Mia philippines Essay

The Filipinos was beginning(a) put on the map by Lusitanian adventurer Magellan triming for the Spanish thr ace on March 16, 1521. The Philippines had snuff it a Spanish colony and was the first ground to be named aft(prenominal) a sovereign, Phillip II of Spain.1 Spanish rule had continued until 1898 when the Philippines had be recognise an American colony fol haplessing the Spanish-American War for the stately sum of $20 million. In 1942 during WWII, the Philippines had fallen under Japanese occupation and was liberated by American and Filipino crushs under the leadership of General Douglas MacArthur in a ferociously contested battle that raged on between 1944 and 1945.The Philippines had attained its independence on July 4, 1946, and had a functioning democratic system.2 The Philippines Archipel past consisted of 7, ascorbic acid is discharges, covering an area of 299,735 cosmos square kilometers and was just ab unwrap extensiver than Arizona. The capital city of pi eceilla was situated on the largest Philippine is take down of Luzon (see shew 1). The Philippines had a gross domestic result (gross domestic merchandise) per capita of $3,400.3 The perpennyage of the commonwealth of the Philippines confirm below US$2 a mean solar day was 45.2 perFilipino BUSINESS ENVIRONMENTResearch conducted in 2009 showed that the Philippines was ranked 140th for facilitate of doing fear and 155th for starting a phone line, out of a keep down of 178 countries. It took on average 15 procedures and a total of 52 eld to pick out business startup procedures in the Philippines compared to six procedures and 44.2 old age and 5.8 procedures and 13.4 days for the same assist in Asia and Organisation for Economic Coope dimensionn and Development (OECD) countries, extolively.5 The Philippines had the succor lowest savings and investment as share of GDP ratio in Asia6 (see bear witness 2).PHILIPPINE FISHING INDUSTRYThe Philippines has total territorial p iddles of 2.2 million square kilometers, of which coastal waters stage 266,000 square kilometers and coastal reef area (10 to 20 fathoms deep, where reef seek takes place) comprise 27,000 square kilometers.7In 2003, the Philippines ranked eighth among the top visualize for-producing countries in the serviceman with its total action of 3.62 million deliberate tons of tilt, crustaceans, mollusks and aquatic plants (including seaweed). The production constituted 2.5 per cent of the total world production of 146.27 million metric tons.8The sportsport look for industrys contribution to the countrys GDP was 2.3 per cent and 4.2 per cent, at current and constant prices, respectively. The industry employed a total of 1,614,368 sportsport searching operators nationwide,9 of which the artisanal tilteries sector accounted for 1,371,676.10 Artisanal weighting operations were typically family-based and utilise weensyer craft. there were a total of 469,807 angleing sauce boats in th e Philippines, of which 292,180 were non-motorized and 177,627 were motorized.11 lean was non scarce an important source of nutrition, but as tilting did non require landownership or special permits it was an employment of last vivify for people who had no separate promoter of subsistence.MIA, DENMARKMIA was ceremonious in Denmark in 1975 by wealthy businessman Hagen Nordstrom, who dedicated the NGO to his wife Mia and do fighting pauperization his lifes work. (MIA stood for beloved in Danish.) MIA had ab initio cogitate solely on poverty-alleviating visualizes in Africa and had expanded its operations to Latin America and the Caribbean only in the archeozoic 1990s.The grandson of Nordstrom, Gillis Nordstrom, had interpreted over as MIA chairman in 2004 on the eve of the Bander Aceh Tsunami of December 26, 2004, which devastated Southeast Asia and killed as many as5www.doingbusiness.org/ExploreEconomies/?economyid=153, accessed November 15, 2008. www.adb.org/Documents /Books/ADO/2002/Update/ado2002update.pdf, accessed December 18, 2008. 7www.scribd.com/doc/354869/2005-fisheries-Profile, accessed December 5, 2008. 8www.scribd.com/doc/354869/2005-Fisheries-Profile, accessed November 15, 2008. 9NSO 2002 Census for Fisheries.10www.scribd.com/doc/354869/2005-Fisheries-Profile, accessed November 15, 2008. 11www.scribd.com/doc/354869/2005-Fisheries-Profile, accessed December 5, 2008. 6 page 39B09M016130,000 people.12 Nordstrom had interpreted initiative and re speaked MIA to focus on disaster recovery and poverty alleviation sheds in Southeast Asia.MIA had established an office in capital of the Philippines in January 2006, and the young Danish development economic expert Borje Petersen was hired to allot the MIA Philippines office. Petersen was paid a starting salary of $75,000 a year increase housing, slightly below average for a comparable development economist position. Petersen k red-hot that MIAs attention was foc utilize on Indonesia and Malaysia, which had been the hardest hit by the tsunami, and was sickening to carve out a position for MIA Philippines by innovationing an particular(a) pouch. As the expansion into Asia was the pet communicate of MIAs chairman, Petersen matte up guarantee that backup would be easily appropriated and charge expedited.Petersen