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Environmental Issues

Question:

Describe about fishing industry and also describe their problem, benefit, strategic response, project options analysis and deliverability or recommended solution?

Blue Sky Fisheries Pty Ltd. is an Australian fishing industry which is based in Adelaide and South Australia. The company provides premium and niche market seafood products to Australian marketplace and international marketplace. The main specialty of the company is sourcing and supplying Australian abalone. The company is well placed in the competitive fishing industry in Australia. The growing population has increased pressure on the company to meet the demands of their customers or clients (ZoomInfo, 2015).

The expansion of domestic market and rise in the demand for the Australian seafood in foreign market has increased pressure on the company to harvest resources in sustainable way. If the sustainable innovation is not applied then it can lead to:

Environment Issue: The depletion of natural resources is hitting hard to the company to fulfill the demand of the consumers both nationally and internationally. The consumer of seafood are affected as due to increase in number of fishing industry, the company is not able to meet the customers’ demand every time and decrease in natural resources is escalating matter (Aiyeloja and Ijeomah, n.d.).

Employee management: The Company is facing stiff competition from its competitors that is affecting the market share of the company. Moreover, it exerts high pressure on the company to make better strategy every time in order to hold and retain the customers (Dahl, 2011). Due to competition, company’s business operation has been affected and employee performance level has declined. Further, this issue is transitory.

Wastage of product: The Company is facing problem from the people that are not effectively engaged in fishing of fish or transportation in efficient way. Therefore, the consumers and fishing industries are most affected along with the natural environment. In order to earn higher money, people sideline the amount of wastage. Further, this problem is escalating that can hamper the nature and people in long term (Biggs, 2011).

Environmental Issue: It is a major issue for the fishing industry as the global use of the fisheries product has increased to 114.5 million tons in 2008 in comparison to 100.7 million tons in 2002. It can be forecasted that in 2030 the global demand for seafood can increase by 37 million tons. Therefore, it can surely be a great threat for the natural resources and for the fishing industry (Davis, 2011). The illegal catching of fish has increased over the years. It has been found that commercial catch fish are sold by the some people to clubs, hotel, restaurants or private individuals in order to gain higher profit. The illegal activity has increased by 33% in 2012 (Aic.gov.au, 2015).

Employee Management: The Company is facing competition from Allan Barnett Fishing Co. and J. Manias & Co. In the year 2010, Blue Sky sales declined by 2% in 2009 whereas its competitors were able to increase their sales by 2.7% and 3%. Therefore, in order to remain in the race the competitors train their employees so that their sales and income can be increased (Dixon and McGregor, 2011).

Employee Management Issues

Wastage of product: In the year 2010, the company has wasted around 30% of the fish product which shows the improper management-ship of the company (Greenfacts.org, 2015).

The government can play important role in checking the fishing issues and problems for the environment and global market. The government can impose various regulations over the percentage of fishing so that sustainable environment can be maintained. On the other hand, government can pose penalties if they find that overfishing is done in spite of warning. In order to sustain the natural environment and its species, the government has to take steps to generate a better and sustainable environment (Hallwass et al., 2010). This would help in providing better world to the people.

Apart from that, if the proper are steps are not taken in right time then it can decrease the level of service and the consumer may not be able to fulfill their demand for seafood or fish product. Moreover, if government fails in implementing the strict rules then it can increase the level of illegal fishing and there can be time when there will be no fish in the lakes (Palomares and Pauly, 2011). On the other hand, if response is delayed then it can lead to a wide gap to operate the proposed amendments. The customers can be charged high price for the sea products that can affect the economy of the country. Therefore, solution has to be implemented on accurate time so that all the process can be carried in legalized form (Oecd.org, 2015).

The illegal catch of the fish is a major issue outside of the Blue Sky as well. The local fishermen are having problem as they are not able to acquire right percentage of fish due to illegal behavior of catching fish. The sale of the local fishermen in Adelaide has decreased that made some fishermen to adopt illegal activities. Therefore, the issues of local fishermen can be addressed in the proposal so that best solution can be predicted that can benefit both the company and local fishermen (Pcfisu.org, 2015).

