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OL 211 Final Project Milestone One Guidelines and Rubric
Overview: This milestone is designed to begin a critical analysis applying knowledge gained within the course. This short paper assignment is the first step in the
analysis of the company that will become your final project. For the final project, you will review the human resource management (HRM) in an organization
through a real scenario. This case study will give you the opportunity to explore various roles and processes within the human resources profession. A key skill for
any professional working in human resources is the ability to develop and implement processes that align with a company’s strategic plan and mission.
Begin by reading the first 13 pages of the case study, A.P. Moller-Maersk Group: Evaluating Strategic Talent Management Initiatives (up to HR-Customer Initiative
at Maersk), located in your Harvard Business Review Coursepack.
Start your short paper by briefly answering the following questions:
1. Explain why the human resource function should be aligned with an organization’s strategic plan (use ideas from the Module One discussion on this
2. Explain how current global conditions in Maersk’s industry impact human resource management practices within this organization (use ideas from the
Module One discussion on this topic).
Then, using the material on recruitment strategies provided in this week’s lesson and the case study, address the following:
1. Compare and contrast recruitment and selection of internal versus external candidates in general.
2. Describe how Maersk has recruited and selected new employees who were aligned with the organization’s vision and goals over the years.
3. Assess the effectiveness of its recruitment process and determine what changes if any you would recommend to improve employee success and
Guidelines for Submission: Your submission should be 2–3 pages in length and double-spaced using 12-point Times New Roman font. Be sure to list your
references at the end of your paper.
Critical Elements
HRM Functions
and Practices:
Exemplary (100%)
Meets “Proficient” criteria and
explanation is supported with
Proficient (85%)
Explains why the human
resource function should be
aligned with an organization’s
strategic plan
HRM Functions
and Practices:
Global Conditions
Meets “Proficient” criteria and
explanation is clear and detailed
Explains how current global
conditions in the industry impact
human resource management
practices within organizations
Staffing: Recruit
Meets “Proficient” criteria and
description demonstrates a
nuanced understanding of the
relationship between recruiting
and the organization’s vision and
Meets “Proficient” criteria and
establishes which method would
be more beneficial for an
organization based on the
Submission is free of errors
related to citations, grammar,
spelling, syntax, and organization
and is presented in a professional
and easy-to-read format
Describes a process to recruit
and select new employees who
are aligned with the
organization’s vision and goals
Articulation of
Compares and contrasts
recruitment and selection of
internal versus external
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Needs Improvement (55%)
Explains why the human
resource function should be
aligned with an organization’s
strategic plan, but explanation is
cursory or inaccurate
Explains how current global
conditions in the industry impact
human resource management
practices within organizations,
but explanation is cursory or has
gaps in accuracy
Describes a process to recruit
and select new employees who
are aligned with the
organization’s vision and goals,
but description is cursory or
Compares and contrasts
recruitment and selection of
internal versus external
candidates but comparison lacks
detail or contains inaccuracies
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas
Not Evident (0%)
Does not explain why the human
resource function should be
aligned with an organization’s
strategic plan
Does not explain how current
global conditions impact human
resource management practices
within organizations
Does not describe a process to
recruit and select new
employees who are aligned with
the organization’s vision and
Does not compare and contrast
recruitment and selection of
internal versus external
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
A.P. Møller – Maersk Group: Evaluating Strategic
Talent Management Initiatives
At the start of 2012, Maria Pejter, senior director of Maersk Group’s Human Resources department,
and Bill Allen, head of Human Resources (HR), sat down to consider some key aspects of Maersk’s
talent management strategy. Through 2008, Maersk had experienced several years of rapid growth and
strong profitability. The global recession in 2008 had negatively impacted both Maersk’s top line and
its returns; however, operating results had since improved, and Maersk earned record profits in 2010.
In recent years, Maersk had seen a rise in its unusually low historic employee turnover rate. And
Maersk had experienced a notable change in its corporate culture as it transitioned from a familyowned Danish shipping company into a global, publicly-traded conglomerate.
Allen and Pejter were evaluating Maersk’s talent management priorities in the context of the
increasingly competitive and fast-moving talent market of the 21st century. As Maersk continued to
grow, finding, developing, and retaining high-quality talent was becoming a bigger challenge. In
particular, Maersk was experiencing five notable talent challenges.
The first of these was increased employee turnover. Maersk had traditionally relied heavily on
employees who started with the Group as trainees and then spent the entirety of their careers there.
However, with competition in the labor market increasing, a greater number of Maersk employees
were leaving the Group for external opportunities. Maersk estimated that, of the approximately 400
trainees it brought on board each year, only 20% of them were still with the Group after five years. In
light of this rise in attrition, Maersk’s HR had increased its efforts to bring in experienced hires from
the outside. Allen and Pejter needed to better understand how much of a problem this higher attrition
rate was creating. How did it compare with what other firms were experiencing? And was it possible
that this higher turnover also provided an opportunity to bring in high-quality talent and to further
diversify the Group’s employee base?
The second challenge centered on what to do with Maersk’s training and development programs.
The training that Maersk had traditionally provided to its trainees was extensive, and included both
formal courses and on-the-job training, including rotational programs that allowed employees to move
across geographies and business units. This training was costly, but had been considered a solid
investment because many employees stayed with Maersk throughout their careers. However, with
employee attrition rates rising, and industry competitors targeting Maersk employees because of their
strong training, perhaps this strategy needed to be rethought. Additionally, as the need arose to
Professor Boris Groysberg and Research Associate Sarah L. Abbott prepared this case. HBS cases are developed solely as the basis for class
discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 20EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Copyright © 2012, 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685,
write Harvard Business School Publishing, Boston, MA 02163, or go to This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
hire more experienced individuals, should more emphasis be placed on the training needs of these
individuals? What other types of training should Maersk be offering its employees to ensure they were
well equipped to meet the business challenges of the 21st century?
