Decisions in Paradise Paper - Essay Example

Kava is a struggling community that needs the influx of foreign investment in order to jumpstart their economy. A major investment from Capital One in Kava could help reduce the unemployment rate in Kava. Issues There are several issues that must be considered prior to making a full time commitment in Kava. The government of Kava has very limited resources. The company would not be eligible for any economic incentives. Despite the little government support that Capital One would get in Kava the expectations of the government are very high.

The population demographics of the island could hurt the ability of the firm to recruit sufficient workers. In Kava 50% of the population is under the age of 15. Capital one is completely against child labor. “It is estimated that approximately 240 million children worldwide are the victims of child labor” (Sinha, 2007, pg.1). The population of Kava is composed of a wide mix of races including indigenous, Chinese, African, French, and Americans. Such a wide mix of races could lead to issues such as cultural and language barriers.

Another constraint related to the composition of its population is the fact that half the population is indigenous. People that are raised in indigenous tribes tend to have less formal education than people that are raised in the city and suburbs. The economy of Kava is very unstable. One of the biggest concerns regarding Kava is that the region is highly susceptible to natural disasters. The country is a high risk for tidal waves, tsunamis, typhoons, hurricanes, tornados, floods, fires, earthquakes, and volcanic eruptions.

The region is at risk of terrorism from within and outside the country. Kava suffers from human health issues including a high incidence of HIV/ Aids and high risk of avian flu outbreaks. The high incidence of HIV among the population could raise the medical plan expenses of the company. Another potential risk associated with Kava is the threat of oil spills. In order for the company to operate in Kava it would need disaster insurance. Due to the high propensity of the region towards natural disasters Capital One would need to purchase disaster insurance.

If any insurance company is willing to sell insurance coverage the premiums are going to be high. The company would have to create contingency plans in the event of a disaster. The possibility of prolong operational shutdowns is very high. Problem Statement Capital One is interested in expanding in Kava. The company feels that it is important to support the economy of struggling communities. Kava is a community that poses many issues including threat of natural disasters, high incidence of HIV, and high underage population.

A problem statement for Capital One in Kava: Capital One needs to establish a presence in Kava while at the same minimizing the risk associated with the region. Stakeholders Perspective There are many different stakeholders groups that Capital One must consider in its expansion plans to Kava. The government of Kava is an important stakeholder to consider. Kava needs the cooperation of the government in order to get all the permits to create a company in Kava. A second stakeholder group is the indigenous population.

The company must respect the unique culture of the Indian tribes. A third stakeholder group is the American population living in Kava. As an American company Capital One should care about employing American citizens abroad that