Ransom on the High Seas: The Case of Piracy in Somalia

Authors: Cuervo-Cazurra, Alvaro; Train, Michael; McNett, Jeanne
Source: Richard Ivey School of Business
Year: 2011
Number of pages: 9

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Abstract:

The setting of this case is off the coast of the failed state of Somalia, where incidents of piracy have increased dramatically over the past few years. In this case a group of 14 pirates have hijacked a cargo ship full of machinery, but have yet to make any demands. They hold the multinational crew of 20 (whose captain and two officers are American), the ship, and the cargo hostage. The Chief Operating Officer of an international shipping company must choose among alternative strategies to get the crew, cargo and ship, back safely with as little cost as possible.

The main objective of this exercise is to teach students about the responsibility of the firm to its employees and how to deal with organized crime. A secondary objective is to provide some understanding of the current ongoing situation in the failed state of Somalia and how to negotiate in high-risk situations. The case can be used in corporate responsibility, international business or international management courses.