report sample for students

HAMDARD UNIVERSITY , CITY CAMPUS

Hamdard Institute of Management Sciences

INDUSTRY RESEARCH REPORT

PAKISTAN NATIONAL SHIPPING

CORPORATIONSubmitted to: Prof. Col. ( R ) M WALI DURRANI

Course Director

Business Policy and Strategic Management

By: CDR ( R ) AZHAR NISAR

MBA (EXEC)-I MEX-197007

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25 December, 1999

LETTER OF TRANSMITTAL

PROF. COL ( R ) M WALI DURRANI

Chief Executive Officer HIMS (City Campus)

Course Director (Bus. Policy & Strategic Management)

Sir,

Research report on “Pakistan National Shipping Corporation” has been prepared as part of the “Business Policy and Strategic Management” course requirement. Endeavor has been made to make this report as comprehensive as possible, keeping in view the time constraints and limitations of the study. However, main focus has been on the environment in which PNSC is operating and the strategy adopted to achieve the objective.

It is hoped that any deficiencies observed in this study would be viewed with due leverage for inexperience on the part of researcher in carrying out study of such a nature where it is difficult to obtain primary data, more so when operations are bound to receive impact from the global environments.

AZHAR NISAR CDR (Retd.) PN

MBA (EXEC)-I

25 DEC 99

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Director’s Comments

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EXECUTIVE SUMMARY

1. In 1947 Pakistan inherited a fleet of four privately owned cargo ships. In 1963, National Shipping Corporation (NSC) was established which procured its first used

2. The national fleet’s strength grew to a record 71 vessels just prior to the separation of East Pakistan in 1971. The fleet strength declined to 57 vessels after the separation. In 1974, 9 private shipping companies, which had a total of 26 ships

3. In 1977, 14 ships were inducted in the Pakistan Shipping Corporation (PSC) during the 5th five year plan. Two years later, NSC and PSC were merged to form the Pakistan National

4. Today the PNSC is lifting less than 5% of the national seaborne cargo on the vessels which have long run their economic

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PREFACE

1. Being a sophomore of Business Management, I always wondered, how the entrepreneurs and top echelons of large business organizations take strategic decisions and that too far reaching and effective. Relating to my previous knowledge of naval/military strategy, --------------

2. Pakistan National Shipping Corporation is in the state of a dilemma for quite sometime. I thought to carry out a small study of current situation in PNSC in the context of “Business Policy and Strategic Management” and try to find out some area where we are lacking in achieving our national objectives. I have tried -----------

3. Needless to mention here that no new policy will improve situation without correct national bias and political will to achieve the desired goals. Hence, these two factors ---------------

AZHAR NISAR

Commander (Retd.) PN

MBA (EXEC)-I

HIMS (CITY CAMPUS)

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ACKNOWLEDGEMENTS

In preparation of this research report, I am indebted to the high

officials of PNSC, senior Captains of Merchant Marines and senior retired

officers of Pakistan Navy for their valuable information, with out which it

would have not been possible for me to complete this study.

I am also thankful to Mr. M Yousuf Bin Azhar and Mr. M. Saad Bin

Azhar who despite their academic commitments helped me in typing this

report.

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RESUME OF AUTHOR

Name:

Father’s Name:

Date of Birth: 1

Address:

Position:

Current job: MANAGER (MARINE SERVICES)

Academic Qualification (In reverse chronological order):

Education Year Institution CGPA/Div./Grade

Specialization: 1. Human Resource Management (MBA)

2. Marine Engineer Specialist3. First Class Marine Engineer Certificate

Work Experience (1975 – 1998) (In reverse chronological order):

Period Organization Designation

Projects/Term Papers/Reports:

Achievements/Awards:

Co-curricular Activities & Skills:

