Resource Allocation : A Hayekian Paradigm for Maritime Conglomerates

This paper presents a synthesis between Austrian capital theory and the organizational strategy field within management studies, which applies economic theory to agent behavior in maritime business firms. Hayek's theory of production is placed within the strategy literature and used to motivate effective resource allocation decision-making within conglomerate organizations. Decision-makers respond to interest rate changes by reallocating resources among stages of production. A generic maritime conglomerate is presented as an illustration. A conceptual scheme is developed where the maritime firms engage in five stages of productive activity: (1) port facilities, (2) shipbuilding, (3) inland, coastal and ocean shipping, (4) ship leasing, and (5) overland shipping. The maritime conglomerate must attempt to adjust its allocation of capital resources across the five stages to accommodate the changing term structure of interest rates