Port Organizational
Model and Performance
Piraeus port case study
GROUP 1
Houcem Eddine CHERNI
Margaret AIDOO QUARCOOPOME
Charles NJUH YONG
OUTLINE
I.
INTRODUCTION
II.
PIRAEUS PORT ORGANIZATIONAL MODEL

PORT DESCRIPTION

KEY MILESTONES

ORGANIZATIONAL MODEL FROM SOCIO-ECONOMIC PERSPECTIVE
III.
KPIs EVOLUTION AND INFLUENTIAL FACTORS
IV.
SUITABLE ORGANIZATIONAL MODEL FOR PIRAEUS PORT
V.
CONCLUSION
Introduction

One of the important tasks of good management is organizing

To organize means building up the dual structure material and human,
of the Port organization, determine and define activities and
objectives required for increasing port performances

The formalization of patterns that show the interrelationships and
interactions between an organization’s people, tasks, responsibilities
and authority
Port description
Port business activities
Role of Governance decision in port structure
and performance
Source: Brooks and Pallis (2007)
Key Milestones
PPA structure transformations Factors (Internal, External)
1999- Corporatization
•
•
Changes in national policy: alleviate the state
budget and facilitation for Private sector to invest
Changes in national strategy: Running the port
under commercial principles
Central
Government
2003- Introduction in stock exchange
•
•
Port financial sustainability and independence
possibility of for private sector to participate
PPA SA
2008- Partial privatization
Port
operators
Port authority
Ownership
transfer
•
•
•
Financial crisis
Port Strategy reform: Separation of governance and
operations
Objectives: increase efficiency, operational costs and risks
transfer, modernize infrastructure, superstructure and port
connectivity
2016- Full Privatization
•
•
National economy: Public debt increasing, more FDI
in infrastructure and logistics
Port strategy: Maximize profit, reduce costs,
diversification of port activities
2017- New management
• New organizational structure reflecting private philosophy and vision
Structure and policy of Piraeus port
Source: Ministry of Mercantile Marine (2007)
Hierarchical, Formal and functional structure
Line relationship
Lateral relationship xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Functional relationship
Staff relationship
Socio-economic aspects
Social aspect
Economic aspect
• Focus on “work” itself
• Increased efficiency
• Division of work and specialization
• Focus on maximizing output
• Worker efficiency and productivity
• Stress methodology of task performance
• Separation of planning from execution
Advantages
(No union rules)
• Extensive training re job responsibilities
• Quality infrastructure
• Single boss = Unity of command
• Enhance country’s economy
competitiveness
• Increasing in Tax income (from 3.32M€ in
2008 to 12.16M€ in 2019)
Reductions in salary and social benefits
(from $181,000/yr to $23,300)
• Reduction in number of employees (4
people to operate a gantry crane instead
of 9)
• Focus on worker efficiency and
productivity and limit focus on human
relations
• Massive reduction of state income in long
• Focus on interaction between managers
and
employees in a mechanistic way
• contemporary bureaucracy
• Luck of employee motivations and
incentives
• No focus on people within the
organization and
their social needs, motivation and
behavior
• Not build on social cohesion for