A better sustainable innovation environment can be gained if the natural resources issues are resolved. Moreover, it can help in enhancing the quality of environment and natural resources can be kept safe and pure. The investment in the making natural resources sustain and survive can have a long term impact and people can be able to see number of fish (Pearce, 2005).

On the other hand, in case of growing employee management issue among fishing industry, the Blue Sky Company can be able to meet their requirement of having fish or sea product in maximum quantity. This would help the company to survive in the market place (Rizzuto and Soares, 2012). The company can make investment to build better organizational system in order to preserve and store the sea food for a period of time.

Apart from that, the solution to the wastage problem can be put to an end. This would be effective in ensuring large number of fish from rivers. The company can be able to provide quality and delicious seafood to the society and it can help in increasing the customer engagement (Seitz and Hite, 2011). Moreover, the local fishermen can be able to carry on their activities with much easy approach.

Wastage of Product

Therefore, the solution to the problem would help in increasing the GDP of the country and it can increase the economical value of the company. On the other side, the company can be able to largely contribute towards the society and increasing their living standard (Donaldson, 2011). Lastly, the impact of the solution can be on the environment that can be effective for the people to have sustainable environment. Apart from the benefit, the company may not be able to increase their profit if government imposes harsh legislation and regulation on fishing and it can lead to increase in price of seafood (Ctb.ku.edu, 2015).

The government and organization can get large benefit for the investment. The company can be increasing their level of fish storage and they can supply required of quantity to the consumers. On the other hand, the company can increase the sales rate and earn better income. The investment in natural resources can help the government to safeguard the natural resources and monitor the depletion rate of fish in the lakes or river. Further, it can help the company to achieve sustainable environment and better reach to the natural resources without affecting the natural environment (Graf and Kimms, 2011).

The negative effect of employee management by companies on the fishing can be checked and government can be able to track the companies that are not abiding the rules that are laid down in context to employee. Moreover, it can be positive for the company to have an equal chance of fishing and collecting the fish from the river (Greene and Kirton, 2011). Therefore, it can help in providing better competitive environment.

Lastly, the investment in controlling wastage can be effective for the government to achieve better economic environment. The implementation of sustainable fishing can help in protecting the livelihoods of the people. Moreover, on the part of company, it can help in promoting sustainable fishing and can fulfill the nutritional needs of the people (Hallwass et al., 2010).

Environmental Issues: It can be found that implementing the solution to the respective issues has helped in improving the marine ecosystem. The people are more careful towards the natural environment and focuses to have less destruction of the natural resources (Holland, 2007). The company is able to use the natural resources in efficient manner that is helping in making people aware about the benefits of having natural resources.

Employee management: It has been discovered that number of workers have increased their performance and are engaging in company’ activities. Therefore, company is able to engage around 10 million tons of fish from the ocean in the year 2011 (Kumari et al., 2010). Thus, company is able to export fish to foreign market as per requirements.

Wastage: The workers doing unethical activities and not controlling wastage can be checked and it helped in decreasing the level of wastage. Therefore, it helps in increasing the efficiency of the company and it increases the productivity of the company (Malakoff, 2011). The overfishing level has been decreased by 40% and people have become more responsible towards the natural resources.

Government Regulations and Sustainable Fishing Practices

The major interdependency that relates to benefit delivery is using other existing proposals so that better solution can be gained in order to solve the arising issues. The management of the company can adopt the decision that is made by US government to improve the fishing industry (Rizzuto and Soares, 2012). Moreover, the companies can reliance on the step taken by Marine Publications Pty Ltd to improve their business operation and supply better quality of product to customers.

The company has to adopt strategic action so that rising issues can be resolved. Therefore, in order to sort out the issues, strategic response can be:

Plan: The Company has to plan from the very first stage to assess the potential issues so that strategy can be made. The management can engage employers and employees for formulating plan.