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TABLE OF CONTENTS

Letter Of Transmittal ii

Executive Summary vPreface viii

Acknowledgments ix

Resume of Author x

List of Tables xiii

List of Appendices xiii

CHAPTER – I AIMS AND OBJECTIVES OF THE STUDY 1

CHAPTER – II IMPORTANCE OF SHIPPING

AND SEABORNE TRADE 2

CHAPTER – III HISTORY OF SHIPPING DEVELOPMENT

IN PAKISTAN 4

CHAPTER – IV LIMITATIONS OF THE STUDY 5

CHAPTER – V APPROACHES TO THE STUDY 6

CHAPTER – VI METHODOLOGY 7

CHAPTER – VII SHIPPING POLICY DEVELOPMENT 10

CHAPTER – VIII INTERNATIONAL SHIPPING ENVIRONMENT13

CHAPTER – IX COMPETITIVENESS OF NATIONAL FLEET17

CHAPTER – X POSITION OF PNSC 19

CHAPTER – XI CONCLUSIONS 25

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CHAPTER – XII RECOMMENDATIONS 27

REFERENCE MATTER 28

BIBLIOGRAPHY 28

APPENDICES I - XIII

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LIST OF TABLES

T-1 Competitiveness of National Fleet of selected countries

T-2 Prioritization of Policy objectives by selected countries

LIST OF APPENDICES

I. Major Imports & Exports by value.

II. Composition of respondents

III. Interview Schedule

IV. Relationship between seaborne trade and world fleet

V. No. of voyages (PNSC 1994-1998)

VI. Cargo handled (PNSC 1994-1998)

VII. Sector wise cargo lifting (PNSC 1994-1998)

VIII. Freight revenue (PNSC 1994-1998)

IX. Operating expenses (PNSC 1994-1998)

X. Percentage of operating expenses (PNSC 1994-1998)

XI. PNSC fleet – 30 June 1998

XII. National Trade

XIII. Operating profit /(Loss) (PNSC 1994-1998)

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CHAPTER – I

AIMS AND OBJECTIVES OF THE STUDY

Aims1. The aims in carrying out the exercise of this research are:

a. To study the International and National environments in which Pakistan National Shipping Corporation is operating.

b. To suggest the National Strategy for PNSC to generate higher rate of returns and make the declining cargo business profitable.

Objectives

2. The objectives of this report are:a. To fulfill the course requirement of “Industry Research Report” and understand the concept and mechanics of carrying out a research involving policy making and strategic decision making.

b. To know how data is collected, interpreted and how conclusions are drawn using logic, reasoning and unbiased approach.

c. To form the basis for further study and research in the subject area.

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CHAPTER – II

IMPORTANCE OF SHIPPING AND SEABORNE TRADE

1. Ports and shipping is a service which serves the trade of the country and since the other end of a trade route is a foreign country in the international commerce, a well developed shipping sector is capable of serving the third country traders as well. Both these roles are important economically. Ports provide the sea-shore interface for the ships, both foreign and national, enabling the country’s trade to move in and out.

2. The other significance of the sector lies in employment prospects. Traditionally this area has been providing seafarers to international shipping for some 150 years when ships under its own flag were non-existent. Hardy Pathans from the northern mountains of Pakistan and the Kutchies and Balochs from the coastal region have been going to sea in British, German and other ships. Later with better education, officers and engineers also found employment abroad.

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CHAPTER - IV

LIMITATIONS OF THE STUDY

1. It would be appropriate to describe the limitations of the study at this stage. An explicit statement of this kind would give important datum to the reader and also protect me, the researcher, from own indiscretion. The limitations of this research study are mentioned below:

a. Secondary data available is only up till annual report 1997-98.

b. Due to the limitations imposed by time, sample size

has been restricted to 12 respondents only.

c. Due to the nature and sensitivity of some information, the source has not been disclosed, rather the statements have been generalized to maintain the anonymity.

d. Since the nature of the study involves strategy formulation and policy making, only those who have long experience in the field and have been involved in planning and operation of the shipping organizations were included in the sample.