productive ends
• Risk of speculation with port land
•
Disadvantages
term (privatization)
• Loss of jobs
• Strategic assets become out of control
• Public interests Unguarded
• No future cash flows for the public sector
KPIs EVOLUTION AND INFLUENTIAL FACTORS
The container
throughput
430,000
Indirect job
creation
5.65
More than 8000
million
TEUs in 2019
TEUs in 2008
Direct job creation
93rd
at the
beginning of
the merger
33rd
700 M€
in 2018
European and
Mediterranean
ranking
The overall profit
8.91M€
47.61 M€
In 2008
In 2019
The direct economic
contribution to the
local area
More than 2600
The global
ranking
17th
In Europe in 2007
4th
in 2019
3rd
1st
In Med. In
2013
In 2019
(containers+passangers)
Source: port Economics.Eu
Container Throughput (2007-2019 in million TEUs)
6,00
5,65
120
100
95,35
4,91
5,00
80
4,15
62,50
53,49
4,00
3,59
3,16
30,30
2,73
3,00
15,75
60
3,66
3,36
40
13,61
8,93
13,39
20
18,31
15,07
0
-6,41
2,00
1,68
-20
1,37
1,00
0,43
0,66
-40
0,86
-60
-68,61
0,00
Container Throughput
% increase
2007
1,37
0
2008
0,43
-68,61
2009
0,66
53,49
2010
0,86
30,30
2011
1,68
95,35
2012
2,73
62,50
Container Throughput
2013
3,16
15,75
2014
3,59
13,61
% increase
2015
3,36
-6,41
2016
3,66
8,93
2017
4,15
13,39
2018
4,91
18,31
2019
5,65
15,07
-80
Car Terminal Throughput
50
700 000
40
37,57
600 000
30
20
18,81
500 000
9,81
9,84
10
6,01
400 000
-5,08
-5,92
-10,36
300 000
0
-0,19
-2,20
-19,84
-10
-20
200 000
-30
-40
100 000
-50
-50,21
0
Car
% increase
2007
619 400
2008
555 245
2009
276 470
2010
380 346
2011
417 659
2012
458 755
2013
448 682
2014
359 665
2015
341 386
2016
361 912
2017
430 000
2018
429 170
2019
403 757
0
-10,36
-50,21
37,57
9,81
9,84
-2,20
-19,84
-5,08
6,01
18,81
-0,19
-5,92
Car
% increase
Линейная (Car )
-60
Passengers Numbers (millions)
25 000 000
8
6,20 6
20 000 000
4
3,39
2,14
2
15 000 000
-0,12
-0,80
0,00
-0,13
0
-2
-2,44
10 000 000
-4,09
-5,18
-6,58
5 000 000
-4
-6
-8
-10
-10,86
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Passengers 21 522 9 21 984 0 21 446 9 20 336 4 20 173 5 17 983 6 16 800 0 16 780 0 16 780 0 16 094 0 16 640 0 16 619 0 17 649 1
% increase
0
2,14
-2,44
-5,18
-0,80 -10,86 -6,58
-0,12
0,00
-4,09
3,39
-0,13
6,20
Passengers
% increase
Линейная (Passengers)
-12
Number of Employee
1 800
1 600
1 671
1 649
1 400
1 396
1 324
1 206
1 200
1 180
1 157
1 129
1 092
1 000
1 025
1 016
998
2017
2018
2019
800
600
400
200
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
INCOMES (Millions €)
200
150
100
50
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
-50
After tax profit
Pre-tax Profit
Revenue
2018
2019
500%
Ratio Figures
411%
400%
389%
351%
326%
300%
275%
322%
313%
270%
256%
203%
200%
156%
100%
95%
26%
108%
29%
0%
62%
61%
23%
27%
57%
54%
52%
20%
24%
21%
46%
24%
42%
24%
37%
31%
43%
30%
45%
24%
-100%
Current assets/current liabilities
-150%
-200%
Current assets/current liabilities
Borrowings/Total Equity
EBITDA/Revenue
2008
156%
26%
95%
2009
108%
29%
-150%
2010
275%
62%
23%
2011
256%
61%
27%
2012
326%
57%
20%
2013
351%
54%
24%
Borrowings/Total Equity
2014
411%
52%
21%
2015
389%
46%
24%
2016
313%
42%
24%
EBITDA/Revenue
2017
270%
37%
31%
2018
203%
30%
43%
2019
322%
24%
45%
Factors affecting KPI’s

Investments in equipment and infrastructure

Railway link to the Port of Piraeus

Increased co-operation through alliances (shipping line alliances)

