Paradise Lost?

Paradise Lost?

A small island in the Andaman Sea is home to about 5,000 people. The primary business on the island is fishing, but there also a few resorts and hotels, as well as a number of small businesses. Fishing was long done on small boats, usually run by individual families. It was largely the same for many generations, but for the past few decades change has been constant.

The first change was a shift to to larger boats. As that happened, the industry began to consolidate—some people joined the larger companies in fishing on the new boats, while others did things like move into support industries. These new boats featured different fishing technologies, like larger nets, that allowed the boats to catch far more fish than they did previously.

Paradise Seafood eventually came to dominate the industry. The current CEO was the one who saw the fishing business being disrupted and moved to stay ahead of the changes. He aggressively pursued the new fishing technologies as local competitors largely resisted it. He also opened the island’s only processing facility, which became another important source of jobs for the local community. Between the direct efforts of Paradise Seafood, and the businesses that support its operations, it now accounts for roughly half of the island’s economy, so it’s an important part of the community.  

Leadership is now faced with a new challenge.  In recent years, catches have steadily gone down, while complaints about bycatch and environmental damage have gone up, as the nets disrupt the ecosystems on the bottom of the sea wherever the boats go. The local government is now discussing regulations which would ban the nets you currently use, and they may also put stricter limits on the amounts of different kinds of fish which can be taken, as well as the days in which fishing is allowed. The penalties they are discussing for catching more than your allowance would have a significant impact on your ability to maintain profitability. And the penalties for continuing to use your current nets or fishing outside of your allowed fishing days would be far worse. 

Your management team scheduled a retreat to discuss go forward possibilities. The group will review its current operations and the risks of falling catches, as well as the risks from potential regulatory changes. The goal of the meeting is to determine a path forward that will allow the company to maintain the jobs it has, while continuing to provide the same or similar products to market, or other lines of business that might use the expertise they have. The primary goals are to maintain stability in the island’s economy, while driving the firm’s operations towards being environmentally sustainable.

 

Points for Reflection:

  1. Discuss the issues of overfishing/bycatch and ways in which the firm might avoid such outcomes, while providing a similar (if not greater) amount of seafood to market.
  2. Given the efforts that are being undertaken by the government, what options do you have to try to influence their efforts in a positive way? What do you need to think about as far as the risks from the proposed changes? (What can you still do and what might need to stop?)
  3. What are the pros and cons of different options?
  4. Which option(s) would you recommend pursuing?
  5. Are there any research opportunities that you would like to look into or any new possibilities you would like to pilot?
  6. How might the changes you make impact the people who are currently working as fishermen for you?
  7. What recommendations would you make to Khun Kovit for immediate changes? What longer term changes could you plan for?

 

This is a fictional case study.