knew that the average overseas post-horse for a development economist for MIA was devil years and had quickly established contact with local anesthetic and international stakeholders and set up legion(predicate) meetings with large development throw counterparts such as the Asian Development Bank, the draw domain Bank and the German development aid government GFZ to get an expedited agreement of the Philippines and its unique admits.Based on the initial research, Petersen had indomitable that, whereas an agricultural project would be feasible, it would take a long time to literalize and the import could be complicated given the Philippine s proneness to be hit by typhoons. Petersens research had revealed that small-scale aquaculture projects had been successfully implemented in the Philippines in the past. How perpetually, in that location were hardly any projects to speak of molded at artisanal fishing and selection up on the vested opport unit of measurementy and his desire to deliver degenerate results and prove himself worthy of the task that MIA and its chairman motivationed, he had chosen to design a project availing artisanal fishermen.Petersen had researched the possibility of helping a fishing crossroads close to Manila and the search for the ideal hamlet had come to a successful ending when MIAs number one wood, Vicente Tubo, had mentioned how some of his distant cousins fished for a living in a fishing colonization seven to ix hours by car from Manila. A factfinding mission to the village Barangay San Hagon was undertaken and the village was indeed chosen as the beneficiary of MIAs pilot pr oject in the Philippines.BARANGAY SAN HAGONBarangay San Hagon boasted 125 nursing homes and had a resident population of625. San Hagon lay on the sulphur coast of Luzon, the largest island of the Philippines. The Barangay was the smallest administrative division in the Philippines and stemmed from the Spanish Barrio.13 Barangay San Hagon was administered by a local government unit (LGU) and consisted of seven Barangay council members and a chairman.The chairman of Barangay San Hagon was Rafael Buenaventura, age 59, who had held office for more(prenominal) than a decade. fish villages in the Philippines were very vulnerable to external risk, especially natural calamities such as typhoons, flooding and fish kills, which severely abnormal their financial situation.www.cityu.edu.hk/searc/tsunami/index.html, accessed November 18, 2008. www.i-site.ph/Factfinder/barangay.html, accessed December 23, 2008.BARANGAY SAN HAGONS ECONOMYFishing was the main occupation of the village. Seconda ry occupations included rice agribusiness, fruit and vegetable growing and livestock raising. The service sector consisted of boat builders, mechanics, barbers, tailors, drivers and Sari-Sari store operators (mom and pop-type convenience stores). Fishing was undertaken maxly by men, whereas most of the early(a) occupations and post-fishing activities were undertaken by the women of the village.The village boasted 12 overseas workers employed as flat laborers in different parts of the Arabian Peninsula who sent back absolution payments. It was believed that more than 10 million Filipinos worked overseas and supported their families with remittance payments. The day-to-day income for the San Hagon fisherman was approximately $1 per day.The fishermen of San Hagon used banka boats, the traditional outrigger type of boat used in Southeast Asia. Whereas some fishermen had utilized traditional means of fishing with hook and line, gill nets and bamboo fish traps, the majority chose to use snow and cyanide fishing. Blast fishing consisted of throwing an explosive charge or a stick of dynamite into the sea. The explosion instantly killed each living being within its range including coral reef. A number of the fish would ball up and the fishermen would scoop them up. Quite a large number of the dead fish, however, would quench submerged.Home adopt explosives from readily available materials such as powdered thousand nitrate or an ammonium nitrate and kerosene mixture jam-packed in glass bottles were often used. These mixtures were often unstable and exploded prematurely, maiming or killing fishermen. from each one village had a number of limbless fishermen and a story of how an explosive device had killed a fellow fisherman.14 cyanide fishing consisted of squirting cyanide into the caves/dwellings of the fish in the coral reef. Fishermen used jury-rigged pumps, which pumped oxygen down a plastic tube, to dive into the sea.The system was dangerous and most fishermen had go done some form of bend small-arm come down. The cyanide killed up to 75 per cent of the fish on contact. Cyanide also killed the coral reef.15 Once the coral reef died, fish were dis put as a result of the break in the food chain of mountains and privation of protection. Blast and cyanide fishing did non need any real skill and fishing knowledge and even though both(prenominal) methods were illegitimate and there were numerous laws in place, it was impossible to effectively enforce these laws.SAN HAGONS CAPITAL ASSETSThe village of San Hagon had prefatorial capital assets on which it based its warlike position. Most fishing villages in the