Logistics platform
Actions taken after privatization

Internal Organization restructuring

Speed and efficiency in decision making process

Better coordination

Functionality and flexibility

Optimal use of human resources

Cost savings



Continuous improvement of port services provided to the port
users at international level scope
Health and Safety culture
Evolution of employees
• Outward looking strategies

International partnerships- MoU with Shanghai International Port
Group- Port studies, staff training, information exchange

Collectivity in decision making
Distinction of responsibilities
 Responsibility-accountability-liability
 Good Governance
 Audit- Transparency


Internal Operation Regulation
General Staff regulation
 Internal audit Committee operation regulation
 Other regulations- Tender and procurement, cash management, Corporate IT
resources, Contract payment, donation and sponsorship, monthly financial
reporting

Brief definition

A system that outlines how certain activities are directed to achieve goals,

These activities include rules, roles and responsibilities,

The organizational structure also determines how information flows between levels
within the company.
Bases of organisational structure
Piraeus port actual organizations structure is founded on the basis of:

Functions

Product types / market coverage

Customer type
Three basic organizational model (structure)
Functional – Divisional - Matrix
1. Functional (PPA actual structure)
Strengths
weaknesses
• Bureaucracy in coordination
• Good supervision
• Conflict between functions
• Efficient for stable functions and environment
• Difficult to create motivation and innovation
• Specialization of human resources
• During growth periods, issues tend to
accumulate at the top
• Easier to control by senior management
• Decision making is hampered by the fact that
only top management sees the big picture.
2. Divisional (PPA former structure)
Strengths
weaknesses
• Good customer contacts
• Enables different leadership for different functions and
context
• Top management is free to focus on strategy
• Competition in results between divisions (if any) may
enhance Performance
• Excellent training ground for developing future
managers (generalists)
• Creating synergy difficult at organizational
levels
• Loss of control by top management
Internal competition (e.g. funds/resources for
investment)
3. Matrix structure
Strengths
weaknesses
• Flexible and adaptable
• Conflict with respect to timing and resources
• Effectively use specialization without losing sight of the
whole
• Power struggles
• Reduces organizational differences between
established and project activities
• Disturbs traditional power structures.
• Problem of two supervisors
Suitable organizational model for PPA

While the port KPIs are in constant growth, the actual structure could be the best for PPA especially
comparing with former structure. However, other factors might be the drivers of this development.

To ensure the sustainability of PPA a contemporary style of management have to be considered
especially in social perspective.
Contemporary Trends for PPA Management
 Shift from hierarchical and autocratic formats
to flatter organizational structures,
flexible working and heightened employee
involvement
 Shifting employee expectations
 Values-based management
 Ethics and social corporate responsibility
 Diversity management
 Move toward total quality
management
www.forbes.com/sites/jacobmorgan/
Conclusion

The dissimilar nature of ports makes it difficult for a particular organizational
structure or model to be the standard of evaluating port performance.

The SWOT and PESTEL analysis can be used to support the justification of a
given adopted organizational model by a port.
References
Brooks, M., & Pallis, A. A. (2007). Linking port performance and post-devolution port governance models.
Paper presented at the Proceedings of International Association of Maritime Economists (IAME)
Annual Conference, Athens, Greece, 4.
Kontsas, D. S. (2016). An economic analysis model of the effects of privatization of piraeus port aythority
into the greek economy. International Journal of Scientific Research and
Management, doi:10.18535/ijsrm/v4i11.07
Michael Ekow Manuel. (2019). The nature of management. Unpublished manuscript. [power point slides]
Murphy, J., Willmott, H., & Daft, R. (2017). Organisation theory and design. Andover: Cengage.
Retrieved from https://ebookcentral.proquest.com/lib/[SITE_ID
Piraeus Port Authority. (2007). Port statistics. (). Greece: Retrieved from http://www.olp.gr/en/stats (from
2007 till 2013)
Piraeus Port Authority, S. A. (2019). Annual financial report. (). Greece: Retrieved
from http://www.olp.gr/en/investor-information/annual-reports?limitstart=0. (from 2007 till 2019)