Shipping market environment affects the financial strategy of shipping corporation. As the shipping corporations in the stable shipping market environment have less effect from that environment and take their own financing activities for their growth and development, we could assume that they will have higher financial stability. However, on the other hands, the shipping corporations in the rapidly changing shipping market environment should have various and complex financial strategies, which will cause unstability in financial condition.
The market environment and financial stability of shipping corporation affects the human resource management as well. If the financial position of shipping corporation is stable during the boom period, the corporation would tend to expand its investment to human resource for its own growth. On the contrary to this, the shipping corporation suffering from depression would cut down the budget and dismiss its staff to survive.
This case study has relevance to three existing and outstanding ocean-going shipping companies in Korea. These companies have been illustrating the contrast among the shipping market, the financial stability and the human resource management.
Firstly, 'K' shipping corporation concentrating on container liner service in Korea, Japan, China and Southeast Asia in which the environmental uncertainty is relatively less than world-wide routes has increased its competitiveness and the market share. 'K' line has achieved net profit for 26 years and kept stable financial conditions. With stable financial statement, it expended large numbers of vessels over the 1990s when depression in Korea was on the rise. By the middle of 2000 when Korea was economically recovered, the company maximized its profit. In addition, 'K' line valued human resource in their priority and maintained their stable hire rate.
Secondly, the market environment of 'H' shipping corporation which has the world-wide container liner and bulk tramp service is highly uncertain with various effect and dynamic changes. Its financial stability is poor from high debt and low liquidity according to adapting to the market environmental effect. However, after crisis of IMF, the company improved its financial stability through painful restructuring. The human resource management strategy of 'H' line is to enhance the efficiency of human resources and to develop shipping experts with global competitiveness in order to respond to its environmental changes quickly and efficiently.
Thirdly, 'S' corporation which has concentrated its main business in bulk tramp service exposed to high risky and uncertain shipping market environment. It showed extremely contrary profit result during booming or depression period. 'S' corporation had stable financial position in the beginning period of M&A with S Group due to investment fund from parent company and public offering stocks. In those days the index of financial stability such as the debt and liquidity ratio was good. However, due to long term depression on the market in late 2000s, average profit has slowly decreased and the loss eventually came up after the global financial crisis in 2008. 'S' corporation has emphasized the human resource development to improve the adaptability to complex and uncertain world-wide tramp market circumstances and showed the effective utilization of human resources and high flexibility in the employment.