Third, should Maersk continue to hire experienced individuals from outside the firm? In recent
years, the percentage of senior positions filled by external hires had increased from virtually none to
30%. What were the pros and cons associated with hiring from outside? How should Maersk think
about integrating these external hires? Feedback on Maersk’s integration efforts to date had not been
positive. Was it Maersk’s responsibility to integrate these senior hires, or was it a matter of hiring the
type of people who understood what it took to be successful in an environment like the one at Maersk?
Many companies practiced “natural integration.” What practices should Maersk put in place to
integrate experienced hires, if any?
Fourth, one way of bringing in external talent, while potentially reducing the associated integration
risk, was by rehiring former Maersk employees (“boomerangs”). While Maersk had no formal policy
on rehiring, it had historically been considered taboo. However, given Maersk’s significant talent
needs, Maersk had reversed its position on this policy a few years back. Pejter and Allen planned to
look at how this policy was working and determine whether or not the change had been a good one for
the Group. Should it rehire former employees? If so, under what conditions? And, at what level should
they be brought in?
Finally, Maersk was becoming a more diverse company with a more diverse customer base, and
was operating in an increasingly diverse business environment. In light of this, how did Maersk build
an inclusive culture? Did one already exist? Or was it something they needed to continue to work on?
A.P. Møller – Maersk Group: Company Background
The A.P. Møller – Maersk Group (“Maersk” or “the Group”) was founded as a shipping company
in 1904 by Arnold Peter Møller and his father, Captain Peter Maersk Møller. Arnold Peter Møller served
as CEO of Maersk until his death in 1965. He was succeeded by his son, Maersk Mc-Kinney Møller,
who served as CEO until 1993 and chairman of the board until 2003. In 1993, Jess Søderberg, who had
been with the Group since 1969, became CEO, but resigned in 2007 after a rumored clash with McKinney Møller.1 He was replaced by Nils S. Andersen, an external hire who had been with Carlsberg
A/S for over 20 years—most recently as president and CEO—but had served on Maersk’s board of
directors since 2005.
Headquartered in Copenhagen, by 2012, Maersk was the largest company in Denmark, and
operated in 130 countries with nearly 110,000 employees. Maersk comprised over 1,000 companies, and
operated one of the largest container shipping businesses globally as well as oil and gas exploration
and container terminals operations. Additionally, Maersk held a 68% stake in Dansk Supermarket
Group and a 20% interest in Danske Bank.
Maersk’s businesses included:

Maersk’s container services businesses—Maersk Line, Safmarine, MCC Transport, and Seago
Line—which contributed 40% of Maersk’s revenues. These operations consisted of 645 owned
and chartered vessels with aggregate capacity of 2.5 million twenty-foot equivalent units (TEU).

Maersk Oil, Maersk’s oil and gas exploration and production (E&P) operations, which
contributed 20% of revenues. Maersk had E&P operations in the United Kingdom, Denmark,
Qatar, and Algeria.
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives

APM Terminals, which owned and operated container terminals globally and contributed 7%
of revenues. Its network included 55 container terminals and 154 inland facilities in 64 countries.

Maersk Drilling, offshore drilling and land rig operations (including a 40% interest in Egyptian
Drilling Company), which contributed 3% of revenues.

Other businesses: Maersk Supply Service (anchor handling and platform supply vessels);
Maersk Tankers (oil and gas tanker shipping); Damco (logistics); Svitzer (towing and salvage
operations); Maersk FPSOs (serviced floating oil and gas producers via its fleet of three floating
production, storage, and offloading units (FPSOs), one floating gas storage offloading unit
(FGSO), and one jack-up production module) and Maersk LNG (owned and operated Liquefied
Natural Gas (LNG) carriers).
2002–2008 saw strong growth globally for the container shipping industry, driven in part by the
expansion of outsourcing, growth in emerging markets, and China’s entrance into the World Trade
Organization in 2001. Maersk’s other businesses also experienced robust growth, resulting in a 15%
compounded annual growth rate (CAGR) in group revenues, and a 14% CAGR in both EBITDA 1 and
assets over this time period.
However, in 2008, the global recession resulted in slower growth across many of Maersk’s business
lines. In subsequent years, container industry volumes were relatively flat, and with significant
overcapacity, rates remained soft. In light of this environment, Maersk focused on expansion in growth
markets, such as Asia and Africa, and on cost control and improved efficiency in mature markets. One
business which remained a growth area was energy, with rising oil prices driving strong top-line
growth. Maersk produced 333,000 barrels of oil equivalent (BOE) per day in 2011 and had a strategic
goal of producing 400,000 BOE per day.
As of December 31, 2011, Maersk’s total market capitalization was $28 billion (in U.S. dollars). The
company had been publicly traded since 1982, and was listed on the NASDAQ OMX Nordic exchange.
Maersk had two classes of shares: A shares, which possessed voting rights, and B shares, which had no
voting rights. As of December 31, 2011, Maersk’s share capital consisted of 4,395,600 shares, 50% of
which were A shares and 50% of which were B shares. The Møller family’s foundation controlled
41.22% of the share capital and 50.6% of the total votes. (Through other entities and private ownership,
the Møller family controlled an additional 25.9% of the voting power of Maersk.) Fortyone percent of
the share capital was freely floated. (See Exhibit 1 for share price data for Maersk, and Exhibits 2 and
3 for detailed financial performance data.)
Talent Management at Maersk
Talent Management in the Pre-2003 Era
The evolution of Maersk’s talent-management practices can be viewed in light of the company’s
overall evolution and growth. As Maersk transitioned from a family-owned Danish company to a
publicly-traded global conglomerate, its work force changed, as did its talent needs and practices.
Many of these changes also reflected trends in the broader market, as talent became increasingly
1 Earnings before interest, tax, and depreciation and amortization.
This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 20EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 20EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Pejter described the workforce culture that had traditionally dominated Maersk: “In many ways,
A.P. Møller has been a company of people who work there for life … We have disproportionately many
people who get to their 40-year anniversary or 50-year anniversary with the company, and no one
makes a big wahoo out of 25-year anniversaries because they are very common.” She added that, due
in part to the presence of a strong founding family, Maersk employees felt they were part of something
that was more of a “familial relationship.”