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CHAPTER - V

APPROACHES TO THE STUDY

Possible Methods of Approach

1. Due to the considerations mentioned in the previous chapter, following alternatives to approach to the research are possible.

a. Study might have been made through interview scheduled and thus recording the point of view of the officials, employees and seafarers who are attached with PNSC and shipping industry in any manner.

b. Another alternate would be to solely depend on the secondary data available on national shipping and trade through sea route.

c. Combination of both “a” and “b”.

Selected Approach

It was decided to select the approach “c” mentioned above for the following reasons:

a. Secondary data is of historical importance and can be made a good basis for drawing inferences and pin pointing previous short comings. This

b. The possible effects of global environmental changes are best understood and interpreted by the professionals, experts, researchers, officials and entrepreneurs in the field. This information can be gathered by interviewing such people who are able to provide knowledge about some.

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CHAPTER VIMETHODOLOGY

1. The purpose here is to describe the research procedure, overall research design, the sampling procedure, the data collection and analysis procedure.

Research Procedure

2. Some historical data is available in the form of annual reports, policy guidelines, professional magazines and research reports. However, the subject, being of strategic nature, required the descriptive or exploratory research to search the effects of the existing policies and its implications.Formulation of Hypothesis

3. As the research is exploratory , no formal hypothesis have been formed or tested in this study.Exploratory Research

4. Maximum possible information and knowledge can be gathered through an exploratory research. This can be achieved by the use of

a. Rules, Regulations and Govt. Policies.b. Professional magazines /Periodicals/Newspapersc. Personal Interviewsd. Questionnairee. Seminars/discussions/workshops

Sampling

5. Cost is one main factor which prohibits in studying the entire population. Therefore a subset from the population must be used to make inferences about the same population.

a. Universe: In this study the universe is limited to top officials of PNSC, Ports & shipping at other personnel related to administration, Planning and maintenance of ships of PNSC, professional seafarers

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of mercantile marine and those who have the access and participation in policy making.

a. Sample: A sample is a subset or an incomplete set taken from a complete set of objects. Sample has to be

representative of the population or universe it is drawn from.

b. Sample Size: A sample size of 12 respondents was considered to be appropriate. The distribution of respondents by major occupation groups is given at Appendix–II.

c. Sampling Technique: In this study non-probabilistic sampling was carried out which is termed as “ Trade-off between

cost & time and precision”. The “researcher cannot calculate the bias

involved. That is why statisticians usually avoid non-probabilistic

sampling design4 In this study convenience sampling and snowballing

was resorted to because of time constraints and restricted response

of the respondents due to their business and official commitments.

Research Tools

6. Since the selection of research tool should reflect the purpose of the

research/survey and the resources available for it, thus in this study

‘interview’ was used as the main tool.

a. Interview: It puts the interviewer and the respondent into a dialogue situation. This advantage is not possible in a

questionnaire due to the structured questions in the later form. This

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gave the advantage of asking personally administered and reworded

questions from the respondents to obtain some extra information. It

also provided the advantage of reducing the number of inaccurate,

irrelevant and incomplete answers. The interviews were conducted in

two ways.

i. Personal Interviews

ii. Telephonic Interviews

Interview Schedule: The questions asked from the respondents were as given at Appendix-III. However, as a result of the dialogue situation many other information were also explored which eventually became useful in the study.

Field Work

7. The interviews were conducted between 5 Oct to 8 Dec 99 and mostly during evenings when the respondents had some relaxed time from their hectic official commitments.

Organization of Data

8. Research design, sample design and field work are under taken solely to obtain the data, which when tabulated and analyzed will yield desired information to draw inferences, conclusions, recommendations and decisions. The frame work for the tabulation and analysis of data was established through following steps:

a. Interview schedule was prepared to obtain desired information from the respondents. The questions were designed in a manner that candid opinions and professional experience of the respondents would be the natural outcome.

