The Sectors Concerned with Investment - Case Study Example

Question to the leader The major issues that engulf governments in the world today and more so in respect to their economies are the sectors concerned with investment. Investment is both local and foreign where both local people and foreigners are involved. This investment can be either direct or indirect. In respect to my country Kuwait what is most important is to increase the ease of doing business. This encompasses a great deal of infrastructural developments to be put in place in regards to business start-ups, taxation system, border trading, registration of property, construction constrains, permits for workers, access to credit, laws governing business operations e.g. law of contract and company law and business closure among others. Kuwait in these respects ranks fairly well with its neighbors Bahrain, Saudi Arabia, Qatar among others where it is ranked 61 (The World Bank 2010). Having given this background if offered a chance to address the leader of my country, I would ask him what the government is doing to enhance the ease of doing business in the country and more so in the area of investment both by local as well as foreign investors. The basic reason of asking this question is that the world is becoming more and more of a global business community. For countries which wish to be best positioned to doing business and increasing investment activity, creating a favorable environment of doing business is a necessity rather than a choice. Kuwait although well ranked as compared to its Arab world neighbors it has a long way to go as countries like Singapore are way ahead of it and yet it is one of the top 10 richest countries in the world considering the GDP statistics (The World Bank 2010). I may wish to know what the government is doing in respect to the various reference points mentioned above that are used to come up with the global rank on the ease of doing business. The first issue lies with the number of procedures that one undertakes as an investor to start a business venture. In total the procedures are 13 which is relatively a long process than on average takes a month and 5 days (The World Bank 2010). This aspect makes investors chose to invest elsewhere so as to save on time and expenses associated with the long wait. My suggestion on this is to consolidate these procedures and their documentation as well as doing away with others all together. The other area is that of delays in construction permits which in overall takes over 100 days while registrations of actual properties takes 55 days at minimum. Taxation is also high on profits as it is 4.7 percent where even in developing countries it is less than 4 percent. According to The World Bank (2010) the cost of exportation is a whooping over 1060 US dollars per container while that of importation is 1217 US dollars. Although the latter cost needs to be technically higher, the two costs need to come down so as to increase across border trading which increases the flow of international currencies. Difficult situation faced In my professional life which has spanned for years now various challenges have come my way and have been overcome. Experience is of essence in trying to deal with issues related to workplace related issues more so those challenging ones professional competence. Shipka stipulates that in the business arena situations that require one to come to the challenge are quite numerous and at times can be overwhelming (126). Personally I have faced many challenges but the one I shall discuss here is one that involved a project to come up with a diversification plan for our company to become a global firm. The main aim was to make the firm a ‘born global’ making it a difficult task considering the huddles associated with a young firm going global. The first step was to draw a general framework that was to act as a guide on how to approach the situation. When a young company is to go global huge emphasis is laid on the market characteristics in individual countries. A company having these kinds of ambitions must ensure that in its team there needs to be people who are well versed with dealing at a global scale. This is what our small company did not have leading to us first recommending a search for this person. After a thorough search it was found that since the first market was to be South Korea, it was prudent to look for a South Koreans with some grip on international business environment. I happened to be the head of coordination among the team members as well as all the team’s undertakings. For this reason I needed to have good international skills; which I had. The Koreans joined out team in order to give insight on the Far East Asian market environment. The unfortunate scenario came where the Koreans had little understanding of both English and Arabic which were the basic medium of communication in our meetings. Due to the job requirements I was to travel to Korea and analyze the market there and come up with a comprehensive report within 3 months. As I traversed the country with the Koreans we had employed to assist I came to discover that I needed to learn their language as within my first week there we had done quite little. I enrolled in day and evening classes and after a month of intense pressure I had learned to construct logical sentences in Korean language. Back in the company the deadline set still held. We conducted research within the one and a half months that was left and the report there after became the best analysis ever to be adopted by the company. The Korean market has since stood as the most lucrative for the company. This experience was quite encouraging on my part as time is all that we have and it is a resource that needs to be well treasured. My team of Koreans was able to clock the deadline set to present the report out of the dedication I put in ensuring that I do all that is possible including learning a new language in a month so as to ensure we met the standards set. The management was quite pleased to learn of the lengths that I went in order to do