Chapter 4: Non-linear management: application to managing ships

Pages Contents
71 - 99This chapter presents the essentials of 'linear' and 'non-linear' management. Taylor (1911) and Fayol (1916) established linear management. The non-linear theory was led by Wheatley (1999). In the methodology section, the basic tools of non-linear management are described. These are the diagrammatic focus on 'change', the 'phase space', the 'limit cycle' and the 'attractor'. Other concepts dealt with are the 'attractor's basin of attraction', as well as 'fitness peak and landscape', the 'possibility and search space' and the 'global maximum' for companies. The chapter then illustrates these points with a case-study of a large Greek shipping company transporting petroleum products (product carriers, for 1988–2000) to develop the concepts of limit cycle and attractor. This case study is used to derive some recommendations of good practice in company's management. The paper then presents a calculation of the limit cycle of the spot and derivative price markets, providing some interesting results. In addition, the problem solving method, called the 'propeller method', is presented. This method is applied by a large Greek bulk shipping company. The paper concludes with a discussion of strategic decision-making, examining the relative merits of linear and non-linear models, and suggestions are made that might improve strategic development in a hypothetical shipping company, relating to the type of bulk ship that should be ordered. This analysis involved the construction of four limit cycles, using a forecasting model and finally reference to the theory of shipping cycles is made.

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