region had similar capital resources. human being CapitalEducation Most of the villagers had some high school education. Skills Fishing and farming skills were learnt from an in buckram vane of fellowvillagers, friends, etc. 14www.panda.org/about_wwf/what_we_do/ nautical/problems/problems_fishing/destructive_fishing, acc essed December 24, 2008.15www.panda.org/about_wwf/what_we_do/species/news/stories/index.cfm?uNewsID=5563, accessed December 23, 2008.Page 59B09M016 work Most villagers had multiple occupations in order to generate enough income to bemuse a living.Social CapitalAccess to governmental and non-governmental information sources The village had limited access to governmental and non-governmental organizations for the dissemination of knowledge. Information was disseminated from an informal network of fellow fishermen, friends and relatives. Role of women The women of the village were active in the work force as a source of free labor but had poor decision- qualification power.Natural CapitalAccess to natural resources The villagers had free access to the ocean, land and water. Resource ownership Nearly all villagers owned their small plots of land where they farmed or raised livestock.Financial CapitalAccess to financing The village had limited access to human beings or private financ ing. Savings potential drop The villagers had limited savings potential due to their limited income. Income generation The subsistence fishing,farming and livestock raising activities of the village coupled with services provided by the villagers allowed for subsistence living conditions. Remittances The village had 12 overseas workers who regularly sent remittances to support their families. somatogenic CapitalAccess to electricality The village owned an old diesel engine engine generator that provided electricity. The generator mandatory frequent maintenance work and was out of commission frequently when there was no money to purchase diesel fuel. This occurred due to lack of income as a result of poor fishing results, increased expenditures during the calendar calendar months when school-aged children needed supplies and in quantify when collecting past dues owed by households became a problem.Access to modes of communication Due to its remote location and small population, the village did not pose access to phone lines or piano tuner phone service. The nea backup phone line was located in San Jose, a large settlement that was triple hours away by car.Access to carry-over San Hagon only had internal dirt roads and road access was a problem, especially in the rainy season. Roads connecting San Hagon to the outer world were generally unpaved and it was difficult to navigate the roads at night or during the rainy season, which was five to six months of the year. Manila, the capital of the Philippines, was located seven to nine hours away by car.Page 69B09M016Whereas most people in the village walked, the bicycle/tricycle was the preferred mode of transport. The break-off households boasted small motorcycles, of which there were more than a dozen. Transport to and from the village was provided by a Jeepney (an widen U.S. military jeep left over from WWII), the traditional form of public transport in the Philippines operated by one of the villag ers that usually left for San Jose early in the morning and produceed in the laternoon. Jeepneys transported people, fruits and vegetables, livestock, etc. 16Access to good water fork over The village did not have overstepning water and depended on numerous deep unclouded water wells for its raw water bestow. Home ownership More than 95 per cent of households owned their own dwellings. The better-off households had cement walls and galvanized weight-lift planer roofing. Boat ownership Banka boat ownership was close to 100 per cent. Approximately one third of these bankas were motorized. an some other(prenominal) Most households owned modest household appliances and facilities, such as televisions, radios and electric fans.EXISTING MODUS OPERANDIUnder the prevailing conditions, fishermen would put aside enough to run their families and sell the rest of the project at the village square or exchange it against fruits, vegetables, rice and other staple goods. The price o f fish was not fixed and would fluctuate when there was an oversupply and the barter equivalent of other products would go up in price. Prices of fish and other goods were also affected by delays in the arrival of supply jeepneys, which supplied the villages three Sari-Sari stores.Commerce with other villages was limited, as these villages had a similar economic setup. a a few(prenominal)(prenominal) buyers ever came to San Hagon due to the remoteness of the village and the poor road conditions. The few that came were treated suspiciously, as there had been numerous occasions when smaller buyers had taken the fish on consignment but had not paid for them. The larger traders avoided San Hagon completely and opted to do business with villages that were more accessible.Fish was an easily putrefiable commodity and transporting fish for more than a couple of hours without refrigeration or cold storage was not possible due to the prevailing heat. at that place was no access to ice in