Analysis of Oman Shipping Company's Innovation and Strategic Approach

This report provides a comprehensive analysis of the Oman Shipping Company, focusing on its strategic management processes and approach to innovation. The report begins with an executive summary and introduction, providing a background overview of the company's establishment and growth within the maritime industry. It examines the nature of decision-making within the organization, emphasizing the participatory and democratic structure that values employee involvement. The report highlights the degree of innovativeness, showcasing the company's commitment to developing a world-class fleet and its initiatives to support maritime education and training. The discussion section delves into the strategic forces driving innovation, including external and internal stakeholders and micro and macro environmental factors. It analyzes the company's closed innovation model and its partnership with external entities. The report also explores the key success factors, sustainability issues, and offers recommendations for the future. In conclusion, the report provides a detailed understanding of Oman Shipping Company's innovation strategy, its impact on the industry, and its commitment to growth and sustainability.

Running Head: OMAN SHIPPING COMPANY
OMAN SHIPPING COMPANY
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Executive Summary:
Oman Shipping Company has always been associated with innovation, improvement and
success. Thus, the company has emerged significantly in its line of operation. The variety of
product it produces, coupled with other innovative market operations makes it a significant name
in the global shipping company. Thus, in this project report the basic company structure along
with its internal and external functioning would be through analyzed to understand the core
business process of Oman Shipping Company.

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Table of Contents
Introduction:...............................................................................................................................................3
Background Overview:.............................................................................................................................4
Nature of Decision making:.....................................................................................................................5
Degree of innovativeness:.......................................................................................................................6
Discussion:...................................................................................................................................................7
Strategic Forces behind the Innovation and Experimentation:...............................................................7
Analyzing the Internal Management structure of Oman Shipping Company:.......................................10
The Success Story of Oman Shipping Company:....................................................................................12
Key Success Factors Associated with Oman Shipping Company:...........................................................13
Sustainability issues associated with Oman Shipping Company:...........................................................15
Recommendation:.....................................................................................................................................16
Conclusion:................................................................................................................................................16
References:................................................................................................................................................18

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Introduction:
Part 1:
Oman is considered one of the leading nations in seafaring. It pioneered in this field as its
ancient civilization “Majan” had connections and relations with other civilizations around the
world, especially in Iraq, India and Europe. In Ras Al Jinz in eastern Oman, the remains of Reed
Boat, which was used for trading with India and dated back to over 4,500 years ago, were found
(Landen, 2015). Due to the Omani capabilities in ship and boat building, as well as their strong
sea navigation skills, ports and harbors in Oman were well-known around the world. Omanis
memorize the way of building ships by heart, as they have been practicing this craft and passing
it to new generations for a long time. Craftsmen produce traditional Omani fishing boats,
depending only on their memory, during a period of three to six months. Meanwhile, building a
dhow takes around six months, depending on its size. The most prominent wood used in
shipbuilding is teak, which is a tropical hardwood imported from India. Maritime has always
played a very significant role in the past, present as well as in the future to shape Oman.
Therefore keeping this in mind, immensely massive investments are being made and effort is
being made to help Oman emerge as a focal point of international maritime trade. Thus the Chief
Executive Officer of Oman Tariq bin Mohammed Al Junaidi has identified certain key business
strategic factors that have helped Oman Shipping Company emerge such a big name in the
shipping industry. . Oman Shipping Company aims to be the very first choice partner in maritime
transportation and extend itself in offering reliable, efficient and competitive shipping solutions
to all its clients. The efficient managerial team of Oman Shipping Company aims to incorporate