as required for the company and I was immediately granted a promotion to be the Head of Operations. Leadership practiced Being the Head of Operations is quite a tasking experience and it calls for someone who is able to change fast depending on circumstances so as to ensure all areas of the business are running smoothly and corrective measures are being enacted as soon as faults appear. Customer service is a key undertaking in operations management which ranks highly just like human resources management. Rosenbach and Taylor elaborate further that this position is also tasked with ensuring that the working relations are excellent both within the organization and between the organization and other stakeholders like the local authorities and the community at large (69-194). These tasks from their nature require huge experience, knowledge and skills in order to do them properly (104). I particularly faced an experience that has come to shape my leadership to date and that which I wish to polish by pursuing further studies in IE University in Madrid, Spain. In my eighth month in the position of the Head of Operations, the main server crashed so severely that a total replacement was needed while at the time when to the company was a peak season. This meant that all the systems were to either halt or proceed but pretty slowly. This to the business meant huge losses whose effect could keep trickling in years to come due to loss of customers and credibility. Valuable company’s and customers’ data got lost leading to massive panic especially in my branch which handled the highest number transactions. Honestly, the issue was quite enormous and required me to have a sober mind and called for excellent skill to maneuver. I was however not shaken by this and I had to reallocate duties especially to those dealing directly with customers and established a temporary crisis centre that handled all emergencies, queries and customer complaints. The other issue was to coordinate between the management, technical staff solving the problem and my junior workers dealing with the customers. The problem persisted for 75 hours and after a break through was found the system I was in charge of had become so efficient that it had started to seem like the routine. Since the company I am in is more on investments I wish to pursue this line so as to be enabled to handle situations like these excellently in future. I believe studying in IE University will equip me with the relevant skills that are vital in dealing with challenges like these in the contemporary workplaces and business environments. It is important to appreciate that IE University will definitely make me a better manager and make me have a better outlook to contemporary issues in the current and volatile business environment. Current challenge facing investment industry The global business arena has been one that for the first of this decade enjoyed sound investment trends but after the global economic crisis of 2008, everything is now in disarray and many countries are experiencing challenges as a result of the meltdown. Laying particular emphasis to explain this phenomenon is the case of Kuwait. The global economic crisis being the most significant contributing force to the current global investment trends has come to cripple economies and slow others and that of Kuwait having the latter effect. Kuwait’s expected GDP growth of 3.3 percent which is actually lower than a majority of its peers economically has this crisis to blame (Ghunaim 2010). The oil prices after the crisis hit the global economies saw the oil prices take a downturn leading to productions problems in Kuwait. This affected income a great deal especially in the periods that the price went as low as 30 US dollars. Investment companies and banks have seen it in a clearer picture than the rest as prices of property started depreciating fast. Banks after this became stingy in lending trends causing a huge credit crunch and subsequently a huge liquidity problem. As a result of these moves investment companies started foreseeing losses looming their way while others actually started declaring losses for the first time of humongous amounts. According to Ghunaim (2010) this then called for companies from the second half of 2009 to initiate restructuring measures for example mergers so as to reduce on operational costs, increase the internal liquidity by having a collective capital base and to increase efficiency in operations. Other companies and individual investors have since been keener in approaching the investment arena while a majority have adopted the ‘wait and see’ approach which is further hurting the progress that may be achieved by the measures the investment companies are taking (Ghunaim 2010). The problem is also being made worse by the fact that investors are keeping their cards under the table waiting for companies to announce their periodical results meaning that a great deal of liquidity instead for it to flow it is lying idle with investors who are wary of the situation. Kuwait’s equity market for example has witnessed negative returns and this can be well attributed to the negative returns of up to 70 percent in the country’s corporate sector (Ghunaim 2010). As much as the government of Kuwait has taken measures of economic stimulation, the oil prices’ stability or otherwise will play a key role in dictating the effectiveness of the various stimulus initiatives. It is clear that the global economic downturn has become one of the far reaching challenges that the investment sector not only in Kuwait but many countries are facing both developed and developing as well as those of the emerging markets. Works cited Ghunaim, Maha. Kuwait Investment, Global Investment House. 9 Feb. 2010, 4 Aug. 2010. . The World Bank. Doing Business 2010 Kuwait. The World Bank and International Finance Corporation. 2010. Shipka, Barbara. Leadership in a Challenging World: A Sacred Journey. Butterworth Heinemann, 1997. Rosenbach, William E. and Taylor, Robert L. Contemporary Issues in Leadership. 6th edn. Westview Press, 2006. Read More