Factors That Affect Decision Implementation at Kava and the Proposed Solutions - Essay Example

Understanding the Factors which affect decision implementation at Kava and the proposed solutions According to Langdon (Langdon 2001, p 125), there are two benefits of acknowledging the risks that are bound to go with any critical decision that would be made. First the decision-maker finds out if the risks involved do, in fact, outweigh the benefits of decision to be taken. The second reason is that a risk that is identified and documented is one that can be managed and mitigated. The purpose of risk analysis is to be proactive in listing the risks and to have a plan for managing the main ones. It is important to get an understanding of the factors that effect the actual decision. making process in Kava. Let us consider the factors for each factor and explore them further. The three main factors identified are Business Risks, Business Environment and Stakeholders. Business Risks The Business risks have been identified as natural and man made disasters. Natural disasters can be tsunamis, earthquakes and so on. Since Kava is in an island in the South Pacific regions, these factors can cause widespread damage. But there are many countries in this area that have managed to survive and prosper in this same region and they have done this by creating the right type of infrastructure. Nike Corporation needs to develop better weather forecasting methods that would help to serve as early warning systems for the occurrence of such events. With their massive clout, they need to get satellite warning systems that can analyze the weather and give sufficient warning. They also need to develop earthquake-warning systems that would foretell the occurrence of earthquakes. Man made disasters include AIDS and Avian Flu. AIDS is a global phenomenon and this can be mitigated by creating sufficient awareness about the disease and invoking proper safe sex methods among the populace. If a certain section of the populace such as sex workers are suspected to be the main source, then they need to be hospitalized and proper treatment given to them. Avian flu and other diseases are also global maladies and sufficient expertise is available in combating them. Proper health procedures, health checks, etc. can be implemented to ensure that the disease does not spread and is contained effectively. It is very important that a common consensus and effort be developed among all the citizens to combat these events. Since these factors can affect all communities, mitigating these risks can serve as the start point of creating a common bonding and a common identity. Business Environment Business environment factors include the various communities and groups that are active in the island. Kava is an isolated Island with limited interaction with the outside world. There are a number of community-based organizations and faith groups, each aligned to a different country, language and faith. So the island can be thought of as a closed ecological community and where any action that happens affects the life of all who live on the island. An isolated country has its advantages and disadvantages. People can be resistant to change and new ideas and may regard help as interference. On the other hand, Nike can use this issue as an opportunity to implement plans without interference from other parties. There may be bitter rivalry and infighting among these groups and Nike Corporation, with its global operations has had sufficient expertise in handling cross-cultural teams and bonding them together for a common goal. This expertise is another area in which the local government wants the help of Nike. Stakeholders Three groups of stakeholders have been identified in the case and these are the local government, local population and the vested interest business groups. There are different motivations, needs and drives that power these groups. The local government wants Nike to help in managing the natural resource effectively. They look for guidance at Nike to better manage their island. Nike Company is professionally managed and has expertise in managing and deploying resources. They have proven expertise in setting up infrastructure, planning, coordinating multiple resources and very effective marketing. The local government has optimum natural resources but needs help from Nike Company in planning and making optimum use of its natural resources. By the unstated inference, it can be taken that the local government would always look for what they could get out of any proposal that Nike Company makes. The government is supported by the military and the track record of such countries is that they fast resort to dictatorship and form a military junta. Nike Corporation needs to be aware that they are dealing with a potentially explosive factor that can overturn the company’s activities with a single shot. The local population is made up of people from different ethnicities such as South Pacific tribes, Chinese, African, French, Spanish, Americans and others. The religion is also mixed with 50 % subscribing to the local religion and other embracing Islam, Christianity, and Buddhism. They speak different languages and follow different customs. So we have an island where people come from different countries, speak different languages and follow different religions. An important fact mentioned is that ‘Quality labor is available cheap’. This fact is important if Nike plans to set up a manufacturing base for their products. Another important fact is that the population is young