the region and the personify of a refrigerated vehicle was beyond the villages means. Some fishermen chose to modify excess fish and sell it locally, even though dried fish made less profit than cherubic fish, or consume it themselves when fresh fish supplies were low. purge though the villagers complained at times, they had accepted the lifestyle they led, as they did not have the financial means or knowledge to wangle their situation. The only other alternative was to leave the village, migrate to larger cities and look for jobs, of which there were only low-paying, menial ones. The mantra, Give a man a fish you have fed him for a day. Teach a man to fish and you have fed him for a lifetime, had become a ingenuousness when MIA had chosen to help the village of San Hagon.The village inhabitants had seen the effects of NGO assistance and how it had alter the livelihood of other fishing villages. The appearance of a European NGO was a blessing and meant an influx of muchne eded money.DIVING VILLAGES AND ENVIRONMENTAL apologyA number of fishing villages in the region had made the rebirth from fishing village to diving village with the help of foreign NGOs. dive villages were villages that catered to the scuba diving expat community and wealthy Filipinos who could afford the sport. Fishermen in these villages had been transformed into tour guides and diving instructors. The transformed villages earned up to 10 times more income and helped to protect the milieu. calculate SAN HAGON HITTING MANY BIRDS WITH ONE markAfter initial assessment and consideration of its own capabilities, MIA had considered converting San Hagon into a diving village. Petersen, however, had later shied away from a tourism-related project for three reasons1. Competition There were already two villages in the region that had already achieved name science and were much easier to access than San Hagon. 2. Damaged product A significant segment of San Hagons coral reef had bee n damaged. 3. Time factor It would take a long time to transform San Hagon to a diving village. Instead, MIA had de sign-language(a) a project that would entail the livelihood advantage of the village, empower women and encourage environmental protectionism. Petersen had remembered the old Danish saying hit many birds with one rock-and-roll as he designed the project. picture IDENTIFICATIONMIA had proposed that in fork up for stopping blast and cyanide fishing and reverting back to traditional means of fishing, the village would receive a grant to establish a fishing co-op, construct a fish processing/ accommodative grammatical construction with all office furnishings and receive a new diesel generator, fish processing equipment, forwarding equipment and training on how to process and pile fish.In addition, MIA would copyright a brand name for the village, have all exchange communication materials prepared and arrange ledge space as the exclusive supplier of malls and superma rkets in subway Manila. It was foreseen that reverting back to traditional methods of fishing would decrease the amount of fish that were caught, but establishing San Hagon as a direct supplier to large buyers would garner top prices and substantially increase income and get-go any losses.MIAs project intended to emphasize the importance of fish as a healthy food, and highlight fishing as a generator of employment and income and as a means to protect the environment (see Exhibit 3).PROJECT IMPACT ASSESSMENTEconomic Impact The business model would allow households to increase their income from $1 to $4 per day. Fish that was not in demand by the cooperative could be used for household consumption or exchange/bartered/dried.Social Impact Women would become a part of the workforce and earn salaries for the first time in their lives and have disposable income. The extra income would also help women become more independent. environmental Impact The destructive blast and cyanide fishin g methods would cease. This would halt the wipeout of the coral reef and help increase fish stocks. Fishermen would become environmental conservationists and promote the concept of sustainability.PROJECT PREPARATIONA knowledgeable and experienced team was assembled to manage project San Hagon. Ricardo Perez, age 65, was hired to head the local team, help with local authorities and overcome language barriers. Perez had worked as a marketing director for the San Miguel Company, a large Philippine conglomerate with a focus on the food and beverage industry, who were the makers of the famous San Mig beer. Perez had been consulting with small- to mid-sized Filipino companies ever since he retired at age 60. MIA also planned to rely on its extensive database and intranet to share knowledge and achieve maximum participation in the project.Any MIA employee, regardless of rank, experience and location, could comment on projects online. Petersen posted a Gantt chart and encouraged questions and guidance from his peers (see Exhibit 4). The only restriction placed on the project by MIA was that MIA could not engage in direct or indirect payments according to its by-laws.Three-year financial projections for the San Hagon Fishing Cooperative (SHFC) had shown that the project would make a small profit