Maersk had historically focused on hiring and training young, inexperienced individuals. It was
not uncommon to hire individuals directly from high school. Maersk’s two-year training program
entailed on-the job-training and formal coursework. Successful trainees were guaranteed an overseas
placement as part of their ongoing training. Individuals were hired by the Group, and moved regularly
across Maersk’s business lines.
In keeping with Maersk’s familial culture, managers were often slow to let go of underperforming
What emerged as a result of these practices was a strong, arguably homogenous and
companyfocused, culture. Bill Allen described the culture at Maersk as “an insular organization,
internally focused, quite successful, very successful when it came to Denmark, quite successful
globally, a big headquarters, slow moving, bureaucratic. [There were] lots of control mechanisms in
headquarters indicative of a control culture.” He added, “In terms of things we were doing well—good
focus on leadership, good focus on values, and appreciation for the heritage of the organization, [there
was] a passion, a tremendous passion, about the industry, or industries that we were in, and a good
foundation, if you will. Smart, competitive people. It’s got a lot to [do with] our selection procedures
over the years.”
Jesper Madsen, a vice president in HR at Maersk Drilling, argued that while Maersk was good at
filling the firm’s needs, it was less good at focusing on the needs of its individual employees. He
explained, “But where we’re not doing well enough is on leveraging the talent of each individual. I
think we have a number of employees in our organization that are not the best version of themselves—
that we could actually benefit from engaging more in their personal development. So, the individual
career management—career development, personal aspiration development—I think that’s the area
where we are underleveraging for the time being.”
Rolf Habben-Jansen, CEO of Maersk’s Damco unit, posited that the homogenous nature of Maersk’s
employee base could present challenges. He argued, “The DNA of many of our people [is similar]—
they have been selected in the past based on certain personality profiles that are very, very similar.
And I’m a firm believer in the need to have some diversity also in terms of personality because
suddenly when you hit more turbulent times, it sometimes just helps to have some people that don’t
always go with the flow because they can help you challenge the conventional wisdom.” And, he
continued, “Because we had basically grown up all the management executives the same way, that’s
how we ended up with a leadership team with too similar beliefs, which is not ideal for running a truly
global and very diverse business.” Bill Allen concurred, arguing that traditionally Maersk employees
“knew how the organization worked. They were very, very, very good operationally. They got things
done, [and were] very execution-focused. But on the other hand, they really didn’t have an external
focus, because they hadn’t been brought up that way. They were probably more operationally
predisposed than they were commercially predisposed.”
document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 22EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
According to Maersk employees, key personality traits that historically characterized successful
employees included “an enormous willingness to help other people” in the organization and an ability
to build relations. “People that are able to adjust fast, and that don’t need directions all the time” have
also traditionally thrived at Maersk. Intellect, a focus on execution, and being a team player were
itemized by many as critical to success at Maersk. Also, an “ability to work within a fairly loose
framework, and get comfortable with that is very important, because you will be given a lot of
responsibility fast.”
Talent Management, 2003–2008
As Maersk expanded, its growth impacted both Maersk’s talent management practices and
processes, and its culture. To support its growth, the Group needed more experienced personnel and
managers. To fill these needs, it focused on both hiring experienced professionals and accelerating the
career progression of trainees.
Maersk’s growth also impacted the amount of interaction between business lines. Hiring and
training became business-line rather than Group functions; and rotational training programs focused
on rotations within rather than across Maersk’s business lines. Together, these changes impacted the
employee culture. As Pejter said, “when your company grows that fast, then the relationship between
the management and those employees at the end of the chain changes as well.”
Maersk also implemented more performance measurement standards, and letting go of
underperforming employees became more commonplace. As Jorn Madsen, a senior executive with
Maersk Oil, argued, ”I think that for many years some people would say that we have been
conflictavoidant. Conflict handling is something that we’ve not been very good at—having the difficult
conversations, getting rid of people. It has to do with [the fact] that we spent so much time on getting
them in, and therefore it often more reflects on the managers when they have to let a person go why
are you not able to get this person to work? But I think, in general, we have become much better at
that. We also have become much better at saying, ’Well, you probably don’t fit in here anymore. You
need to find yourself another place to be.’”
At the same time, Maersk was becoming increasingly global, in both its business and its employee
In 2003, Mc-Kinney Møller, who was chairman at the time, sat down with the top 50 managers at
Maersk for a discussion about the key company values. Mc-Kinney Møller set forth his views on these
values, setting the tone for the discussion that followed. That discussion led to a company-wide
rollout—in many ways interactive and collaborative—of Maersk’s key corporate values. As part of
this rollout, Pejter said, it became apparent that “some of the things that had been going on in terms of
leadership and management in the organization were not actually quite in keeping with our values.”
As a result, Maersk made a number of senior management changes.
Talent Management, 2008–2012
In 2008, Allen was named head of Group HR to help transition the HR function from administrative
to strategic, and to position the company for the 21 st century. Under Allen, the decision was made to
delegate operational responsibilities to the business unit levels. Headcount in Group HR was reduced
from 87 to 24 (and all but one of the 24 were new hires). The revamped group had three key priorities.
As Allen described, “Today, we have 24 people, and we focus on just essentially three, arguably four,
This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 22EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
areas. Number one is getting the right people in the right jobs at the right time for our top 1,000
employees. Number two is leadership development [because it] drives business results. Number three
is differentiation in terms of rewards and pay for performance. Inherent in all that is performance
Under Allen’s leadership, Group HR implemented a new talent-management process. The talent
management process consisted of five components: attraction, identification, development,
deployment, and scenario planning.
Attraction The first piece of the talent-management process was “attraction,” the process of
bringing the right people into the Group. Under the newly restructured HR department, this was
largely the responsibility of the business-unit HR departments.
