The world is increasingly becoming a global village and so has been the business environment. Businesses are no longer restricted to operate just within the national boarders. Globalization has eliminated such restrictions to enable individual firms compete within the global market place (Robbins, 2004).
This new global business environment in turn has presented opportunities as well as challenges as well as challenges that have redefined the role of entrepreneurship. Today, entrepreneurs as well as business leaders are required to possess a pragmatic vision and exercise effective leadership skills to develop, drive and maintain a competent business strategy that is capable of overcoming the new challenges while making most use of new opportunities (Robbins, 2004).
This is no different in Nik and Alex Scenario who must devise an effective business strategy to take the various benefits and opportunities offered by the new pacific island of Kava despite the many challenges the new market presents.
Although expanding the geographical footprint of a business in the modern era of globalization is not as perilous and costly as it had been a while back, the highly competitive nature of today’s international business environment requires perfectly executed measures to succeed and remain competitive. It is an environment that requires a perfect balance between defensive measures to overcome challenges and the risks as well as offensive measures to exploit strengths and take up arising opportunities.
To start with, there are a number of issues that stand on the way to the firm’s expansion of operations into the island of Kava. The first challenge is posed by the ecological factors of the island. Despite the island having a lot of resources and natural wealth that are of critical important too the parent firm, there are a lot of ecological obstacles that may stand on the way.
The island is firstly prone to such natural disasters as floods, volcanic eruptions, earthquakes, hurricanes, typhoons, tidal waves, tornadoes and the avian flu. In addition there are other disasters resulting out of human activities such as fires and petroleum spills. Besides disasters, the island is also coupled with some socio-cultural issues that may negatively or positively impact on business operations in the island. One of the major socio-cultural factors facing the conduct of business in the island is cultural diversity.
The island is inhabited by people of different languages and ethnic background such as Spanish speaking individuals, Americans, Chinese, French speaking individuals, Africans and the indigenous local ethnic communities and languages. Besides that, there is a mix of people with different religious orientations such as Christianity, Islam, Buddhism and other local religions.
In addition, the island is composed of mostly young people with a majority over 50 percent of the inhabitants being below the age of 15 years. Other issues relevant to the scenario and the Kava Island, is the fact that there are a high prevalence for HIV/AIDS which could be implicative of the cultural practices of people of the Island. There is also plenty of cheap labor which could be owing to the fact that majority of the population are young and below fifteen years left to cater for themselves and mostly uneducated.
Given all these underlying issues in the island, any business expansion plans must carefully take them into consideration to successfully commence profitable operations. One of the major obstacles and perhaps an advantage when looked at a different point of view is on how to learn to manage cultural diversity given the diverse nature of people and inhabitants in the island.
Managing cultural diversity can be a very daunting task especially when it concerns expatriation (Robbins, 2004). People tend to either take their culture as superior or inferior to others and theirs is always a problem in trying to adopt one’s cultural orientation fit or accommodate the different views and values upheld by people of the other cultures.
Culture is a big obstacle to the company as well as individual employees in terms of failed and unattained objectives and goals, to the local communities because of conflicts and to the wider international community because of reduced productivity and unexploited resources due to conflicts which would have availed more consumption options and choices (Robbins, 2004).
Ecological disasters on the other hand especially the naturally occurring can hardly be avoided. However, the company can try to manage the situation to derive the best of it through corporate social responsibility, relief programs and other activities that champion on environmental protection.
Last but not least concerns the demographic structure of the Kavas. The fact that majority of them are below the age of 15 years implies that there is a very high mortality rate among the people of the Island. One of the more direct causes to this perhaps having observed and mentioned by Alex is the high prevalence for HIV/AIDS. Although it might seem a celebration that there is availability of cheap labor in the Island, in real sense this may not be quite a cause to celebrate given the demographic structure of Kava.
Majority of the inhabitants are not in their productive years and more so the available labor may not be the most essential skilled labor. When there is such low capacity in human resource enhancement, such rich resources as those endowed with the island may not be of much help not to people of the island as they lack the necessary machinery for its exploitation and definitely not so for people in other regions such as this company who badly want to exploit these resources but nevertheless they are unable.
Last but not least definitely is terrorism. Terrorism exposes the rift and animosity that may exist between people of diverse cultural backgrounds and religious orientations and this may hinder local as well as international investments into resource plenty Kava Islands. To make the right choices therefore, all these issues as well as how they affect the various stakeholders must be considered.
Robbins, S.P. (2004). Decide & conquer: make winning decisions and take control of your life. New York: FT Press