in year one and then realize its full potential in year two and year three once the learning curve constraints had been overcome (see Exhibit 5).PROJECT APPROVALMIA Philippines had completed project preparations and gotten project approval and funding from MIA headquarters. The project was a first for MIA, as the NGO usually focused more on gender and education projects.Perez and his team had prepared the covering program for local approval and had submitted the application to the local Fisheries and Aquatic Resources Management Council (FARMC) in San Jose for approval. The FARMC was the policy fashioning body for the fisheries and aquatic resources of the Philippines. The vetting process by the local FARMC had been completed after two months, after numerous on-site meetings and presentations. Petersen had been frustrated at the drive of the approval process and had order Perez to intercede frequently. Petersen had thought to himself, We are extending a grant and transferring knowledge and still there is all this slow-moving bureaucracy to deal with.Concurrently with the project permit applications, MIA had conducted one month of catch research in San Hagon to determine the quantity of fish caught by the fishermen. The review had revealed that it would be possible to catch on average 1,250 kilograms per day (2,750 pounds per day) of efflorescence quality fish for processing.PROJECT SAN HAGON VALUE cosmic stringMIA had undertaken a encourage chain analysis of the project process and assessed how the analysis could be used to improve the project performance (see Exhibit 6). Breaking down the damage structure had yet revealed that the cost struc ture was typically top-loaded by ingoing logistics and that the major expenditure was fuel (see Exhibit 7).PROJECT START-UPPetersen had felt that the slow application process had cost MIA too much time and he had decided to do things the Danish way at the project implementation phase, ingraining tight controls, frequent meetings and time management to speed up the project.MIA had reason out that the key success factors were toProvide grants to acquire new assets.Transfer knowledge and train stakeholders in acquiring and maintaining new capabilities. Increase the value chain contribution of San Hagon villagers. Package and transport a differentiated product to urban centers where there would be demand for the product.Two teams were formed and the work was dual-lane up as follows Team One Product development and promotional materialTeam Two Transportation, distribution, and advertising and promotionProduct Development and advancementTuna, prawns, lobsters, groupers and crabs were chosen as the product types that would be most in demand in Manila. Focus was to be placed on tuna fish and grouper fish, the two favorite types of fish in the Philippines.Research had determined that the demand in Manila for chilled, packaged fish fillets was similar to demand in American/European urban centers. The product appealed to the A income level upwards mobile, health-conscious customers that had time constraints. Concurrently the team had researched basic packaging machinery that could be operated and retained under adverse climatic conditions with ease by the fishermen. The packaging machinery, along with stainless steel fish processing work stations and other equipment, was purchased by MIA, transported and set up in San Hagon.Page 109B09M016Transportation, Distribution, and publicise and PromotionA small refrigerated transport was leased for a year along with a driver to transport the catch from San Hagon to Metro Manila. It was planned that the cooperative would generate enough cash to purchase the motortruck in due time and that a San Hagon villager would be employed to deputize the hired driver in the near future. The team had come up with the brand name ISSAGA, which in the local Tagalog dialect was short for Isda Sakdal Gawad or most-prized fish. ISSAGA had been registered as a brand name, art work had been designed and packaging materials and labels were printed.Petersen had personally helped with the marketing arrangements, and the venerated HUI malls and supermarkets in Manila had agreed to support the project and provide free shelf space. Petersen had met William Hui, a leading businessman of Chinese decent, at a social function at the Danish embassy. acquiring shelf space in a Manila supermarket was in itself a abundant feat, as acquiring retail space in Philippine supermarkets was difficult, time consuming and expensive.HUI malls had also agreed to promote ISSAGA branded fish products at points of sale. Hui, Perez and countles s others had called in favors, and Manila TV stations, newspapers and magazines had agreed to support the project and showcase their corporate social citizenship by providing free pubic relations. The project would streamline the distribution cycle and increase profit margins for both supplier and buyer (see Exhibit 8).With most of the work at the disappoint end of the distribution chain completed, the focus had been shifted to the top end and MIA had say the fishermen of San Hagon to form a fishing cooperative. MIA and other stakeholders needed a formal counterpart they could address and it was hoped that being