with 50 % being below 15 years. This large segment of youths can provide a ready market for the sports and leisurewear such as sports shoes and other accessories that Nike Company makes. Nike needs to develop trust among the people, give them education and training and create a skilled workforce base. Vested interests business groups are the most powerful elements of Kava. In all probability, the groups are owned and operated by feudal lords who dictate the terms, set their own policies and exploit the people. Nike has its own policies regarding treatment of workforce, compensation, benefits and others. Vested Interests business Groups would be severely affected by any changes that Nike brings in such as higher wages, breaking monopoly, introducing better management that makes operations transparent. This can effect the profits and exploitation that the groups have enjoyed over the years and there would be bitter opposition if Nike attempts anything that would affect the groups activities. Worksheet To get a full understanding of the risks and problems, a decision making sheet is used. The sheet helps to identify and assist in the decision-making processes. There are three distinct steps in decision making: Framing the Problem, Making the Decision and Evaluating the Decision. Please refer to the decision making Work Sheet, week four.. The table allows you to enter details of the three steps and the tasks involved in each step. Step one is Framing the problem and there are three tasks and these are identify the problem, define criteria, goals and objectives and evaluate effects of the problem. The second step is Making the Decision and there are four tasks. They are Identify causes of the Problem, Frame the Alternatives, Evaluate impacts of alternatives and Make the decision. The third step is Evaluating the Decision and it has two tasks Implement decision and Measure impacts. After the sheet is completed, the points need to be cleared so that a common consensus can be achieved to implement the decisions. Evaluating resources and actions required for decision implementation of the proposed solutions. To implement the decisions in Kava, a number of stated and unstated resources are required. The two Nike personnel can achieve only a limited amount and they need external resources to augment their efforts. The most important resource is skilled man power that understands the island and Nike philosophy. Human resources need ti be first imported from Nike Corporation and then training should be given to people from the local population. This would create the required synergies that would get the efforts moving. Obviously cash flows and financial resources play a very important role. The country has sufficient natural resources and the economy can support itself though organizing and raising the initial funding can be a probe. Money is required to set up the weather forecasting and earthquake monitoring centers and also to combat the diseases. Initial funding can be obtained through institutions such as the world bank or other institutions and Nike with its clout needs to arrange for the seed money. At the same time, the business groups and the local government should be made to invest in this effort. The financial exposure of Nike should be limited to building its core infrastructure. Analyzing Risks Analysis of the risks is important in managing the decision making processes. Analysis of the risk is done by plotting the risks in the risk diagram. Any risk has a probability of occurrence and its impact on a decision. Besides this the risk can be classified as per the priority and action that needs to be taken. There are four possible actions: Focus, Protect, Forget and Prevent. These risks are placed as grids in the risk diagram. The three risks identified are Business Risks, Business Environment and Stake Holders. The three risks are shown in the Figure 1. Three Risks Diagram. Focus means that the risk needs attention and careful attention must be given in managing it. The grid Protect means that the Risk must be managed by protecting it. When a risk is placed in the Forget grid, then it means that it has less significance and can be forgotten. When a risk is placed in the Prevent grid then it means that the occurrence of the risk needs to be prevented. In the diagram, the three risks are placed in the grid as per the probability and impact. The scale is on 0 to 10, where 0 means low and 10 means the highest. Each risk is placed in the appropriate grid. For example, Stakeholders have a high impact and a high probability that they are placed in the Focus grid meaning that the risk should have focused attention (Langdon, 2001, p. 132). After the risk mapping is completed we need to identify the risks and suggest the action needed to manage the risk The SMART Tool 9 helps to identify the risks and the suggest the action to manage the risks. Please refer to Table 2. SMART Tool 9 for Risk Management (Langdon, 2001, p. 128 - 133). In the table, the column Risks shows a list of all the risks. The columns P and I refer to the probability and impact of the risks. The column Action to Manage Risks specifies the actions to be taken to manage the risks. The last column S is identified with the colors, Red, Green and Amber. . How to Evaluate the ethical implications from stakeholders perspectives of the proposed solutions. As stated in the case, stakeholders can make or break the decision making process to a very great extent. It needs to be remembered that each stakeholder would want its interests to be protected, any way