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well planned and innovative expansion strategies through its product development strategy,
expanding market share strategies, better retention and staff management strategies or over all
operation efficiency strategies. Oman Shipping Company has made it bigger and better through
its continuous expansion and meaningful partnership.
Background Overview:
Oman shipping company is the outcome of the Omani Government’s vision to build a
national vessel fleet which would be the sole in charge of catering to the maritime transportation
requirements of the nation’s rapidly growing industries like hydrocarbons, petrochemical or
mining. Thus the Oman Shipping Company (OSC) finally came into existence in the year 2003
(Riffai, et al. 2016). The commercial undertakings and operations of the company started in the
year 2005. It was completely a closed company wholly owned by the Government of the land,
and completely dedicated towards adding value in Oman’s liquefied natural gas (LNG) chain and
economy (Shipping company, 2019). Since its inspection, the company has witnessed huge
growth and expanded through innovations and diversifications. Beginning with transportation of
domestically acquired LNG cargoes to the international market, Oman Shipping Company
improved its operations and evolved to include huge fleets like very Large Crude Carriers
(VLCCs), Product Tankers, Chemical Tankers, LPG Carriers Very Large Ore Carriers (VLOCs),
Bulk Carriers, multi-purpose vessels and, lately, a containership as well (Rivas-Hermann, Köhler
and Scheepens, 2015). The constant diversification accompanied by smart technological
innovations has helped the company constantly stretch its potentials and create new bench marks
in its market operations. Today Oman shipping Company stands strong with its well-diversified
and very successful fleet comprising of more than 49 modern vessels with its headquarter in

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Muscat. It has successful emerged as the only name in the shipping transportation service
provider, closely aligning its business strategies and investment ventures with the strategic
maritime transportation interests of the Sultanate’s rapidly industrializing economy as. Tgere are
varied other shipping comoanies in Oman who have not made it that big yet but are emerging at
a steady pace like Sohar Shipping, Falcon Freight Connect, Muscat international Shipping &
Logisitcs LLC and many more.
Nature of Decision making:
Though it is considered to a relatively young shipping company yet in these few years it
has captured significant amount of market share. The internal functioning and atmosphere of the
company is very healthy and employee inclined. The employees are valued as most significant,
relevant and very necessary part of the organization’s decision making process. Thus there is an
active involvement of both the managerial staffs as well as the employees in the decision making
process making it a democratic and participatory organizational structure (Hsu, 2015). Oman
shipping company believes in maintaining a free and democratic structure of communication
pattern by ensuring that all its employees actively participate in the decision making process of
the firm. Often brain storming sessions are conducted specially with the new joiners and trainees
to ensure that they are equally motivated and feel that they for an integral part of the
organization. The organizational heads have recognized certain crucial steps in there
organizational decision making process which includes identifying the core problems, analyzing
on the problem to find the required areas that need to be addressed, constantly developing and
evaluating varied techniques to solve the problem, choosing from the best alternatives available,
communicating these decisions to the employees on a regular and systematic manner and finally

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employing the decision on a real time basis . Various forecasting tools are employed in the
decision making process by the firm like the decision tree which is basically a graphical
representation of the outcome or the consequences of the already action taken and decisions
made to help the organization bring in necessary changes in its decision making process. Apart
from decision tree other methods or tools employed in the decision making process includes
queuing models, distribution models, inventory models, pay-off matrix and game theory
Degree of innovativeness:
The core corporate objectives of the firm are to develop a world class fleet which is
equipped enough to cater to both international as well as local market operations. Oman
Shipping Company is equally attentive towards its client’s safety, and altogether develops an
efficient and sustainable shipping service which will ensure sufficient output to the national
economy of Oman. Thus expand and sustain in the maritime industry Oman Shipping Company
acquired necessary technical management assistance from a Japanese shipping giant Mitsui OSL
Lines Ltd (MOL) (Omanship.co.om, 2019). Another very important aspect of the innovativeness
taken up by Oman Shipping Company is to reprise the Sultanate’s lost grandeur and the image of
a seafaring nation. Thus aligning with these national goals, Oman Shipping Company initiated
the process of offering beneficial annual scholarships for high school graduates to enroll them
either in Nautical Science or Marine Engineering in maritime colleges in Oman, in UK or in
Australia and on completing of their respective courses these aspirants are offered with
rewarding careers and called on board to join Oman Shipping Company Vessels. Oman Shipping
Company also works very closely with International Maritime College Oman (IMCO) and
signed an agreement in the year 2013 to support rigorous onboard training of the latter’s fresh