part of a formal organization would instill a sense of ownership and result in load and responsibility on the part of the villagers.SAN HAGON FISHING COOPERATIVEChairman Buenaventura was chosen as the president of the newly formed SHFC. His two sons-in-law were appointed as manager and as treasurer of the cooperative, respectively. A basic contract was signed between MIA and the SHFC depicting the scope of the project, registration of fixed assets and depreciation scheduling.MIA insisted from the incursion that all fishermen join the fishing cooperative. One hundred per cent membership to the fishing cooperative was important because 1. It was necessary to aggregate the catch of the village to make it feasible for the catch to be exchange to the buyer HUI malls.2. MIA precious all stakeholders in San Hagon to benefit from the poverty-alleviation project.STAKEHOLDER CONFLICTMIA had initially donated $5,000 to the cooperative, and a basic building large enough to house the fish processing and packaging line, with cement walls and a corrugated steel roof, was quickly constructed. The building work was done by the villagers, who received a wage in return for their labor.The first disagreement had occurred when Buenaventura had insisted that he receive $150 and the other cooperative employees receive monthly salaries of $100 as remuneration for th e work that they would provide. MIA had initially balked at the salary demand and had threatened to call off the project. Buenaventura had, however, remained coherent and Petersen, after two weeks of deliberations and absolute inertia on the part of the villagers, had directed Perez to negotiate the demand in an attempt to rescue the project. An agreement for $100 a month for Buenaventura and $65 for his sons-in-law had been thus reached to be paid for the duration of a year.The next conflict had arisen when Buenaventura did not want to fully display how much it had cost to build the cooperative building. MIA had later learnt that Buenaventura had thrown a fiesta, a Philippine celebration that included free drinks and lechon pork join on charcoal, to celebrate the new building. At this stage, Petersen had started to wonder if he had made a serious mistake in choosing San Hagon as the pilot project and Perez as project manager.Afraid of the consequences to his career if he termin ated the project, he had decided to push on even if it meant accepting additional demands. Demands for help were frequent. Villages neighboring San Hagon had hear about the project and the MIA office received numerous phone calls day-by-day asking MIA to extend its help to other villages. MIA had been reside turning down the inquiries, citing limited resources. Time was a resource of which Petersen did not have plenty.He was often frustrated at the speed at which things happened in the Philippines. Project manager Perez seemed competent enough and had vast amounts of experience and was technically adapt. He couldnt decide whether the slow progress was a result of Perezs speed or the inability or involuntariness of the San Hagon cooperative council to hurry things along. His frustration increased, as with each passing month he was not able to report progress to MIA headquarters.Mindful of his stand up at MIA Denmark and in his quest to speed up theproject, Petersen had started to adopt a more confrontational approach, especially at the each week project coordination meetings with Perez and the rest of the team. Perez always reported how much progress they were making. Perez and the rest of the team interminably assured Petersen that this was how business was conducted in the Philippines. Petersen was tired of hearing this. The other stressful problem was that the word no did not exist in the Philippine language.It was considered rude to say no and hence either question and every inquiry got a positive answer. There were, however, different shades of yes, with some meaning no, some meaning maybe and some which really meant yes. It had taken Petersen more than six months to figure this out. He instructed all his employees not to encounter embarrassed to say no to him.But that had only resulted in further embarrassing his employees. He sometimes felt that he was getting nowhere. With only the one active project to show for, Petersen needed to quickly compl ete this project and start new projects if he was to stand a prospect of getting promoted and assuming greater responsibilities in a bigger MIA office. running(a) at MIA had begun to feel like a tug-of-war between himself and the Filipino staff, with Petersen toilsome to quicken the pace and the staff retardent him down at every turn. Petersen wished that Perez would take more initiative and use his decision-making power rather than run even the smallest decisions by him first. At times he had begun to suspect that Perez was slowing down the project intentionally to keep receiving his salary longer.Salaries in the Philippines were low compared to those in Europe or America, especially in retirement, and after making $1,000 to $1,500 as a marketing director in San Miguel, Perez was only making $300 in retirement. The $700 salary MIA was paying him was quite a advance to his income.Perez had felt that he urgently