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b. Policy documents and historical data to examine the past and present environments.

c. Periodicals, magazines and official reports and seminar reports to gather latest tabulated data.

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CHAPTER - XI

CONCLUSIONS

1. Years of neglect, absence of long term policies and the non-implementation of the ones which were ever devised, have taken a heavy toll on the local shipping. No fresh tonnage has been inducted in the PNSC during the last two decades with the result that today its fleet comprises of vessels which are an average 18 years old costing it more and more money in repairs and maintenance to keep them running.

2. In addition, the imposition of stricter maritime security codes possess a major challenge for the

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CHAPTER – XII

RECOMMENDATIONS

1. There is a need to address the issues mentioned in conclusions chapter while developing and formulating the shipping policy. However, it must be kept in mind that shipping policies cannot be developed in isolation. The prudence demands that the policies developed by the Ministry in-charge of shipping is accepted by other ministries, by the cabinet of ministers and eventually by the shipping industry. Compatibility with national economic plans, budgetary questions, territorial issues with other ministries, have to be resolved with persistence and patience.

2. Development and formulation of the policy is just not the end. It is recommended that utmost importance be allocated implementation strategy. Implementation of shipping policy7 however, requires administrative

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REFERENCE MATTER

BIBLIOGRAPHY

1. PNSC, REPORT AND ACCOUNTS, FOR THE YEAR ENDED 30 JUNE 1998.

2. PNSC OFFICIAL ANNOUNCEMENT, DAWN 22 DECEMBER 1999, PAGE 20.

3. MARINER VOLUME 10, ISSUE 3, PAGE 24

4. GOLNAVAZ B. HORMOZ DYARAN,

“CONSUMER PREFERENCES FOR MILK PAK” (Research report IBA (Kar) – 1983) – P-18.

5. ESCAP WORKSHOP DOCUMENT JUNE 1999, CHAPTER 4, PAGE 1.

6. PAKISTAN-ESCAP COUNTRY LEVEL WORKSHOP, PAGE E29.

7. ESCAP WORKSHOP DOCUMENT JUNE 1999, CHAPTER 5, PAGE 7.

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APPENDIX – I

MAJOR IMPORTS AND EXPORTS BY VALUE

Total Annual Imports $ 10.07 billion

Total Annual Exports $ 8.67 billion

Trade Deficit $ 1.40 billion

Major Imports by Value 1997- 98 $ m

Crude & Petroleum Products 1558

Power plants & Elec. Machinery 763

Edible oils 769

Wheat 699

Iron & Steel 319

4108

Major Exports by value 1997- 98 $ m

Cotton Based products 4701

Synthetic Textiles 621

Rice 570

Leather & Products 551

Sports Goods 385

Carpets 202

Fish & Fish preparations 171

7201

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(Source: DG Ports and Shipping office)

APPENDIX – II

COMPOSITION OF RESPONDENTS

1. PNSC - 4

2. Merchant Mariners - 4

3. Bahria Foundation - 2

4. Retired Officials - 2

__________

Total: 12

APPENDIX – III

RESEARCH REPORT ON PNSC (INTERVIEW SCHEDULE)

Dear Sir,

1. I am carrying out a research on Shipping Industry as part of my MBA (Executive) Programme through HAMDARD UNIVERSITY (CITY CAMPUS). This research is part of the course curriculum of “Strategic Management and Business Policy”.

2. The purpose of the research is to suggest and formulate a strategy to generate higher level of revenues and make the already declining cargo business profitable.

3. I would request you to please provide me few minutes from your busy schedule in giving reply to the interview schedule attached with this study.

Thank you in anticipation

AZHAR NISAR CDR (RETD) PN

MBA(Exec-I) CLASS

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HAMDARD UNIVERSITY (C.C)

INTERVIEW SCHEDULE

Q1. How do you foresee, with present fleet of PNSC, Is Pakistan in a position to expand its trade to earn a reasonable profit and recover its previous losses?