Identification The second component of the process was “identification,” represented by People
Strategy Sessions (PSS). For Group HR, the talent-management year began in January with the PSS,
which was a discussion between Maersk’s six-member executive board and the head of HR, focusing
on the top 120 positions in the company. As part of this review, they considered the firm’s major needs
and, as a result, the required capabilities of its talent. They looked at these needs in the context of the
Group’s five-year business plan and how it might impact any changes to these requirements. For
example, was a large acquisition being considered that might put a strain on existing resources? Were
changes in HR needed in light of a recent accident in one of Maersk’s business lines?
The top 120 positions were then labeled as mission critical (30%), impactful (60%), and less
impactful (10%). In sorting the positions this way, they made careful comparisons across business units
so that not just the importance of a particular position within a unit was considered, but also the
relative importance of that unit within Maersk as a whole. For example, the CFO of Maersk’s biggest
unit might be considered alongside the CEO of a smaller business unit.
Next, the board and head of HR reviewed the individuals in these top 120 positions. The reviewers
asked, “Who are the people who have performed outstandingly? How have they done it? Is that
performance sustainable?” Employees were categorized as high performers (30%), successful (60%),
and less successful (10%).
Finally, the two reviews were lined up side by side so that management could evaluate whether the
Group’s best people were in the most important positions. As Pejter noted, the reviewers would ask of
each mission-critical position, “If this position is done optimally, what impact would that have on the
From the PSS, management and HR emerged with an action plan. The PSS allowed them to identify
(and prioritize) talent gaps in the organization and to come up with a basic action plan. What needed
to be done? Was it a training need? Did an employee need to be moved? Should they bring someone
in from the outside?
The first PSS was held in January 2009, and Pejter recalled, “In the first year, we had a lot of action
plans but that number has been decreasing.” Pejter also noted that the PSS became increasingly more
productive as managers prepared more thoroughly and became more familiar with the key positions
and the people in them.
document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 22EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
A PSS was also conducted in each of the major business units, with the management team of each
unit reviewing their top 75-100 positions. Each business unit adapted the PSS process slightly to fit its
own needs. As Pejter explained, “The core of the process remains the same, but different business units
use it differently . . . give it a different flavor.” For example, at Damco a key client was invited to
participate in the PSS process.
The PSS was also integrated into the global compensation system for senior leaders, with an
individual’s PSS rating functioning as a cap on what that person could earn as an annual bonus. Bonus
numbers were based on Group or business unit performance and personal performance, which was
based on both what results were achieved and how they were achieved. “High performers” were
entitled to the maximum bonus. “Successful” employees were entitled to a payout of up to 50% of the
maximum, and “Less effective” employees could earn only 25% of this maximum number. Pejter
recalled that in 2010, with extremely strong Group business results, PSS ratings were an important
After experiencing three cycles of this process, Pejter noted that the link between the PSS rating and
the annual short-term incentive strongly reinforced the company’s commitment to reward
performance and drive the talent-management strategy.
Development The third part of the Group talent management process was development— and
much of that stemmed from the action plans of the PSS. In recent years, broad universal training
programs were replaced with more individual training and development. Additionally, while
traditionally training efforts had been focused almost exclusively on trainees, a greater emphasis was
now placed on the training needs of experienced employees.
Deployment The fourth part of the talent management process was deployment. Maersk replaced
its focus on meeting talent needs internally with a more balanced strategy. By 2012, 70% of executives
were internally developed while the remaining 30% had been brought in from outside the Group. For
external hires, the benchmark was whether the person could be a high performer within two PSS
cycles. For each vacant position, HR reviewed the candidate list and asked, “These are the best we
have, but are they also the best we can get?” Maersk had also come to utilize partnerships with external
consultants in areas where management felt they didn’t necessarily need the skill-set internally (for
example, partner with a third party on an IT project). This was a big change for Maersk, as historically
management felt strongly about keeping all expertise in-house.
With respect to deployment of internal resources, one area of focus for HR was “talent intimacy”—
understanding not only which individuals were qualified to do a particular job, but also which were
willing to do it. Is the candidate willing to relocate? What family and personal commitments might
prevent them from accepting a new position?
Scenario planning Finally, scenario planning was the last piece of the talent management process.
Historically, HR had regularly updated a detailed succession plan for key positions. However, when
Allen joined Group HR, they realized that these plans had not proved particularly useful. They
stopped working on new plans for a couple of years, and then, in 2010, piloted “scenario planning.”
This involved looking at a five-year plan for each unit and assessing the unit’s major people needs
going forward. Was this a growth business? Would they be making acquisitions? Selling off business
lines? HR also put in place more formal succession plans for approximately 12 senior, high-risk
positions. These positions included the six executive board members, and six other positions that the
board deemed as high risk. (Some of these cases were based more on the individual than the position.
This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 22EW3 at Southern New Hampshire University, 2020.
A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
For example, if the board was aware a senior employee was thinking of leaving the Group, the position
was considered high risk.)
Measuring performance Employees with Maersk have argued that post-2008 there was an
increased emphasis on performance measurement and standardized benchmarks. As Michael Chang
Bjornlund, an employee with Maersk Line’s Network & Products division, explained, “before, we were
smaller, we were less structured, and we were all about just doing business, everybody looking at their
own piece of the puzzle and doing the right thing themselves.“ He continued that today, “Maersk Line
is incredibly driven by objective settings and key performance indicators (KPIs) and schemes that
dictate behavior.” Morten Wedel Jørgensen, an employee with Maersk Oil, concurred, stating, Maersk
“has become more performance focused … more focused on accountability for the part of business
you’re in—there is more transparency around who is responsible for what, exactly. “
The widespread implementation of benchmarking made it more difficult for underperforming
employees to last at Maersk. Jørgensen posited, “So I think [for] people who don’t perform, it’s clearer
to see how not performing will influence your career here. So, for example, people around me who do
not perform, it’s clearer to see how they are then given some short-term objectives to fulfill, and if they
can’t do that then they will have to leave. I think that process has become much clearer, whereas before
there was at least a perceived tendency that even if you didn’t perform, once you were here you could
stay here for a long time.”
