By Wenrui MA
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An Examination of the Application of Power Theory in the Context of the Chinese Seaport Sector by Wenrui MA A Thesis Submitted in Fulfilment of the Requirements for the Degree of Doctor of Philosophy of Cardiff University Logistics and Operations Management Section of Cardiff Business School, Cardiff University December 2016 DECLARATION This work has not been submitted in substance for any other degree or award at this or any other university or place of learning, nor is being submitted concurrently in candidature for any degree or other award. Signed ……… ………………… (candidate) Date …………14/03/2017……… STATEMENT 1 This thesis is being submitted in partial fulfilment of the requirements for the degree of PhD Signed ……… ………………………… (candidate) Date ………14/03/2017…… STATEMENT 2 This thesis is the result of my own independent work/investigation, except where otherwise stated. Other sources are acknowledged by explicit references. The views expressed are my own. Signed ………… ……………………… (candidate) Date …………14/03/2017… STATEMENT 3 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations. Signed …………… …………………… (candidate) Date …………14/03/2017… STATEMENT 4: PREVIOUSLY APPROVED BAR ON ACCESS I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loans after expiry of a bar on access previously approved by the Academic Standards & Quality Committee. Signed …………… …………………… (candidate) Date ……14/03/2017……… i Abstract Power is an essential attribute of all social systems. Nonetheless, the study of this topic has been greatly overlooked in the context of the maritime component of international supply chain management. This study aims to contribute to addressing this shortfall by examining how the concept of power can be understood between two key maritime actors – the port/terminal operator and the liner shipping company. Four specific research topics have been created based on the key dimensions of the concept of power: power source, power pattern, power strategy, and power exercise. These topics relate, respectively, to the origin of power, the balance/imbalance of power, strategies to improve power, and the use of power. Investigation into the vested power issues relies on the dependence discourse and power-bases discourse of the concept of power. These have been analysed through the lenses of Resource Dependence Theory (RDT) and Social Exchange Theory (SET). Four Chinese hub seaports are used as the setting for this study (i.e. Xiamen Port, Shanghai Port, Qingdao Port and Ningbo Port). A qualitative case study strategy is deployed using data gathered mainly from 39 semi-structured interviews with leading players from both groups of maritime actors. The data were analysed using template analysis. Research findings reveal that case port/terminal operators implement a number of tactics to improve power in relation to liners. The sources of these two maritime actors’ power are identified at three levels: organisational, dyadic relationship, and supply chain network. Whereas case port/terminal operators and liner operators are found to be highly interdependent, the former party generally takes a more powerful position. Under this power pattern, the port terminal operators have used their reward power, legitimate power and coercive power to exercise control in the dyad. This study is the first to systematically investigate power issues in the maritime industry. The research centres on the Chinese hub seaports incorporating port governance and guanxi contextual issues. It extends the understanding of the concept of power and contributes to the knowledge of port/terminal operators’ business practices and relationships with liners. The overall outcome of this study is the creation of a theoretical framework to understand the basic functioning mechanisms of inter-organisational power. This study validates the RDT approach to examine power strategies in the inter-organisational dyads exploring the patterns and sources of power involved. It also contributes to SET by investigating the explanatory power of this theory for the patterns of power exercise. ii Acknowledgements I would like to thank my supervisors, Dr Stephen Pettit, Dr Robert Mason and Dr Jane Haider, for their valuable feedback, encouragement, and continuous support during my PhD journey. Secondly, special thanks go to all the participants of this research. Without them, it would have been impossible to conduct this research. Finally, this thesis is dedicated to my parents for their unconditional and endless love. iii Table of Contents DECLARATION ........................................................................................................... i Abstract ......................................................................................................................... ii Acknowledgements .................................................................................................... iii Table of Contents ........................................................................................................ iv List of Figures .............................................................................................................. xi List of Tables ............................................................................................................... xii List of Abbreviations ................................................................................................. xiv Chapter 1 Introduction................................................................................................ 1 1.1 Chapter Overview ............................................................................................. 1 1.2 Background ....................................................................................................... 1 1.2.1 Market Features of the Maritime Industry .............................................. 1 1.2.2 Power Issues in the Maritime Industry ................................................... 3 1.3 General Research Question and Research Context ........................................... 4 1.4 Key Concepts and Sub-research Questions ...................................................... 6 1.4.1 Key Concepts and Terminologies ........................................................... 6 1.4.1.1 Maritime and Supply Chain Terms ............................................... 6 1.4.1.2 Power-related Concepts ................................................................ 7 1.4.2 Sub-research Questions ........................................................................... 9 1.5 Structure of this Thesis ................................................................................... 10 1.6 Summary ......................................................................................................... 12 Chapter 2 The Market Environment of the Maritime Industry ........................... 13 2.1 Chapter Overview ........................................................................................... 13 2.2 Seaports in Supply Chains .............................................................................. 14 2.2.1 Distribution Networks and Ports ........................................................... 14 2.2.2 Ports as a Research Topic in Supply Chains ......................................... 15 2.2.3 Inter-organisational Relations in Port Communities ............................. 17 2.3 Port Development and Its Changing Role ...................................................... 19 2.3.1 Spatial Development Approach ............................................................ 19 2.3.2 Functional Development Approach ...................................................... 20 2.3.3 Comprehensive Approach ..................................................................... 21 2.3.4 Rising Status of Seaports in Supply Chains .......................................... 22 2.4 Ports in a Competitive Environment ............................................................... 23 2.4.1 Globalisation, Containerisation and Intermodalism ............................. 24 2.4.2 Existence of Strong Buyers? ................................................................. 25 iv 2.4.2.1 Use of Large Ships and Increasing Concentration of the Liner Market ..................................................................................................... 26 2.4.2.2 Cooperation among Carriers ....................................................... 27 2.4.2.3 Vertical Integration of Liner Operators in the Logistics Chain .. 28 2.5 Port Cooperation and the Emergence of Global Terminal Operators ............. 30 2.5.1 Port Cooperation ................................................................................... 30 2.5.2 Development of Terminal Operators ..................................................... 31 2.6 Port Governance.............................................................................................. 32 2.6.1 The Wide Concept of Governance ........................................................ 33 2.6.2 Port Governance and Changing Seaports ............................................. 36 2.6.3 Governance and Power ......................................................................... 40 2.7 Summary ......................................................................................................... 41 Chapter 3 The Theory of Power