Risk: The risk associated with the particular strategy has to be assessed in order to know the level of risk that may need to be handled while operating with such strategies.

Organizational Culture: The management has to understand the internal culture whether the chosen strategy can be helpful in achieving the long term goal or not.

Workers Attitude: The behavior and attitude of the workers or employees has to be understood so that better strategy can be implemented and better productivity can be gained.

Social Support: The support from the society can be helpful for the company to solve their problem and provide better service to customers (Pearce, 2005).

Regulation: The Company may need to improve their regulation relating to transport, production or relating to employees so that better work environment can be generated.

Policies: The policies can be developed in order to sustainable growth and attaining sustainable environment in fishing sector. It can improve the business operation (Tietze, 2011).

Foster Innovation: The Company can implement innovative ideas so that quality fish product can be developed and supplied and also wastage can be reduced.

The strategic options can be effective for the Blue Sky to achieve better growth and increase their sale to domestic and international market. On the other hand, the options can be helpful for the company to solve the internal and external issues and generate feasible and effective work environment (Uwah et al. n.d.). The company can be able to develop sustainable environment and reduction in wastage.

The interventions can be valuable in changing the behavior of employees to have a positive attitude towards the work. For instance, the knowledge and skills of the individual worker can be influenced that improved the performance of the company by 25%. The employees can become more responsible towards environment and customers. On the other hand, the company can provide better social support to the people by promoting educational programs or health promotion campaign (Trujillo and Thurman, 2014). Apart from that, the environment promotion campaign intervention can be effective in making people aware about the natural resources benefit and it can provide knowledge to reduce wastage as it can help in developing better environment.

Issues Faced by Local Fishermen

The company can formulate flexible regulation and policies as it can help in extracting better performance of the employees. Moreover, the employees can become more responsible towards the society and environment (Biggs, 2011). The Blue Sky can be able to fulfill the demands of consumers and can be able to extract the required sea species in order to satisfy the need of customers.

Cost-effectiveness Analysis: This analysis can be effective in making comparison of different alternatives so that expenses can be predicted. The options can be effective in reducing the net present value of costs or increasing the output level.

Multi-criteria Analysis: The suite of various objectives can be dealt that may not be aggregated into a single result. Therefore, in order to use the multi-criteria analysis, the project has to be analyzed whether it can fulfill the requirements of analysis or not (Connelly and Brown, 2010).

Evaluate economic Impact: The impact analysis has been used that deliver economic benefit on the project. The high level economic indicator has been used to assess the strategic intervention so that better result can be gained.

Demand Analysis: The current demand for the seafood has been assessed that helped in forecasting the future demand for the product.  The option has been selected that are more necessary (Daczkowska-Kozon and Sun-Pan, 2011).  

Review of staff requirements: The right number of staff has been selected that helped in carrying the project in effective manner. The training needs and role requirements has been focused so that job can be assigned.

The major stakeholder that are related with the project options are marketer, human resource management, statisticians and financial advisers. The financial adviser will help in studying the cost-effectiveness of the project so that cost can be analyzed. On the other hand, the statistician of the company will help in performing multi-criteria analysis by segmenting the number of options on the basis of similar objectives. The financial analyst can help the company to know the economic impact on the performance or vice versa (Donaldson, 2011). The marketer will assist in providing information about demand for the product so that sales can be forecasted for future. Lastly, the human resource management of company can deliver skillful and capable employees that can help in increasing the productivity.

The proposal can be effective in providing better social system. The company can be able to provide quality service and better quality product to the society or consumers. The scale options can be effective in providing better facilities to society and meeting their needs (Ellerup Nielsen and Narreklit, 2011).

Environmental Impacts

The options can have positive impact on the environment. The company can be able to generate environment that can be beneficial for the internal and external people. The Environment Law laid down by government has to be followed along with Health and Employees Law so that they can comply with the current environment and carry on their activities in productive manner (Malik, 2011).

