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The present world is full of competition. There is the existence of free market, and it is extremely rare to find an industry that is operating on its own as a monopoly. Individuals are trying to outdo each other in business sectors. Individuals are coming up with innovations, so as to gain competitive advantage due to the high competition. The competition has affected the firms in terms of loss of market share, and companies are constantly making loses. For survival, companies have to look and discover new markets for their effects in various parts of the world. This has resulted to serious concerns of focusing on diversification of business operations.
However, it is necessary for us to bear in mind that establishing businesses outside the home country, presents with a lot of challenges. For instance, lack of better understanding of business culture, lack of the market and hostility. This raises the concern for an investor to come up with strategies to tackle this. The project or business idea will focus on a business opportunity in Africa. The continent has a lot of unexploited resources in terms of the market and resources. Such resources include but not limited to minerals such as gold, coal, titanium, copper among others, there are also prospects of oil deposits. In addition, we have a lot of unexploited human resources ranging from highly qualified to unqualified labour. Sharp investors should take advantage of the cheap workforce available, and plan on how to diversify operations.
Despite the fact that we want to invest in Africa, there is some need to understand how to cope with the challenges that present themselves on the way. Research has proved that diversity presents both positive and negative effects. From a business perspective, we always aim at gaining the positive impacts and utilizing them to improve on business shortcomings. It is vital to note that, an investor can have a unique idea, but at the end prove unworkable due to lack of proper management of diverse issues that arises. The main focus on this paper will be strategies that are suitable to cope with external and internal diversity. Diversity refers to many differences that exist in the business world. These diversities at times, pose a threat to investors, and this raise the importance of managing diversities, so as to achieve balance and satisfaction to all people.
Country and the Business Idea
The target country is Kenya. Situated in the East of Africa, It is a third world country, but it is making substantial steps of industrialization than its immediate neighbors such as Uganda, Somalia and Tanzania. However, the country faces many problems. For example, lack of energy and fuel. She largely depends on imports such as oil and petroleum products, which are extremely expensive, and this constrains the country efforts to industrialize.
The country has to maintain high safety stocks of oil based products which are at times hard to maintain. They always run out of stocks, and this leads to a lot of loses associated with delayed transportation of industrial materials, thus reduced productivity. This has affected industrialization and development of the country economy at large. The finances that are set aside to fund establishment of new industries are used for other plans such as ensuring that the country has enough fuel. The citizens always face inflated oil prices which make them shun away from buying their own cars. However, the country was among the lucky one in the region with recent discoveries, showing that Kenya has oil potentials at the coast province, and some areas of north eastern province. Kenya does ot have the required resources in terms of skilled manpower and the heavy machinery that are necessary for drilling of oil. This by itself presents an opportunity to invest in the sector.
A smart entrepreneur perceives a problem as an opportunity, meant to provide a remedy for the challenge. The idea is to set up a petroleum dealing company. Its main activities will range from dealing and importing petroleum products. The idea is a unique one, and although there are some investors who are trying to explore the same, they have not made serious progress. The investment will require a lot of capital investment, for the purchase of heavy equipment’s needed. The capital can easily be sought from the locals and through donations. As the opportunity presents itself, it is much likely to be a long lasting solution to Kenya oil crises.
As far as the investor will gain much in terms of profits, the country benefits at large in many ways. This is in terms of job creation opportunities for unemployed Kenyans, and the economy will grow rapidly because of the heavy taxes remitted to the government. The country is also in a position to improve its balance of trade, by exporting oil to other countries. The project will solve logistics problems that arise, when there is an oil shortage. As stated earlier, one of the major drawbacks to industrialization in this country, is lack of fuel and energy, the project will provide a remedy to a lot of problems in many ways The country will be able to produce alternative source of electricity for the industries, through diesel powered engines, which are easier to maintain and run due to reduced cost of oil. This will enable rapid industrialization in the country.
Managing Internal and External Diversities
Foreign investors are likely to experience many diversity issues. Both internal and external diversities are likely to present themselves. Internal diversity refers to differences that exist at the current business environment. Some of the diversities present themselves in terms of differences in cultural practices, language barriers; workforce diversity is also a common one. On the other side, most of the African countries and Kenya included were colonies. The citizens may see the investment as a form of colonialism, and they may have hugely negative perceptions, thus viewing the investor from a negative perspective. In this case, workforce diversity is likely to present itself in various ways such as situations where we have workers with different skills ranging from unskilled and inexperienced workers. Discrimination of workers on bases of gender, age, etc. is also another challenge. In many instances, women workers fall victims of discrimination, and they are not presented with a fair competitive advantage like their male counterparts.
In terms of age, there are situations where young people who possess the required skills and qualifications are left out when it comes to job allocation, instead aged people who do not hold the required skills, are preferred. External diversities will present themselves in terms of the differences that exist from the suppliers since they also come from different backgrounds, cultures, and they also have different policies. For us to run a business, it is exceptionally clear that we need suppliers; conflicting situations with the potential suppliers will make it extremely difficult to operate efficiently especially when it comes to foreign investments. This is a crucial awakener in that it is essential to adjust policies that will be of help in solving these diversity issues. Managing diversity involves cominng up with ways that can help avoid the negative effects of diversity.
Diversity management includes practices that will help us to appreciate differences among different cultures, and persons. We should respect other people’s opinions, experiences and ideas. Many companies have understood the concept of diversity, and they have decided to make it a priority strategy of gaining competitive advantage, over their competitors who cannot manage diversity issues well. Poor management of diversity issues is as a result of existence of weak organization structures accompanied by strong resistance to change. Managing diversity issues is becoming one of the emerging challenges in the current business world. This is because of the existence of extremely many stakeholders in a single business enterprise. As mentioned earlier, companies are trying to diversify their business processes so as to improve their profits. Businesses have to introduce their products to different areas, which are not homogenous.
Investors are most likely to find new customers who have different preferences and tastes, cultures, beliefs, attitudes, religions, social economic status and classes. Sometimes the investors have to abide to some tough laws and regulations which are different from rules in their mother countries. The labor force that they are likely to employ in their operations consist a composition of different categories of people who hold different skills. For example, in this project, many people do not possess the needed experience and knowledge required to handle oil drilling. Sometimes we have to rely on the available labor so as to lower the cost of direct overheads.
One of the many strategies that can be used to manage internal and external diversities is by developing a good management practices. The way the organization views diversity, will determine the likelihood of a company to benefit from the positive benefits of diversity. There should be a management restructuring process, which will aim at improving on how the management handles internal and external diversity issues. The management can handle diversity issues in many ways, by looking for ways that can allow people from different backgrounds to work together with unity.
The management should be given a responsibility of managing the diversities. The management team holds the success of the organization and with regard on how well they will handle diversities, the company is likely to benefit. The composition of the management teams should be a priority issue. We should ensure that different groups are equally represented in the top management. This raises the need to consider gender, ethnic groups and color. The human resource managers should be assigned with a responsibility of ensuring equality and fairness to different groups when it comes to recruitment and employment. There has been concerns that there is no balance of groups found in any certain organization, we always find some groups outdoing others in terms of numbers. This is a serious threat to diversity management.
In some instances, we find that members who are from a minor group disadvantaged and they end up stagnating in their positions without promotion. The management needs to streamline opportunities for all people, by offering promotions to those who deserve, without discriminating anyone because of their differences. Through such actions, the company will gain a good reputation and hence attracting more customers. On the other hand, a healthy business environment where employees feel that they are treated fairly, they gain morale to work for the success of the company, leading to high production.