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graduates as well as their interns in venture to pool the national talents groom them appropriately
to help them join the shipping industry .These innovative ventures have helped the company not
only resource handful of talents and bring innovative brains in the operations of the company but
also gives a larger emphasis of community welfare objectives by training and recruiting the
young minds in useful operations. Oman shipping Company encourages sound employee
management system along with ensuring sustainable lines of product development.
Discussion:
PART 2:
Strategic Forces behind the Innovation and Experimentation:
Oman Shipping Company has made it bigger and better through its continuous expansion
and meaningful partnership. Oman Shipping Company has been successful in taking delievery of
the world’s most advanced fuel energy LNG carrier named Adam LNG. (De Martino, et al.
2013). The Chief Executive officer of Oman Shipping Company Tarik Al Junaidi believes that
this innovative measure ensures better growth and expansion of the existing potentials of the
company, and stands as a driving commitment towards constant innovation. These strategic force
are ensured through the working of external stakeholders as well as internal stake holders and is
largely affected by macro and micro environmental factors. The micro environmental factors
include the suppliers and the existing market competitors. While the suppliers enables the
company to get an easy access to the raw materials required to assembled build the fleet the
macro environment generally establishes the economic, political, social and legal forces that
greatly affects the business performance of the firm.

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Experimentation is crucial in the innovation process. It helps in realizing potential faults
early, reinforcing new knowledge, reducing costs or preventing fatal errors later.
Experimentation is vital for innovation. The systematic testing of ideas enables a company to
create and refine its products. An idea is converted to a product through the process of
experimentation. In the past it was expensive to conduct experiments iteratively. But new
technologies like computer simulation and rapid prototyping allow experiments to be carried out
faster and at a much lesser cost. Innovation and experimentation is considered as a surefire way
to achieve growth and success of the company. Successful innovative strategies definitely go
beyond the act of idea generation. Companies generally tend to strategies innovative approaches
either through closed innovation model that is where the Research and Development (R&D)
department is exclusively involved in ascertaining what could be the possible successful
strategies involved for bringing the required innovation and through open innovation strategies
which provides an externalized view regarding the prospective acquisition and partnership that
the firm can benefit from. Oman Shipping Company S.A.O.C. is a closed joint stock company,
incorporated in 2003 and owned by the Government of the Sultanate of Oman through the
Ministry of Finance (80%) and Oman Oil Company S.A.O.C. (20%). The Company is involved
in Ship Owning, Ship Chartering and Ship Management activities through its Subsidiary
Companies namely; Oman Charter Company S.A.O.C. (OCC), Oman Ship Management
Company S.A.O.C. (OSMC), and Oman Container Line (OCL) S.A.O.C. Oman Shipping
Company has a crisp and focused vision to be the ‘first choice partner in maritime
transportation’. Arising out of this corporate vision, it has dedicated itself to offering the most
optimum seaborne shipping solutions which benefit its worldwide customers. OSC also
undertakes in-house technical management of 38 vessels to the exacting international standards