Q2. What strategy would you suggest to raise the revenues of PNSC?

Q3. How do you weigh the material state of present PNSC fleet? Does it need massive funds to modernize or replace the existing fleet.

Q4. In case the “Right of First Refusal with Preference to the PNSC to lift the national cargo” is reinstated, in your opinion in what percentage the profitability is likely to improve.

Q5. The lack of interest of local investors is seen in shipping industry. In your opinion what are the main reasons of this discouragement.

Q6. Do you suggest any legislation to raise the confidence level of investors in shipping industry?

Q7. In your opinion, is shipping really has the status of an industry? Do you feel that any industry status given to shipping through legislation could help improve raising revenues and cargo lifting orders?

Q8. What is your strategic vision, for having modern merchant marine fleet of optimum size which could protect national interest for next 50 years.

Q9. The shipping policy-1998, proposed but not yet issued by Govt., for next 5 years contains good incentives and targets for achievement: such as no restriction on private investment, raising fleet of 50 ships, increase of seamen employment, increase of freight earning capacity and preference to flag carrier for transportation and cargo etc. Do you feel in real scenario this

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policy could be implemented effectively with out resistance from various national and international interested groups.

Q10. In your opinion what steps are necessary to create positive effects on investment, revenue generation, cargo lifting and shedding of debts of PNSC.

Q11. Any other comments / suggestion you would like to give with regard to improvement in the PNSC affairs.

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APPENDIX VII

1994 1995 1996 1997 1998

1.775

3.61

4.809 4.754

2.122

0.184

0.206

0.199 0.167

0.1160.37

0.357

0.4290.367

0.2660.640000000000002

0.886000000000001

0.7990.694000000000001

0.773000000000001

SECTOR WISE CARGO LIFTINGMILLION F.R.T. TONS

Asia

Europe

America

Dry Bulk

2.969

5.059

6.2365.982

3.277

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APPENDIX - VIII

1994 1995 1996 1997 19980

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

3,302

5,160

6,962

7,762

4,597

FREIGHT REVENUE (Rs. IN MILLION)

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APPENDIX – XI PAKISTAN NATIONAL SHIPPING CORPORATION

FLEET AS ON JUNE 30, 1998

S.No. Vessel Name Year Dead G.R.T N.R.TOf WeightBuilt in Tons

1 m.v. Lalazar 1985 13,346 10,246 4,664

2 m.v. Swat 1983 14,355 10,917 5,758

3 m.v. Shalamar 1983 14,170 10,544 5,643

4 m.v. Islamabad 1983 18,257 12,395 6,747

5 m.v. Khairpur 1981 16,414 13,402 7,693

6 m.v. Sibi 1981 16,436 13,402 7,693

7 m.v. Kaghan 1981 18,050 12,030 6,686

8 m.v. Ayubia 1981 18,050 12,395 6,686

9 m.v. Sargodha 1980 18,242 12,395 6,747

10 m.v. Malakand 1980 18,224 12,395 6,747

11 m.v. Multan 1980 18,257 12,395 6,747

12 m.v. Bolan 1980 18,144 12,395 6,747

13 m.v. Hyderabad 1980 18,257 12,395 6,747

14 m.v. Chitral 1980 18,144 12,395 6,747

15 m.v. Makran 1979 23,490 16,199 8,184

TOTAL 261,836 185,900 100,236

Source: Annual Report PNSC (1998)

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APPENDIX - XII

NATIONAL TRADE

Million tons

Total imports (Dry) 3.595

Total exports (Dry) 4.892

Total imports (Liquid) 17.777

Total Exports (Liquid) 1.814

Total Import and Export 37.478

Share of PNSC in total trade (18.8 %) 7.038

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report sample for students

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national seaborne cargo

context of business

policy strategic managementsir

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separation of east pakistan

strategic decisions