However, many argued that the use of formalized benchmarks also had its costs. Bjornlund argued
that “very rigid KPI structures don’t really encourage cross-functional collaboration.” He added, “And
I know it’s one of the downsides of objective setting like that. The upside is of course it makes people
know exactly what they need to do, and there’s no doubt about what you’re being rewarded on, but I
think it’s come to the point where we tend to forget the end-to-end picture, the holistic picture of our
business, and we’ve become too focused on our own turf.”
Talent Management Challenges
The first issue that Allen and Pejter needed to discuss was the increase in Maersk’s historically low
employee turnover rate. Turnover was rising across business lines but was particularly worrying in
some areas. For example, of the 400 trainees, from 80 countries, hired per year, only 20% of them were
still with the Group after five years. Also, Maersk’s energy businesses had seen a notable uptick in
attrition—annual voluntary attrition rates in Maersk Drilling had recently risen from 1%-2% to 5%.
This rise in attrition, combined with rapid business growth, had resulted in sizable hiring needs. As
Jørgensen explained, “We’re hiring (a) because we’re a growing business, and (b) because the attrition
in the oil and gas industry is substantial.” And Karsten Breum, head of HR at Damco, added, “We
have had to attract a significant amount of people outside the group into Damco because we’ve had a
very limited pipeline.” While it was difficult to keep up with these hiring needs, Breum commented
that, on the plus side, “We’ve become a lot more diverse, we’ve become a lot more dependent on people
from other companies within the industry.”
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Hiring inexperienced individuals and providing them with training had historically been the
hallmark of Maersk’s recruitment program. Its hiring processes were extensive, and involved
numerous tests (including psychometric tests originally designed for U.S. fighter pilots2) and multiple
interviews, often with five to six Maersk employees. Maersk also created personality profiles for all
The entry-level training program lasted two years. Individuals were hired straight from college or
high school. The program involved formal training modules as well as on-the-job training. During the
two years, trainees rotated through various functional groups. Additionally, many trainees opted to
pursue part-time studies in the evening at Copenhagen Business School. After the initial two years, all
trainees were guaranteed a two-year placement overseas.
Following the initial training and overseas placement, the Group provided its employees with the
flexibility to move around in the company and with other opportunities that encouraged employees
to stay with Maersk over the long term. As Jorn Madsen explained, “Maersk is very open to what you
would like to do with your career. There’s an opportunity to move horizontally into jobs that you
haven’t had before. In general, we look at people’s performance more than we look at their formal
backgrounds, and how well they perform in their jobs—most jobs you can learn. So, I think that’s why
I’ve stayed here so long. Because there has always been an opportunity to do something I haven’t done
In 2003–2004, Maersk began to look at a number of new training initiatives. In 2005–2006, it
launched a series of programs aimed at decreasing the time it took trainees to progress to the executive
band. At the time, it took 15–20 years on average, with the fastest movers taking 12 years. The first of
the new programs picked up a select number of employees as they came out of the trainee program.
The program lasted three years, and provided support for these employees as they progressed to the
general management level. After this, selected employees entered the Emerging Leader program,
which was designed to take employees from the general manager band of the organization to the
director band of the organization. And finally, the Executive Acceleration program was designed to
take the directors and catapult them into the executive band. The program would include
approximately 1% of employees, targeting the most promising. Pejter explained the objective of these
programs: “The success criteria that we put up for those programs were that they would have to have
an increased retention ratio for the people that were on the programs, compared to the control group,
and that secondly, the programs should support those people’s careers accelerating at a faster pace
than the control group.“
By 2008, with a new CEO and with Allen’s arrival as the new head of HR, the preliminary results
of this new training program were reviewed. Initial results showed above-average attrition rates for
program participants, and so, given the costs, the lack of a return on their investment, and shifting HR
priorities, the program was closed down.
Under Allen, there was a shift in Maersk’s internal training to emphasize leadership development.
Allen elaborated: “One of the things we decided that we would be involved in is training that supports
what we expect of our leaders. We expect three things of our leaders. One is to deliver the results. Two
is to be a good and inspiring leader. Three is to live the values of the organization.” He added, “The
piece around being a good and inspiring leader is really the piece that our leadership training focuses
on. That’s basically all we do from a leadership development standpoint, because … You essentially
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
cannot be a successful business leader, if you can’t be a successful people leader.” Pejter noted that
Maersk changed the design and focus of executive training; it was no longer viewed as a reward to be
given to high-performing employees. Instead, the view was that “it should be given to people who
need it to perform better in their jobs, instead of a bonus.”
The idea of individualized, need-based employee training had become popular with a wide range
of firms in recent years. Many firms embraced this concept alongside pay-for-performance initiatives,
with highly ranked employees who exceeded performance targets eligible for bonuses, while
lowerperforming employees were let go, moved to new positions, or provided with training to help
improve their performance. TIAA-CREF, for example, introduced a new performance evaluation
system in the 2000s whereby employees were ranked on a scale of 1–5. Employees with top scores
under this system were entitled to a bonus and a merit increase of 5%, while employees with lower
scores were reviewed by their managers to determine if they were in the right position or if they needed
additional training.3
Maersk HR also believed that some training was best done on an individualized basis, rather than
in a broad training program. And here, again, the concept of talent intimacy was stressed. Managers
focused on getting to know their employees such that they could understand not only what each
employee’s needs were, but how that employee learned best.
HR created a “Development Shop”—an online depository for training and learning resources. This
included materials from 250 business schools globally, and covered such areas as financial acumen,
strategic leadership, and self-leadership. Training offerings consisted of traditional classroom learning,
e-learning, and business articles. Everyone in the firm was given access to the articles and other free
materials. All courses required approval, with online courses generally restricted to the top 2,000
employees and classroom courses to the top 300 employees. HR found that some executives wanted to
“self-service” their development needs; these individuals focused on online learning options. Others
preferred learning with their team or via classes.
