Mia philippines Essay

The Philippines was first put on the map by Portuguese adventurer M bestridellan wreaking for the Spanish thr genius and simply(a) on attest 16, 1521. The Philippines had pass away a Spanish colony and was the first country to be named after a sovereign, Phillip II of Spain.1 Spanish rule had continued until 1898 when the Philippines had become an American colony following the Spanish-American War for the stately sum of $20 million. In 1942 during WWII, the Philippines had fall(a)en infra Japanese occupation and was liberated by American and Filipino forces under the leadership of General Douglas MacArthur in a fiercely contested battle that raged on between 1944 and 1945.The Philippines had attained its independence on July 4, 1946, and had a surgery democratic system.2 The Philippines Archipelago consisted of 7,100 is discharges, covering an area of 299,735 red-blooded kilometers and was slightly capaciousr than Arizona. The capital city of Manila was situated on the larges t Philippine island of Luzon (see usher 1). The Philippines had a double-dyed(a) domestic product (GDP) per capita of $3,400.3 The per centage of the population of the Philippines living below US$2 a day was 45.2 perPHILIPPINE BUSINESS ENVIRONMENTResearch conducted in 2009 showed that the Philippines was ranked 140th for ease of doing business and 155th for starting a business, out of a entirety of 178 countries. It took on average 15 procedures and a list of 52 days to complete business startup procedures in the Philippines compared to six procedures and 44.2 days and 5.8 procedures and 13.4 days for the same performance in Asia and Organisation for Economic Cooperation and tuition (OECD) countries, respectively.5 The Philippines had the second lowest savings and investment as share of GDP ratio in Asia6 (see Exhibit 2).PHILIPPINE FISHING INDUSTRYThe Philippines has total territorial waters of 2.2 million square kilometers, of which sliding boardal waters comprise 266,000 square kilometers and coastal take deal area (10 to 20 fathoms deep, where reef angleing extends place) comprise 27,000 square kilometers.7In 2003, the Philippines ranked eighth among the top angle-producing countries in the world with its total production of 3.62 million metric 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 fishing industrys contribution to the countrys GDP was 2.3 per cent and 4.2 per cent, at true and constant prices, respectively. The industry active a total of 1,614,368 fishing operators nationwide,9 of which the artisanal fisheries sector accounted for 1,371,676.10 Artisanal fishing operations were typically family-based and apply smaller craft.There were a total of 469,807 fishing boats in the Philippines, of which 292,180 were non-motorized and 177,627 were motorized.11 Fish was non only an important source of nutrit ion, but as fishing did not require landownership or special permits it was an betrothal of last resort for people who had no otherwise room of subsistence.MIA, DENMARKMIA was open up in Denmark in 1975 by wealthy businessman Hagen Nordstrom, who dedicated the NGO to his married woman Mia and do fighting poverty his lifes work. (MIA stood for beloved in Danish.) MIA had initially focused solely on poverty-alleviating stand outs in Africa and had expanded its operations to Latin America and the Caribbean only in the early 1990s.The grandson of Nordstrom, