristics. It helps to get a more
precise outcome of the study that would hold true for the larger population also (Levy and
Lemeshow 2013). Probability and non-probability sampling techniques are available and based
on the nature of the study and judgment of the researcher. Under probability sampling, the
probability of selection of each sample is equal and random, while in non-probability sampling,
each sample does not have equal and random chance of selection and it mostly depends on the
purpose and judgment of the researcher (Etikan, Musa and Alkassim 2016). In this given study,
the researcher adopted purposive sampling, which is a non-probability sampling. By applying
this technique, the researcher chose 3 employees of the case study company, TS Maritime Sdn
Bhd to conduct the interview for qualitative data collection. The employees are chosen on the
basis of their tenure in the company. Those who have spent more than 5 years with TS Maritime
were chosen for the interview, as work experience of a longer time helps the employees to have a
better knowledge about the work process and industry.
3.7 Data analysis process
Qualitative and quantitative are two types of data analysis process. While quantitative
analysis process deals with quantitative that is numeric data and applies mathematical and
statistical analytical tools for analysis purpose, qualitative analysis process deals with non-
numeric data (Sgier 2012). The social and humanitarian facets of the research topic are explored
through qualitative analysis process. As in this study, the researcher collected qualitative data
through interview, thus, qualitative research process was applied. Thematic analysis method

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was followed, in which, various relevant themes regarding the research topic were chosen and
the analysis process followed those direction. This method helps to keep the study going in the
proper and controlled direction (Braun et al. 2019). Not only the primary data, but the supporting
information from the secondary sources was also analyzed as per the themes to get the findings
from the data and address the research questions.
3.8 Ethical consideration
There are some ethical considerations that need to be followed by the researcher in
general. Firstly, the researcher properly cited all the information in the paper. Plagiarism should
be avoided throughout and for that, giving correct references is mandatory. This practice was
followed. Secondly, informed consent was taken from the participants and from the organization
before conducting the survey. They were informed about the objective and purpose of the
research and were also given the choice of voluntary participation. No one was forced to
participate in the interview and they could withdraw from the process at any time. Thirdly, the
condition of anonymity and data confidentiality was strictly maintained. No personal data of the
participants were collected and the data would be stored in the university database and would be
used for academic purpose only.

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3.9 Time line
Month
Task 1 2 3 4 5 6 7 8 9 10 11 12
Making a strategy
Making a framework
Literature review
Primary data collection
Conducting interview
Secondary data
collection
Data analysis
Presenting the findings
and discussion
Providing the conclusion
Thesis submission
(Source: Author)

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CHAPTER 4: DATA ANALYSIS, FINDINGS AND INTERPRETATIONS
This chapter presents the findings of the data analysis and its corresponding
interpretations. Qualitative primary and secondary data were collected for the purpose of this
study. The primary data was collected through interview process. A structured interview with 5
questions was conducted on 3 employees of TS Maritime Sdn Bhd to find out the perspective of
the employees who are directly related to the ship management industry in Malaysia. The
responses were interpreted using thematic analysis structure and the findings are presented
accordingly. The secondary data on the ship management industry were also collected and
analyzed under thematic analysis structure. The findings are presented below.
4.1 Findings and interpretations
4.1.1 Findings from primary data
The interview questions specifically focused on the 5 different aspects, which can be
treated as the themes for this study. Those aspects are the designation and tenure of the
participants, their perspectives on the external factors and the internal factors as well that affect
the efficiency of the ship management companies, the concept of cost optimization and its
practice in the company and how the efficiency of the company can be improved. The answers of
the participants are analyzed as per these aspects.
4.1.1.1 Designation and work experience of the employees
This aspect was chosen in order to highlight the experience and knowledge of the
experienced employees belonging to different designations. The purpose was to gain knowledge
from people who are working in different positions and handling different responsibilities in the

26MANAGEMENT RESEARCH
company on the research issue as that might lead to unveiling of different aspects of the industry
and the company as well. Tenure of the employees is important as the more the employee is
engaged in this industry, the more is the level of knowledge and thus, it is assumed that the
employees with higher work experience would have more knowledge about the details of the
operations, functionalities and technological advancements occurring in the industry (Allee
2012). Thus, from the experienced employees, it is expected a more accurate information on the
industry trend and companies can be obtained.
As expected, the respondents belonged to different positions in the company, such as,
engineer, administrative executive, and deck officer, with work experience of 8, 6 and 7 years.
All of these participants have been able to highlight some important areas that should be
addressed by the company.
4.1.1.2 External factors affecting business efficiency
The business efficiency of any organization depends on many factors and external factors
are some very significant factors. These elements are exogenous and cannot be controlled by the
company. For example, the political, economic, technological, legal and environmental factors
are some factors that affect the efficient functioning of the industries in a country. As found from
the interview responses, all the participants highlighted these above mentioned aspects.
According to them, Malaysia has an almost a stable political condition, with liberal rules for
business and thus promoting the growth of all types of business. The ship management industry
is also enjoying the benefits of the stable political conditions and international trade agreements
that promote the growth of the business not only domestically but also globally. Apart from that,
there is a stable and growing economy with 348 billion USD of revenue in 2017 (World Bank
2019), which is also beneficial for the ship management company. It helps in getting adequate

27MANAGEMENT RESEARCH
investments and contracts from the clients, who like their ship managed by companies like TS
Maritime Sdn Bhd.
Other than these, the taxations of Malaysia and the international regulations are also
important determining factors of efficient business. If there are rigid regulations, that will affect
the efficient functioning of the business. Since, ship management includes international
functioning, the liberal regulations and tax policies are crucial for cost effective business
operations. Rising and volatile fuel price is also another crucial factor that affects efficient
business operation in this industry.
Lastly, another important factor was highlighted was the technological advancement in
this industry. The ship management operations are highly dependent on improved technology
and the safety and efficiency of the vessels are the most important factors that need to be
addressed by these companies. With time, the technologies are getting advanced and he
companies should implement the new technologies to improve their efficiencies of the vessels as
well as the systems.
4.1.1.3 Internal factors that affect the efficiency of the ship management companies
All the participants have highlighted that that there are quite a few internal factors that
have a significant impact on the efficiency of business of the ship management company. The
internal technologies followed for the business purpose, the HRM practices and the nature of
workforce, capital availability, and operational costs are some of the most prevalent factors that
have a significant role to play in the business growth. As per the views of the participants, the
employee management is a very crucial factor as this company employs people from different
parts of the world, and thus has diversity in the background, in terms of culture, education,

28MANAGEMENT RESEARCH
economic condition etc. As the job profile of the seafarers are quite difficult, it is the
responsibility the company to keep the employees motivated and reduce any type of cultural
clashes. Thus, the benefits programs should be upgraded and improved for motivating the
employees and also motivational leaders are necessary in the organization to handle the diverse
workforce. Hence, efficient management of human resources is quite essential for the company.
Apart from that, the assets and liabilities of the company and capital analysis is important as that
this business is highly capital intensive. There should be steady flow of income or the revenues
and investments from the clients to keep the company running. Moreover, the company should
also conduct financial ratio analyses of its assets and liabilities before implementing new
technologies or upgradation of technologies.
4.1.1.4 Perspectives on cost optimization
All the interview participants were well aware about the concept of cost optimization.
They were also mostly aware about the cost optimization process followed in the company. Cost
optimization is a crucial process that determines the profitability of the company and hence, the
company has implemented the methods of cost optimization. It has implemented business
process digitalization, which helped in improving the database management and analytics. This
in turn helped in improving the quality and speed of the business delivery solutions to the
customers. There is also process automation, improved inventory management along with
optimization of supply chain to reduce the cost of the supplies. Reducing the cost of operation in
all departments is highly important to improve the profitability of the businesses, especially in
times of growing and volatile oil prices and increasing competition. As cost optimization
involves reducing the cost without affecting the quality of the service, hence, the best technology
should be provides in the vessel manufacturing and also in business operations to maintain the

29MANAGEMENT RESEARCH
quality of service and the vessels. Thus, it can be said that cost optimization is a challenge for the
company.
4.1.1.5 Views on improvement of efficiency of services and cost optimization
By analyzing the answers of the participants, it can be said that the views of the
employees are almost similar. All the participants emphasized that the company needed to
implement more improved technologies for more efficient, smarter and safer services. The ship
management technologies are improving quite rapidly and those are cost effective and more
efficient for the safety of the vessels. Thus, it is very important for the company to upgrade their
technologies as safety and efficiency are the topmost priorities in this business. Apart from that,
efficient leadership and HRM are also required for business efficiency. The employees should be
motivated to perform productively while maintaining a positive and supporting work
environment. Thus, responsible and effective leaders are required in this business, especially for
the seafarers on board, who require more emotional support in their jobs. Other than that, the
company should also pay attention in cost optimization. Although the fuel price is rising and that
makes the price of supplies go up, it is important for the company to control their costs through
technologies so that profitability can be increased.
4.1.2 Secondary data analysis
According to the data by World Bank, Malaysia has the GDP of 348 billion USD in 2017,
which is quite high in the South East Asia (World Bank 2019). This aspect was helpful in
assessing the economic condition of the country. Thus, the stable and growing economy coupled
with stable political and legal structures are beneficial for the growth of the businesses. The
country has quite favorable freight tax, tonnage tax, and goods and services tax which are
beneficial for the ship management companies. The labor laws are also quite favorable for

30MANAGEMENT RESEARCH
employing national and international workers. Along with that, there are technological advances,
such as, SEEMP, EEDI etc. that are incorporated in the new vessels to increase their efficiency.
Following are some statistics on the shipping industry of Malaysia that shows the rapid
growth from 2008 to 2017. These figures show that the number of vessels increased for domestic
trade in a rapid manner which also led to the growth of ship management companies in the
country. However, the international growth has not occurred as expected due to increasing oil
prices, international regulations and increasing competitions in the market (Unctad.org 2018).
Figure 1: Cargo Handling for Local and Foreign Trade, 2017
(Source: Mot.gov.my 2018)

31MANAGEMENT RESEARCH
The local trade was much lower for dry bulk and general cargo, while it is higher for the liquid
bulk. This is explained in the following images.
Figure 2: Malaysian Fleet Tonnage (By DWT and Types of ships)
(Source: Mima.gov.my 2017)
Figure 3: Growth in Malaysian Tonnage (1985 -2015)
(Source: Mima.gov.my 2017)

32MANAGEMENT RESEARCH
This indicates that the growth in other types and oil tankers outweigh the fall in the bulk,
general and container ships and thus, the business of the ship management industries has grown.
Figure 4: Handling of Export and Import Container Year, Malaysia, 2008-2017
(Source: Mot.gov.my 2018)
From 2008 to 2017, there is a growth in export and import and the rate of export of
containers was always higher than the import containers.
According to a report by Cml.fraunhofer.de (2014), it is found from the survey that in
2012, the major reason (48%) for ship losses was foundering, that is, the ship sunk or submerged,
followed by 22% the ships were wrecked or stranded on ground, and 10% got damaged due to
fire or explosion.

33MANAGEMENT RESEARCH
Figure 5: Causes for ship losses in 2012
(Source: Cml.fraunhofer.de 2014)
Thus, it can be said that technical faults, infrastructural issues along with management
issues led to the damage of ships, which is a big loss for the companies and the industries. Thus,
it can be said that the industry should put more emphasis on the improvement of the
abovementioned factors so that those issues can be reduced.
Another report by Mima.gov.my (2017) shows that Malaysia ranks 3rd in Asia and 24th in
the world of the marine industry. The statistics is shown below.
Figure 6: Rank of Malaysian Shipping
(Source: Mima.gov.my 2017)

34MANAGEMENT RESEARCH
Figure 7: Data on Malaysian Ship Ownership
(Source: Mima.gov.my 2017)
It shows that over the years, the international ship ownership has increased, while the
national ship ownership has reduced. This indicates that the Malaysian fleet tonnage has reduced
for bulk containers, general cargo and container ships, while it increased for oil tankers and other
types, such as, passenger ships.
Figure 8: Comparison between the numbers of local and international seafarers
(Source: Mima.gov.my 2017)

35MANAGEMENT RESEARCH
The above data shows that over the years 2010-2015, the number of foreign workers was
much more than the Malaysian seafarers, though both the numbers dropped significantly in the
year 2015, due to fall in the tonnage in the Malaysian industry. This follows the interview
responses by the employees of TS Maritime Sdn Bhd. All the respondents said that there are both
national and international employees, who are seafarers and there is a need for efficient leaders
to establish a supportive and productive work environment on board, as there is integration of
different cultures.
Figure 9: Required policy intervention
(Source: Mima.gov.my 2017)
It is suggested that policy interventions are required in governance, market access,
availability of manpower, maritime administration, fiscal and regulatory regimes, technology
access and support service to improve the efficiency and competitiveness of the market

36MANAGEMENT RESEARCH
(Unctad.org 2018). This strategy includes both the internal and external factors that affect the
efficiency of the businesses of the ship management companies.
Thus, it can be said that there is parity in the findings from the primary and secondary
data. The employees of the TS Maritime Sdn Bhd highlighted the need for technological
advancements and it is seen from the secondary data that majority of the ship losses in 2012
occurred due to technical faults and inadequate infrastructure. Hence, improved technology is
required to implement safer, smarter and more efficient technology in the ship management
companies.
Another important aspect is the employment of local and international employees and
thus, integration of different cultures. The perspectives of the employees of the company
matched with the data from the industry regarding the number of foreign workers. Thus, it can be
said that efficient management of national and international workers are required for a better
functioning.
However, there is no information regarding the cost optimization process practiced by the
ship management companies in Malaysia. Thus, the information could not be compared with the
perspectives of the interview respondents. Although, it can be said that the case study company
has adopted quite a few efficient cost optimization process that are beneficial for the company in
the long term by improving its profitability.

37MANAGEMENT RESEARCH
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
This chapter presents the concluding remarks on this study. The aim of the paper was to
explore the factors that affect the business efficiency of the ship management companies, and the
impact of cost optimization process on the businesses. The researcher collected both the primary
and secondary data and analyzed those using qualitative analysis processes. Interview process
was adopted and 3 employees of the case study company were interviewed. Secondary data was
collected from industry reports. Thematic analysis approach was followed for analyzing the
interview responses, and the findings were validated with the findings from the secondary data
analysis. This chapter establishes the connection between the research objectives and the
findings. It also presents the recommendations, study limitations, and future scope of study.
5.1 Linking with the objectives
5.1.1 Linking with first objective
The first objective of the study was to study the improvisation methods adopted by the
ship management companies for delivering smarter, safer and efficient services to retain its
position in the competitive industry. From the literature review, it was found that to make the
business operations smarter, safer and more efficient, the ship management companies must
focus on the upgradation of the existing technology in all the fields from manufacturing to
maintenance and to the internal business operations. As seen in the policy improvement
suggestions, it is seen that access to technology is a significant factor that indicates that the
industry must put emphasis on implementing the new advanced technologies that are available in
the market. The company must invest more on the R&D on technological improvement to make
the vessels highly efficient to reduce any type of accident and wreckage in the future. Apart from

38MANAGEMENT RESEARCH
that, sustainability measures should also be improved such as reducing the carbon emission and
for that, once again the technology should be improved.
5.1.2 Linking with second objective
To provide solutions for efficient cost optimization in ship management companies was
the second objective of the study. It is seen that the case study company has adopted quite a few
cost optimization processes. However, from the literature review and analysis of the primary
data, it was seen that there are quite a few cost optimization processes, which are meant to
reduce the operation cost of the company without affecting the quality of the service delivery.
The company has implemented the processes like business process digitalization, process
automation, improved data management and analytics system, efficient inventory management
and cost effective supply chain network. All these processes are implemented in a manner that
would reduce the business cost of the company while not affecting the solution deliveries. The
ship management industry of Malaysia should also start implementing such measures to improve
the overall profitability and competitiveness against the international companies.
5.1.3 Linking with third objective
The third objective of the study was to suggest key success strategies for the ship
management companies in Malaysia. The information gathered from the literature review on the
strategy adopted during the bulk cargo depression and oil recession was to survive and look for
opportunities. This is the basic strategy that has to be followed by the Malaysian ship
management industry. It should make proper utilization of the capital available and try to bring
in more local as well as international investors or clients, which would help the industry to grow.
The bulk, general cargoes and container ships should be increased and they should operate in the
global market to increase larger market share.

39MANAGEMENT RESEARCH
5.1.4 Linking with fourth objective
The fourth objective of the study was to analyze the efficient methods for achieving the
goals of the companies. Apart from the technological and cost factors, the ship industry should
also focus on implementing an efficient HRM and leadership in the businesses, especially on
board. Although, the industry is capital intensive, yet, the efficiency of manpower is also
important. The ship management companies face tough challenges in managing the employees
belonging to diverse background and nationality.
5.2 Recommendations
Based on the findings, the following recommendations can be provided.
 The ship management companies in Malaysia should focus on improving their
manufacturing and operating technologies. The aim should to be to improve the vessels to
the maximum extent so that further damages and accidents due to inefficient technology,
such as, sensors, signal messages and others can be avoided. This will help in long term
cost effectiveness as ship building, maintaining and repairing are highly capital intensive
activities.
 Efficient HRM should be implemented in all the companies in the Malaysian ship
management industry. As the number of foreign workers is higher than the number of
local workers, it is very essential to establish a harmonious working environment and
effective leadership to handle the diverse workforce. They should be kept motivated as
the seafarer job responsibilities are quite difficult and monotonous.
 The companies should put more focus on adopting a cost optimization process that is
suitable for their business operations. That would reduce the unnecessary wastes in the
systems and improve the efficiency as well as profitability. Implementing multiple types

40MANAGEMENT RESEARCH
of the cost optimization processes can lead to a chaos in the system if not handled
properly.
 The industry should try to expand more in the international market by increasing the
number of fleets for the general cargo, bulk cargo and container ships. As in the recent
past, these fleets have reduced significantly in Malaysia, thus, the companies should try
to focus on the expansion in the global market by adopting relevant market entry
strategies. Attracting more foreign investment would help the industry to grow in the
national as well as in the international market.
5.3 Limitations and future scope of study
The study explored the research topic by using only qualitative method. Both the primary
and secondary data were analyzed using qualitative method, which highlighted the social aspect
of the research problem. However, using quantitative method would have generated more
scientific results as statistical calculations are performed on numeric data. Due to time and
budget constraints, survey could not be conducted, which is a limitation to the study. Lack of the
availability of necessary secondary datasets is also a limitation for the study.
Thus, the future researchers have the scope of collecting numeric data and perform
quantitative functions on those datasets to find the patterns in the investments and cost operations
by the company. This would help to understand the nature and type of cost optimization methods
adopted by the companies and their effectiveness on the business efficiency and profitability.

41MANAGEMENT RESEARCH
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Appendix
INTERVIEW QUESTIONS
1. What is your designation in the organization and how long you are associated with it?
2. What according to you are the external factors that affect the efficient functioning of the
organization?
3. What are the internal factors that affect the business efficiency of the company?
4. What is your idea about cost optimization process? Does your company follow cost
optimization process?
5. How according to you the company can increase the service and business efficiency?
INTERVIEW RESPONSES
Participant 1
1) I am an engineer in TS Maritime and am associated with this organization for the last 8
years.
2) There are many external factors that affect the business in this ship management
company, namely, the economic and political scenario, technological advancement,
international regulations. There should be a stable political situation for any business to
operate effectively, which we experience in Malaysia. The economic condition is also
good and there is a good amount of investments from the clients. There is a growing list
of clients in our company, which shows their trust on our services. The ship management
industry has been going through rapid changes in the technology to make the vessels and

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the systems more efficient and safer. TS Maritime also adopting these technologies to
improve its systems. Apart from that, the international regulations are another important
factor that affects the business of the shipping industry.
3) Among the internal factors, the operation costs, technology, human resources and capital
resources are the major factors that affect the business of the company. As there are
various designations and international recruitments occur, it is highly essential to have an
efficient HRM and leadership. There have been instances of issues among the seafarers
belonging to different nations and cultures, which required management intervention. The
other factors are also important to increase profitability. The cost benefit analysis of the
resources is done for effective utilization.
4) Cost optimization is necessary for increasing profitability of a company. It is a
continuous process to obtain the best cost or pricing without affecting or reducing the
solution or service delivery and to ensure that the customer satisfaction is maintained. TS
Maritime has adopted cost optimization process to improve its business delivery.
Digitalization of the business processes, improvement in data management and analytics
for faster solutions, process automation, inventory management and supply chain
optimization are some of the cost optimization processes that are adopted by TS. It has
helped the company to improve its business profitability.
5) The company should put more focus on upgrading the technology on a regular basis,
however, the cost optimization process should be improved too. Better leadership should
be implemented to efficient management of the human resources.

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Participant 2
1) I am an administrative executive in the company and am working for the last 6 years with
this company.
2) Economic condition of the nation, technological advancement and international shipping
rules and regulations are some major external factors that affect the business of the ship
management companies. The suppliers of raw materials also play a major role in
affecting the business. To increase the business profitability, the company must focus on
the above mentioned factors.
3) Human resources, finances, business strategies, marketing are some of the internal factors
that affect the business of the company. All these factors are required for operating a
business efficiently. Technology is the major factor, which cannot be compromised on as
that makes the vessels more safe and efficient, while improved technology puts a pressure
on the available capital.
4) Cost optimization is an important process for any business as that contributes in reducing
the operation cost without affecting the service delivery and its quality. TS Maritime
implements high quality cost optimization process. Through supply chain management,
inventory management, process automation, data management and analytics, and
digitalization of the business, the company follows the cost optimization process.
5) The technology should be improved for the cost optimization process and along with
more efficient leadership should be implemented in the company.

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Participant 3
1) My designation is deck officer and I am associated with company for the last 7 years.
2) Fuel price, international regulations, supply chain network, high cost of technology, are
some of the external factors that affect the business efficiency of the ship management
industry. These factors cannot be controlled by the company and hence need to adjust its
business operations accordingly.
3) Human resources, capital resources, technologies used in the business are some of the
internal factors that have impact on the business.
4) Cost optimization refers to the reduction of business cost while maintaining the service as
before. The company implemented business process digitalization, process automation,
data management and improvement analytics, supply chain optimization, and inventory
management as some of the cost optimization processes to improve its service delivery
and profitability.
5) To improve the efficiency of business, the company should put more focus on the
technology upgradation and implementing a more efficient leadership.