Integrating Experienced Hires
As discussed, the hiring of experienced outside individuals had become an increasingly important
piece of Maersk’s HR strategy. Allen and Pejter contemplated the pros and cons of this strategy. Was
this a positive for the company or should they be making more efforts to develop and retain
homegrown talent?
There was also a growing sentiment among many within Maersk that bringing in outsiders was
good for the organization. As Pejter commented, relying solely on internal talent could result in a “lack
of fresh eyes and energy.” Internally, Maersk referred to this new, balanced talent development
approach as “build, buy, or borrow.” Jesper Madsen commented that “what we have done from an
organizational point of view is instead of focusing only on building from inside, it’s now a strategy
where we build, and we also buy, from the outside … it’s a strategy of a more mixed approach than
what we used to have, say, ten years ago.”
However, many believed that Maersk did not do enough to support these hires, and that Maersk’s
strong and cohesive culture made it difficult for experienced hires to succeed. Jorn Madsen observed,
“We have just, in our business unit, taken on some fairly senior people. It takes a long time for them to
fit in. The culture is difficult to get into, because most of us have grown up with it, so we know all the
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
dos and don’ts. We know how to get things done and how to make allies and how not to make enemies
and how to get your projects through the systems and get traction.” Madsen continued, “There are
extensive programs for junior hires, but nothing in the way of training or coaching for experienced
hires.” Jørgensen concurred, explaining, “There is a graduate program for technical graduates … But
for me coming in as an experienced hire on a different career track, there isn’t any.” Bjornlund, a
boomerang hire in Maersk Line, had a similar experience.
When I came back, it was part of a deliberate action to bring in new blood from outside …
we do have a lunch every month, with the six other guys that were hired under those terms, so
to speak. And I can tell that that’s one of the things they found difficult. So they hadn’t been in
the company before, and they felt that it has been a little bit difficult to establish themselves in
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terms of getting to know people, because knowing people is often . . . a prerequisite for getting
things done, and it can be hard to maneuver if you don’t know people.
The Practice of Re-Hiring
While rehiring former employees was not a new phenomenon, it had received increased attention
in recent years. In a 2010 survey by OI Partners-Career Management Resources of Atlanta, 50% of
employers reported that they planned to hire former employees.4 And, John Sullivan, a San Franciscobased human resources adviser, estimated that up to 10% of new hires at many companies were
boomerang employees.5 In some firms this number was even higher. For example, according to Karen
Wensley, Ernst & Young’s HR manager in Toronto, 15%–20% of that firm’s hires each year were
previous employees.6
In some instances, boomerangs had left the firm voluntarily, while in other cases, they had been
laid off as part of a downsizing. The length of time that employees were away from a firm before
returning also varied, but according to a study of 450 boomerangs by Abbie Shipp at Texas A&M,
nearly seven of the 10 rehires returned to their firm within three years. 7
Many employers argued that, in the right circumstances, a boomerang could be lower risk and less
costly than other hires. Given that the employee was known to the firm, the hiring and recruiting
processes could be shorter and less labor-intensive. These employees were often also quicker to get up
to speed, reducing initial training costs. The talent recruitment firm Hudson did a survey of 1,046
employers, and nine out of 10 of them ranked the boomerangs in their firm as “above average”
performers.8 Boomerangs were also believed to have higher retention rates; they had a clear sense of
what they were getting into when they joined the firm.
Given this, many firms, particularly in the services sector, sought out former employees as a source
of new hires. A study by Cranfield School of Management found that 25% of private sector firms
actively pursued boomerang hires.9
As part of this effort, firms had set up alumni networks to allow for ongoing communications with
former employees, keeping them up to date with changes and new opportunities at the firm. McKinsey
& Company began organizing activities for former employees as far back as the 1960s. Credit Suisse
Group AG launched the Credit Suisse Alumni Network in October 2010. Ernst & Young, Deloitte, Booz
Allen Hamilton, and IBM had also set up initiatives to keep in touch with former employees. As of
2008, IBM’s alumni network comprised approximately 38,000 former employees. Ethan McCarty, who
managed alumni relations for IBM, explained the rationale behind the network: ”It just makes sense
for companies, especially in the services landscape, to keep in touch with alumni because hiring back
formers is a cultural, financial, and productivity advantage.” He added, “”IBM’s business has changed
radically in the last five years to the tune of billions of dollars … People come and go out of IBM all the
time. It’s important to us to keep alumni abreast of all kinds of opportunities and skills that come up.”10
In 2012, Booz Allen Hamilton’s company website read, “It’s always our goal to retain our best
employees. The reality is, great people do leave the firm for a variety of reasons. It’s also true for Booz
Allen Hamilton that many who resign end up coming back. It’s such a frequent occurrence, we’ve
dubbed this special group Comeback Kids.”11 Likewise, Craig Roskos, managing partner of Ernst &
Young’s Winnipeg office, explained, “We welcome the opportunity to have alumni return to our
organization, as they understand our processes and culture and because they’ve stayed in contact with
people here, they’re already well-connected.”12 Neal
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Wendel, a Credit Suisse managing director, concurred, stating, “We know them, and they know us.”13
And, from the perspective of the boomerang employee, returning to a previous firm could have
simply been a matter of coincidence—it happened to be where the best opportunity was—or it could
have been a case of actively seeking to return to one’s prior firm. Cecilia Atkinson, general manager of
Celestial Seasonings, a tea company at which 11% of employees were boomerangs, argued that her
firm’s boomerang phenomenon was largely a function of the latter. “Celestial Seasonings has been
ranked as one of the best places to work in Colorado and in our corporate culture, employees feel as
much like family as coworkers. Our high number of long-term and boomerang employees speaks to
our dynamic and caring environment.”14
Historically, Maersk had an unwritten but widely upheld policy of not rehiring former employees
under any circumstances. As one employee recalled, “In the old days, it was a bit like—they abandoned
ship, and they could never return, because it was borderline treason that you did that before your
retirement age.” Jesper Madsen (a VP in HR at Maersk Drilling) concurred, stating, “If you go 10 years
back, this was a family-owned business with a very traditional mindset in terms of coming to work at
this company. It was sort of seen as joining a family, entering a marriage, and if you broke that bond,
then you were not welcome back.”