The options can have large impact on the economy that can improve the quality of the system and can increase the productivity that can help in increasing the GDP of the country. Moreover, the employees can be motivated effectively to participate in the company’s decision making process or deliver best ideas that can best suit the requirement of company (Navia and Heipieper, 2011). On the other hand, company can be able to provide employment to the people that can be effective in reducing the unemployment level and increasing the standard of living of people.

Conclusion

The company can be able to supply better social and economic environment that can help in increasing the profit and market share of the company. The company can deliver better quality product to the society and standard living (Palomares and Pauly, 2011). On the other hand, it can be useful in providing sustainable environment and pollution free that can improve the health of the people or workers.

Cost

Amount ($)

Storage Cost

40000

Labor Cost

80000

Material Cost

35000

Raw material Costs

30000

Supplier Costs

10000

Administrative Costs

50000

Inspection Charges

4800

Training Cost

4000

Machine Installation Cost

15000

Utilities

2000

License Charge

10000

TOTAL

280800

The company can be able to store the fish product till the time of its consumption and it can help the company increase their sales and income. On the other hand, the company can fulfill the demand of the society for seafood. On the other hand, meeting the cost of supplier, the company required quantity of fish and raw materials for proving quality product to customers (Pcfisu.org, 2015). Moreover, the skills of the worker can be developed and better productivity can be generated that can contribute in improving the growth rate of the company.

In order to gain an estimate that can be used for the project, net present value estimation can be effective. The npv can be useful for the company to make decision and decide future budget in order to conduct the business operations.

Project option 1: Do Nothing

Project option 2: Do minimum

Project option 3: Do something

Project option 4: Do maximum

Project option 5:

Analysis Period (years)

5

5

5

5

5

Capital Costs ($m)

2500

2808

2997

3350

3000

Output Costs ($m)

1800

2100

2500

2800

2750

Cost-Benefit Analysis

Present Value of Benefits ($m)

5100

5700

6300

4752

Present Value of Costs ($m)

4800

5500

5700

4388

Benefit Cost Ratio

1.06

1.03

1.10

1.82

Net Present Value ($m)

5202.48

5662

6765

5752

Preferred option

4

3

3

1

2


Table 1: Results of Option Analysis

Therefore, it can be analyzed that according to option 4, company can be able to generate better productivity after 5 years that can help in achieving organizational goals. The company can recover all their cost and sale rate can be increased. Therefore, the company can provide quality service to customers.

After considering the option analysis table, it can be observed that adopting option 4 can be beneficial for the company, Blue Sky to earn high income after 5 years. The company can be able to increase the sale of fish product by 43% that can ensure better profit and organizational effectiveness (Vasil'ev, 2011). Moreover, various direct and indirect costs can be covered and company can generate better market share. On the other hand, the problem of environment issues can be resolved and company can get required quantity of fish for their business and pollution level from the industry can be resolved. Therefore, it can help in generating better quality product for the customers. Apart from that, company can be able to generate expected NPV if the company is successful in managing employees (Weston, 2009).

Procurement: The PPP procurement approach can be taken in account that can be effective in securing the value for money. The company can innovate and integrate their strategy for gaining development and risk can be transferred effectively. The procurement options range comprises; designs build; design build finance, design build maintain; design build finance maintain and design build finance operate (Ruxton and Hansell, 2010). The DBFM can be effective to improve asset life cycle performance of the company.

Resources Risk: The lack of available resources that is fish can be major risk for the company. The growing fishing industry can deplete the marine life and percent of fish may not be available (Malakoff, 2011). Therefore, the company has to promote the awareness about fishing and company can store the fish product so that wastage can be controlled and resource risk can be minimized.

Competition Risk: In order to combat the competition situation, the company has to provide quality product all the time and the product has to be transported in quick time. This can help in retaining the customers and maintain the market share.

Supplier Risk: If the supplier of risk is not satisfied with the service of company then it can be difficult to negotiate with the customers. Therefore, company has to provide right wages to suppliers for their services (Herpandi et al. 2011).

Employee Risk: If the employee is not able to perform their task effectively then it can decrease the brand value of company. Thus, company may need to provide training or better packages so that they can eject better productivity from workers.