needed to complete the project. He had chosen to continue workin g well into retirement, as his pension payment was not sufficient enough to maintain his lifestyle and put his youngest daughter through college.Perez had completed his bachelor of arts degree at the University of the Philippines, and had obtained a prestigious certificate for food service management at Cornell University, New York, join States. He had interviewed with MIA and accepted its job offer, because foreign NGOs usually paid better than their Filipino counterparts and, more importantly, on time.Before retirement, Perez had managed more than 175 employees. notwithstanding though the San Hagon project was basic compared to what he was accustomed to managing and even though the MIA country manager was young enough to be his son, the pay was generous. Perez had seen himself as advisor and mentor to the young Petersen and had tried to show him the way business was done in the Philippines. He had interceded frequently to expedite the permission process and facilitated MIAs dea lings with the San Hagon fishing cooperative.True to Philippine culture, Perez had always shown the completion respect for Petersen, especially in public, and portrayed him as the all-powerful leader of MIA. Having young Petersen make all decisions had been a part of his show of respect and deference to Petersens authority. Young Petersen had, however, been difficult to deal with. The whole project had taken an unpleasant turn, as Petersen had gotten extremely confrontational at meetings. Perez had heard about the difficulties of working with Americans and Europeans.Filipinos did not like confrontation. Pakikisama (group loyalty) and the importance of maintaining social unity were a part of his management style and disagreement or social tension of any sort at the workplace was extremely queasy for Perez. Petersen had caused him hiya (embarrassment) in front of the rest of the team. His team, while staying silent during meetings, had approached him afterwards and empathized with him.Perez had felt elated when the planning stage was over and the project had entered the implementation stage, which was more in his comfort zone. Perez had designed the new product-to-market process and ensured that he would send packing most of his time out of the office and avoiding Petersen.NEW PRODUCT-TO-MARKET PROCESSDeboning, Filleting and promotionIn order to add value to the product and to offset the cost of cleaning and filleting the fish at a higher cost by HUI employees, it was planned that the deboning, filleting and packaging would be done in San Hagon. The cooperative had called upon the women of the village who were experienced in preparing fish to help with processing the catch. It was planned that women in the village interested in the opportunity would be paid in return for the quantity of fish they processed.If demand for the work outweighed supply, there would be a waiting list and all interested women would get their casualty to earn extra income when the ir turn came. Once deboned and filleted, the fish would be individually packaged in sealed cellophane packets and packed in 40 kilogram containers.The SHFC encouraged all fishermen to bring in their catch to the cooperative early in the morning, where the catch was assessed and weighed according to the product needs of HUI malls for the week. Each fisherman had an account at the SHFC and his account was credited according to the occasional catch brought in. The fishermen were free to do whatever they wanted with the catch not purchased by HUI malls.HUI malls were only interested in selling the finest quality fish in two of their exclusive high-end malls. Second- and third-tier fish were delivered to the remaining five mid-market HUI malls in Metro Manila. As a differentiating factor, the project called for the product to be sold chilled. Upscale customers in Manila preferred chilled and filleted fish because they felt it was safer than fresh fish and easier to prepare.Storage a nd TransportTaking into account the problematic supply of electricity and high cost of establishing a cold chain, which would have required a substantial cold storage facility investment in the village, and in line with providing sustainable low technology solutions, it was planned that the fish would be stored in a refrigerated truck which operated its cooling unit 24 hours per day and would be used as both a transport and storage facility. The refrigerated truck would make daily trips to Manila and distribute the product.Sales and DistributionHUI malls had insisted that the allocated shelves be stocked by the San Hagon cooperative. The driver would make deliveries and stock the shelves of seven different HUI malls in Manila. Fish deliveries would be made on a consignment basis and payments based on real sales were to be made to San Hagon on a weekly basis. The model had some problems, as payment by HUI malls was delayed.HUI MALLSWilliam Hui had been one of the facilitators of the project. By providing free shelf space for San Hagon, he had received free public relations and showcased the corporate social responsibility of his company. HUI malls had financially benefited as well, receiving good-quality