In the 2000s, in connection with the strategic corporate redirection, HR began to question the
wisdom of the policy of not rehiring former employees. Hiring needs were increasing, and the decision
was made to reverse this policy and to consider returning applicants on an opportunistic basis. As
Pejter recalled,
[The no-rehire policy] was really limiting some of the opportunities to get the best people in
the market, because some of the best people within our industry had at some point worked
within…And where we, perhaps, could see that they left the company because we didn’t have
the right job opportunities for them at the time, it somehow felt like a little bit of a waste to not
bring them back in when you knew that they understood the company culture, and they hadn’t
left for performance reasons, and they hadn’t gone to competitors.
Jesper Madsen attributed the reversal of this policy to the changing culture at Maersk:
I think we have grown out of the family-oriented type of business culture into a more
performance-driven culture where it’s not really about engaging into that marriage type of
relationship with a company, but it’s about making a contract where you agree that as an
employer, we would like to get you in. And as an employee, I would like to get in, and offer my
services for a period of time, and perhaps some time down the road, I want to try something
else, but if I’ve been a good performer, I can certainly come back. So I think that the rationale
behind that change should be seen as a change—or at least a modification—of our DNA.
Allen explained: “What we said is that if there are people that have been successful in the
organization, they left for the right reasons—they didn’t leave us in a lurch, they didn’t disparage the
company on their way out—and they were truly high performers, then we ought to rehire them.“ Pejter
and other HR personnel sat down with the business-line heads to let them know that they should
consider rehires where appropriate. Before rehiring a former employee, HR, as a rule, checked with
their old unit to ensure that the employee had left on good terms.
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Because of the heavy geographic rotation of employees within Maersk, having people move in and
out of groups was not uncommon. Maersk employees tended to return to the Group at their “peer
level,” where they would have been had they remained with Maersk. While no statistics were kept on
the number of rehires, HR believed that they were occurring across all business lines.
Returning employees also spoke positively about their experience with Maersk. One employee,
who left Maersk Line to do an MBA and subsequently spent several years with a strategic-consulting
firm, explained that he returned to Maersk because of an attractive opportunity in their oil and gas
business. He believed that there were benefits to being a boomerang, noting that there were “some
advantages in having a network already, and also understanding some of the other businesses that
[Maersk was in]. I think that has been actually quite a big advantage, especially in dealing with Group
level functions.” Likewise, Bjornlund argued, “It was definitely easier because I knew people, even
though I had only been here for four years and it had been quite a while since I was here. I knew people
here, there, and everywhere, basically. “
Building an Inclusive Culture
With a Danish founding family, which continued to own a majority stake, and its position as
Denmark’s largest company, Maersk had traditionally been very much a Danish company. Breum
observed, “Our mentality was Danish, our way of thinking was Danish, our leadership team was
Danish, our talent programs were only Danes, our trainee program was only Danes.”
However, in recent years, that had begun to change, and as Maersk grew larger and more globalized
with respect to its business operations and its customer base, its employee base and its corporate
culture began to reflect more diversity. Breum commented that this trend was first evident in the
trainee program:
Our trainee program grew to become a lot more international gradually and that, I think,
was a significant vehicle for changing the entire mindset in the company, also at the leadership
level. But these things take time, and all of a sudden we now speak English in any meeting that
you attend. At the coffee machine and the canteen you speak English because you know there
are international colleagues around you, and we have become much more focused on hiring
and on developing and retaining a much more diverse talent core.
With expansion efforts focused largely on developing markets such as Asia and Africa, and with
significant and growing hiring needs, Allen and Pejter realized that building a corporate culture that
would allow them to attract and retain talent from all over the globe was of paramount importance.
The HR-Customer Initiative at Maersk
In 2009, Maersk Logistics, Maersk’s supply-chain management business, and Damco, its global
freight and ocean-forwarding operations, were separated from Maersk Line to form their own business
unit, branded under the Damco name. Jeremy T. Haycock, president of Maersk Logistics USA, said of
this move, “The liner shipping and logistics and forwarding business models are very different, and it
has become too complex to run the two as an integrated business.” 15
Maersk’s management hoped that by splitting the businesses, Damco would be better positioned
to conduct business with other shipping companies. At the time of the split, 70%–80% of Damco’s
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
business was with Maersk. However, by the end of 2009, this number had declined to less than 50%,
as Damco built up its relationships with other shipping companies. Separating the two businesses
allowed Damco to offer customers a “carrier-neutral solution.”16 In 2009, Damco hired a new CEO,
Rolf Habben-Jansen, who joined Damco from DHL, where he had served as CEO of DHL Global
Customer Solutions. By 2012, Damco had over 10,800 employees globally. Damco employees managed
the logistics for more than 2.5 million TEU of ocean freight, and 110,000 tons of air freight annually.
2011 revenues totaled $2.8 billion, and Damco generated $97 million of EBIT. 2
In 2010, Damco executives met to consider ways to improve their relationships with corporate
clients. As Breum explained, “Like many other businesses, of course we would like to believe that we
are customer-centric, and I think a lot of businesses talk about it. The question is what exactly does it
mean, and what does it mean from an HR point of view?” From these discussions came the idea to
open up Damco’s PSS (People Strategy Sessions) to its best customers.
Breum described Damco’s approach to the People Strategy Sessions, which was in many ways
similar to the approach taken by the Group: “We look at the top 120 positions in the organization, and
then we go through a review of these positions, and we rank them as mission critical, critical, less
impactful.” This review was based on Damco’s three to five-year corporate strategy, and once the
positions were reviewed, the people in those positions were assessed. Breum and other senior
managers would rank them as
high performers, successful performers, and less successful performers, and then we look at
different combinations. So we look at our mission-critical positions and we look at the people
that we have in those roles but … ideally we would like to see that in these mission-critical
positions we have high performers in almost all of them.