possible. What is required is to segregate the decisions and put them up in such a way that there is no clash of interest among them. While evaluating the implications, the decision should be weighed with factors such as: will it effect the basic rights of the stakeholder; how does the decision change the financial and business aspects of the groups; does the decision require then to make changes that harm their own interests. Development is required but they need to be seen more from a practical aspect of how it would effect the stakeholders. If the stakeholders have been doing something immoral over the years, then the decision should consider bringing awareness among the groups. This awareness movement should attempt to convince stakeholders and not force any decision on them. Worksheet Stakeholders have been identified as the Focus in the risk diagram. We first need to understand what the risk means, the current concerns and its impact on the performance and the decision-making processes. Ethical evaluation is done by using the SMART Tool 12. Please refer to Table 3. SMART Tool 12, that shows how the ethical implications from stakeholders perspective is done.In the table the issues and options are shown. Current concerns for each issue is listed and its impact on performance is also given. The Options row provides the options and key features for each option (Langdon, 2001, p. 144). Conclusion Of the three risks and factors that have been identified, it is the Stakeholders that has been identified as the focus factor and the probability of conflict and its impact on the decision making process is high. There are three major stakeholders and they are local self-government, local population and the vested interest business group. The role of stake holders, the current concerns and the issues are analysed and various options have been provided for to resolve the issues. Among the options and features proposed, a gradual training of the local population, providing them training and exposing them to better marketing and management principles have been suggested. Appendices Figure 1. Three Risks Diagram Table 2. SMART Tool 9 for Risk Management.   SMART Tool 9 for Risk Management   RISKS P I ACTION TO MANAGE RISKS S Business Risks 6 3 Implement weather forecasting methods. Provide healthcare and Aids awareness. G Stakeholders 10 7 Understand their interests and needs. Take decisions that are fair and prevent exploitation R Business Environment 5 6 Understand the communities, their beliefs, finding commonality and create a common identity A Table 3. SMART Tool 12     Current Concerns Impact of Performance I U ISSUES 1 Local Government: The local government needs help in managing its natural resources, industries and healthcare. They look for guidance at Nike to better manage their island. Nike Company is professionally managed and has expertise in managing and deploying resources. They have proven expertise in setting up infrastructure, planning, coordinating multiple resources and very effective marketing. The local government has optimum natural resources but needs help from Nike Company in planning and making optimum use of its natural resources. By the un-stated inference, it can be taken that the local government would always look for what they could get out of any proposal that Nike Company makes. This is another major force in formulating the problem. 10 10 2 Local Population: The island is made up of people from different ethnicities such as South Pacific tribes, Chinese, African, French, Spanish, Americans and others. The religion is also mixed with 50% subscribing to the local religion and other embracing Islam, Christianity, and Buddhism. They speak different languages and follow different customs. So we have an island where people come from different countries, speak different languages and follow different religions. An important fact mentioned is that "Quality labor is available cheap". This fact is important if Nike plans to set up a manufacturing base for their products. Another important fact is that the population is young with 50% being below 15 years old. This large segment of youths can provide a ready market for the sports and leisurewear such as sports shoes and other accessories that Nike Company makes. 5 7 3 Vested Interest Business Groups: These are the groups that are currently managing or running economy drivers such as Petroleum, Crops, Tourism, etc. Vested Interests Business Groups would be severely affected by any changes that Nike brings in such as higher wages, breaking monopoly, introducing better management that makes operations transparent. This can affect the profits and exploitation they have. 8 8 OPTIONS   Options Key Features S A F E 1 Provide training to local government on best practices in management and planning Representatives can be sent to colleges in uS for crash course and on return can be exposed to actual live problems. It is important to give a theorotical and practical knowledge G G G G 2 Local population can be assed for skills in manufacturing, design, administration and given training Train the population in different trades and practices. This will form a common binding among them. Trained peopla can be absorbed in the company or develop local artefacts A A A 3 Vested Interest Business Groups can be given training on better managing their business Train them in marketing and exporting. Find export avenues. Develop tourism G G G G References Langdon, K. 2001. Smart things to know about decision making (2nd ed.). New York, NY: Capstone Publishing. Inc. Read More