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through its ship management subsidiary, including the ship management of the bareboat tonnage.
OSC has an envious record of reaching the 8 million DWT mark in its operating capacity in a
relatively short span of about 13 years and at the same time handsomely contributing to the
national economy.
Thus to analyze the strategic forces implemented by Oman Shipping Company it is
important to understand the mission and vision of the organization. Oman Shipping Company
aims to be the very first choice partner in maritime transportation and extend itself in offering
reliable, efficient and competitive shipping solutions to all its clients. The efficient managerial
team of Oman Shipping Company aims to incorporate well planned and innovative expansion
strategies through its product development strategy, expanding market share strategies, better
retention and staff management strategies or over all operation efficiency strategies. This
162,000 cubic meters capacity vessel is built in Ulsan South Korea by Hyundai Heavy Industries.
The industry experts have also extended their innovative strategies in cutting down harmful
emission through strategic development of the latest Dual Fuel Diesel Electric (DFDF)
Technology (Poulis, Poulis, and Dooley, 2013). This technological innovation does not only
support environmental concerns by ensuring lean-burn principle in its operation, but also
increases engine efficiency of the vessels by reducing peak temperatures which altogether cuts
down the Nitrogen Oxide emission. This has also equally ensured reduction in rate of fuel
consumption. Oman Shipping Company has extended itself in offering customers in-house
management through their Oman Ship Management Company (OSMC), which is a fully owned
subsidiary of the parent company. OSMC has been credited as a fundamental reason for
sustaining such a fast paced growth and development of Oman Shipping Company. Going by the
statistical records OMSC at present is entitled to manage more than 27 varied LNG carriers, LPG

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carriers, product tankers as well as many such multi-purpose vessels (Omanship.co.om, 2019).
The Tanker Management Self Assessment Program (TMSA) is another significant strategy
adopted by Oman Ship Management Company to avoid accidents and reduce risk in the overall
operation of Oman Shipping Company. Another significant strategic expansion undertaken by
Oman Shipping Company was entering into an agreement with South Korea’s Daewoo
Shipbuilding & Marine Engineering (DSME) to initiate a project of building three Very Large
Crude Carriers (VLCC) as an integral part of their fleet renewal strategy (Ennis, 2015). These
carriers are expected to help Oman Shipping Company make strategic increase in the company
oil shipping revenue by a margin of 10%. . Oman Shipping Company which is owned by
ASYAD Group through these strategic innovations and experimentations aims to become a top-
ten global logistics hub ensuring rapid and unrivalled distribution capabilities cross the Middle
East. OSC’s fleet renewal program primarily emphasizes on the company’s commitment towards
achiever hiver quality of services, enhancing the global connectivity and altogether ensuring an
industry- leading competiveness in the global market scenario. However to bring in these
strategic innovative changes the firm needs to employ the most common change management
models to bring in the necessary innovation which is known as the Lewin’s change
management model. This model involves unfreeze, make changes and then refreeze activity.
Thus initially the management of the firm makes the employees aware of what crisis or problem
the firm is facing, and tries to break the existing structure or pattern of operation. This is a very
crucial step in incorporating the new changes in the system as well as make the employees aware
of the existing problems. Then the next step is to gradually bring in the innovation as well as
maintain constant communication with the employees to ensure that the employees are very well
aware of the changes that are been incorporated by the organization and the last and final step

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includes on the part of the management to ensure that all the new innovative strategies are
employed and maintained by the firm on a regular basis so that the firm is equipped enough to
reap off the benefits of these innovative changes.
Analyzing the Internal Management structure of Oman Shipping Company:
The core potentials of an organization is only revealed when it gets maximum support
from the internal management which helps the employees understand their own strengths and
weaknesses and consecutively work on it. It has been identified that the core strength of Oman
Shipping Company is incorporated in its highly competitive team of professionals with
unmatched skills pertaining to particular fields of expertise and an unflinching support and
guidance from the Board of Directors, the executive management team. The professionals’
altogether is responsible to keep a regular check on the company’s Liquid Bulk Gas, Dry Bulk
and Liner Business, among other administrative, accounting and human resource functions.
Oman Shipping Company provides equal emphasis in investing and developing the skills and
expertise of its crew and engaging more young talents encouraging them to join the profession. It
ensures high productivity of its employees not only through highly attractive remuneration
packages but also recognizes the importance of maintain crew competency and motivation to
keep its mariners performing at the top of their game. A rewarding workplace environment
coupled with expert guidance gives the employees or aspirants rapid career advancements and
global exposure in the industry. This is the central reason why Oman Shipping Company though
being relatively young in its operation has already earned its reputation and is coined as
employer of choice among varied other shipping companies present in the market. It conducts