Damco began by opening up its PSS to one of its largest customers in late 2010. At the time, Damco
provided a large percentage of this client’s supply-chain management needs, and 70–75 Damco
employees worked exclusively on this account. The client’s primary concern was “to make sure that
their operations from a supply-chain management point of view run smoothly and effectively.” To
help assure the client that Damco had the appropriate resources to best serve their needs, and to allow
them to have input into the hiring, promotion, and development of those employees working on their
account, Damco invited the client to participate in a PSS. As Breum explained,
The rollout started in a regularly scheduled review with the client. The client asked, “Did we
have a contingency plan, did we have a succession plan?” And we then said, why don’t we take
this a step further, and then actually go through our team and identify what are the key roles
where you really think we need to have a bench and a plan in place if something happens, and
then also review the current team together with you to understand where you see the talent in
our organization.
At the PSS, Damco managers discussed the key positions from the customer’s perspective. Were
the right people sitting in these jobs? What was the best way to develop and retain these people? (And
here the discussion was both general to the employee population overall and specific to each key
employee.) They looked at “bench strength”: “What happens if this individual resigns or if we were to
move this individual to another position in our organization? Do we have a back-up? Who would
back-fill that job, who would make sure that … there is continuity?”
2 Earnings before interest and taxes.
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Sanne Moller, a former Damco employee, argued that client involvement in the PSS was a very
successful initiative, stating that “the general impression that I get is that they [the client] are extremely
excited about the opportunity, at this way of interacting and being invited in and creating a
relationship.” She added that the client “[got] very serious about the strength of the team, the people
in our organization that work for them and, often, they know almost more about these individuals and
their performance [than we do] … the interesting part here is also that it becomes a little bit of a gray
zone [as to] who is actually your employer.”
Moller argued that the biggest challenge with respect to opening up the PSS was the “lack of control
and losing control because you put something that typically is very internal and place it … outside the
organization.” On the other hand, by bringing external people into the process, Damco benefited from
new and different perspectives and the result is often “high engagement from the customer side.”
In addition to allowing one large client into its PSS, Damco managers also hosted large workshops
where business leaders sat down with clients and discussed major issues. Moller observed, “And what
I see in these sessions is you have 35–40 people in these workshops from all over the world … what
happens in the room, and I’ve seen it at three different workshops now, is that there is an extremely
high energy level and engagement from both sides and actual business opportunities being discussed.”
She added that the participant questions at the customer sessions are “typically very oriented towards
them [Damco’s clients]. How can we help you improve your business? What matters to you? And from
what you see in the presentation, and what the participants also realize, is that … there are some
similarities in what the customers emphasize, but also some differences.”
While these initiatives were designed and launched by Damco HR, they required full participation
of the business leaders. Should one client experiment be expanded to include other large Damco
Looking Forward
Pejter and Allen considered each of these HR challenges in turn: rising retention rates; changing
development needs, reflective of a changing workforce, along with a desire to better target training
resources; the hiring and integration of experienced personnel; the practice of rehiring former Maersk
employees—was it working? Or, did the practice need to be amended or abandoned altogether? And,
finally, building a more diverse and inclusive corporate culture, a culture that was in line with, and
support of Maersk’s overall business objectives.
Which strategies were likely to serve Maersk well as it focused on continued growth and improved
profitability? Which, if any, represented a waste of their valuable HR resources? Or were there other
areas on which HR should be focusing?
Exhibit 1aMaersk: Five-Year Share Price Performance (Share Price in Danish Krone (DKK))
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Exhibit 1b
Maersk: Five-Year Share Price Performance (Relative to OMX Copenhagen 20,
Indexed to 00%)
Source: Thomson Reuters.
Exhibit 2
Maersk: Five-Year Financial Summary (USD in millions)
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
Profit before depreciation, amortization, and
impairment losses, etc. (EBITDA)
Depreciation, amortisation, and impairment losses
Gain on sale of non-current assets, etc., net
Share of profit/loss in associated companies
Profit before tax
Profit/loss for the year–continuing operations
Profit/loss for the year–discontinued operations
Profit/loss for the year
Cash flow from operating activities per share
Dividend per share
Share price (B share), end of year
Profit before financial items (EBIT)
Financial items, net
Total assets
Total equity
Cash flow from operating activities
Cash flow used for capital expenditure
Investment in property, plant, and equipment
Return on invested capital after tax (ROIC)
Return on equity after tax
Equity ratio
Exhibit 2 (continued)
Earnings per share (EPS)
Diluted earnings per share
Total market capitalisation, end of year
Average USD/DKK exchange rate
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End of year USD/DKK exchange rate
Maersk Line
Transported volumes (FFE in million)
Average rate (USD per FFE)
Average fuel price (USD per tonne)
Maersk Oil
Average share of oil and gas production
(thousand barrels of oil equivalent per day)
Average crude oil price (Brent) (USD per barrel)
APM Terminals
Containers handled (million TEU weighted with
ownership share)
p., accessed March 2012.
Exhibit 3a
Maersk: 2011 Financial Results by Business Segment (USD in millions)
Maersk Oil
APM Terminals
Maersk Drilling
Maersk Line
Maersk Supply Service
Other / Unallocated
Exhibit 3b
Maersk: 2011 Financial Results by Business Segment
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A.P. Møller – Maersk Group: Evaluating Strategic Talent Management Initiatives
% of total Revenue
% of total EBITDA
7.8% 7.2%
Maersk Oil
APM Terminals
Maersk Drilling
1.4% 2.5%
Maersk Line
Maersk Supply
Other /
Report, accessed March 2012.
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This document is authorized for use only by Natasha Youman in OL-211-X3835 Human Resource Management 22EW3 at Southern New Hampshire University, 2020.

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