filleted fish at bargain prices without having to invest in setting up or managing procurement and processing operations. Huis business savvy had become even more apparent when he was approached by a reputable Japanese buyer who had recently purchased ISSAGA fish at one of his malls and had inquired about selling the product in Japan.IMPLEMENTATION PROBLEMSUnder the careful guidance of Perez, the fishermen had conducted the first limited packaging test runs. The process was fraught with problems at first. Deboning and filleting fish commercially was very different from filleting for self-consumption. At first the SHFC had wanted to package all kinds of fish, regardless of size and quality. HUI malls had rejected at least 25 per cent of the initial shipments before the SHFC had bowed to the quality standards set ahead by HUI malls. Spillage and spoilage was another problem. Nearly 15 per cent of produce was lost in this way. This had been due to refrigeration problems and the freshness of the fish.Fish was a sensitive product and had a very short shelf life unless stored properly and it had become clear that not all fishermen brought in their catch in the morning. Sometimes the truck was late in picking up the days catch, which led to late deliveries.Aggregating enough supply to make the business run profitably was an issue at first. Even though all fishermen had joined the cooperative, supply problems due to adverse digest conditions and sometimes due to the complacency of the fishermen had resulted in the shipment truck making a loss nearly 50 per cent of the time.Once the product was on the supermarket shelf however, it sold well. But the process of getting the product on the shelf is inefficient to such a degree that the cooperat ive is making a loss, Petersen had thought when conducting an interim project evaluation.INTERIM PROJECT EVALUATIONPerez had put his vast experience to good use and had intervened to iron out the problems. The logistic problem was solved by hiring two new drivers from the village to man the truck. The initial drivers contract was terminated. MIA purchased and donated a second-hand refrigerated truck body with a powerful diesel-operated air conditioner, which was used to store the dailycatch if the truck was not available to pick up or deliver the product. Perezs interventions had worked and the profits had started to seep in.PROJECT COMPLETION coverAfter a full year of careful scrutiny to make sure the project did not suffer from continuity problems, Petersen had sent in his project evaluation report to MIA Denmark and had lauded the project as a great success.The results of the project had started to show in San Hagon, as most villagers had upgraded their huts to cement-walled, ga lvanized, iron sheet roofed buildings. Most homes had upgraded their TVs and purchased karaoke players to supplement their home entertainment. The most visible improvement was the number of banka boats that were now outfitted with engines.FISH DELIVERIES CEASEMIAs country director, Petersen, was preparing to transfer to MIA Africa when the phone call from HUI malls had come in informing MIA of the discriminating halt in fish deliveries more than a month ago and asking MIA for its help. HUI malls had inferred that they were ready to negotiate with the SHFC to improve business terms if need be.Petersen had unwillingly agreed to send a fact-finding mission to witness what had gone wrong and hired McKenzie to head the fact-finding team, as the initial San Hagon project team had already been disbanded.Page 159B09M016Exhibit 1MAP OF THE PHILIPPINESSourcehttps//www.cia.gov/library/publications/the-world-factbook/geos/rp.html, accessed October 28, 2008.Page 169B09M016Exhibit 2PHILIPPINE S AVINGS AND INVESTMENT AS SHARE OF GDP 1996-2001 intermediate (%) Savings/GDP40.133.545.222.926.119.732.518.926.912.5China, Peoples Republic ofKoreaMalaysiaIndiaTaiwanBangladeshThailandPhilippinesIndonesiaPakistan investiture/GDP37.831.833.42423.721.52820.423.217.1Source www.adb.org/Documents/Books/ADO/2002/Update/ado2002update.pdf, accessed November 18, 2008.Exhibit 3PROJECT SAN HAGON FACT SHEETOBJECTIVES1) Increase $1/day income to $42) Integrate more women into the workforce3) Promote environment conservationPROJECT COST FORECASTprocuralConstructionTrainingSalariesMIA local consultants/monthSHFC management salaries/month$18,0005,0001,5001,500230OPERATIONAL COSTTruck letting/monthTruck driver salary/monthSHFC workers salaries/month give the axe/monthPackaging material/month8503751,0003,500250ADDITIONAL COSTSProcurement $4,000Additional driver salary/monthAdditional fuel/month4,0003751,250EXECUTIONMr. Petersen, MIA director, The PhilippinesMr. Perez, project manager, San HagonPage 179B09M016Exhibit 4PROJECT SAN HAGON GANTT CHARTPage 189B09M016Exhibit 5PROJECT SAN HAGON 3 YEAR FINANCIAL PROJECTIONSYEAR 1255,200236,88012,600249,4805,720REVENUECost of goods soldFixed costTOTAL COSTINCOME BEFORE TAXESNOTE all(a) amounts in US$ at $1=56 Filipino pesos financial year ends December 31Exhibit 6VALUE CHAIN ANALYSISYEAR 2382,800236,88012,600249,480133,320YEAR 3382,800236,88012,600249,480133,320Page 199B09M016Exhibit 7$ (000)VALUE CHAIN COST STRUCTUREPage 209B09M016Exhibit 8DISTRIBUTION CYCLE ANALYSIS