ELEMENT

ESTIMATE

Base cost estimate

$573500

Base risk allocation

$116100

Project cost estimate

$297400

Contingency

$61300

Project Budget

$1048300


Table 2: Summary of project cost

Cost

Estimate

Direct Costs:

Materials

40000

Labour

60000

Plant Hire

100000

Indirect Costs

Recurrent Overheads

Commercial

15000

QA and safety

10000

Project Management Costs

8500

Site Facilities

7000

Plant and equipment

35000

Non-recurrent overheads

Project Insurance

80000

Professional fees

20000

Demobilization and disestablishment

9000

Mobilization and Establishment

35000

Owner’s Cost

Authority Fees

9000

Investigations

5000

Contracted Professional Staff

13000

Land Cost and resumptions

45000

Plant and equipment supplied by owner

15000

Contractors Fee

Profit Margin

37000

Corporate Overheads

30000

Total of Base Cost Estimate

$573500


Table 3: Base Cost Computation

ELEMENT

ESTIMATE

Base Risk Allocation

80500

Escalation

35600

Contingency

61300

Total of Project Risks

$177400


Table 4: Project Risk

Year

Cash Flow

Discount Rate (10%)

Present Value of Cash Flow

1

650000

0.909

590850

2

730000

0.826

602980

3

785600

0.751

589990

4

836600

0.683

571400

5

995100

0.620

617880

TOTAL

2973100

Costs

1048300

Net present Value

 

 

$1924800

In order to fund the proposed project, the Blue Sky can generate fund from various sources:

Banks: The Company can grant loan from the banks such as Macquarie Bank Limited so that the work can be carried forward. Granting loan from the bank is easy and can be paid at regular specified intervals (Hattis, 2012).

Sale of Assets: The Blue Sky can sale their assets that are not in use or unprofitable. The assets can be disposed that provide capital to the company for funding in the project. Therefore, it can help company to achieve the desired target of capital.

Company’s owner: The owner of Blue Sky can contribute major portion of the capital for the business purpose and if company makes profit then it can ensure high income for the owner.

Mortgage: The Company can mortgage their property in order to acquire capital and can release the property when the company makes profit and pays for the profit from earned profit (Gonzalo-Delgado et al. 2010).

In order to gain higher profit, the company has to manage its business activities so that work of the employees can be aligned towards the target. The senior management of the company has to monitor the performance of the company and on the other hand the production manager has to check the availability of raw materials or any other requirements so that production can be management and availed in right time with least amount of wastage (Greene and Kirton, 2011). The management has to communicate with the stakeholders of the company so that better decision can be made. Apart from that, the strategy has to be made for managing project so that it can be assessed on every stage of development and error can be removed.

Blue Sky in order to bring productivity, it has to implement change management strategy so that operation can be conducted on successful note. The employees can be retrained and supply chain management can be re-engineered so that better service can be provided to customers (Hallwass et al. 2010). On the other hand, the performance measure has to be adopted for assessing the quantity and quality in order to deliver higher and quality productivity to nation.

The Blue Sky Company has to be ready and has to be attentive to make transition of investment in correct time so that chain of operation does not stop. The alertness of the company can help in tackling the possible challenges related to sustainable innovation programs. The company has to resolve all the issues relating to staffing so that better working staff can be engaged in the next step of operation (Kumari et al. 2010). The job has to be made understood to the staffs so that they can carry their work in respective manner. Therefore, if the company succeeds in their approach then it can help in achieving the sustainable innovation environment and better employee engagement.

The program that are not resulting beneficial for the company has to be eliminated and better program has to be built in order to attain the desire goal. For instance, if the businesses not doing well, the acquisition exit strategy can be effective to remain in the marketplace and operate the business as it can allow having good money to clear debts. On the other hand, the company can be able to minimize their risk of loss and company can be able to organize their business operations effectively (Palomares and Pauly, 2011). Apart from that, if a sustainable innovation program fails the alternative programs can be helpful as it can help in protecting to suffer any big loss.

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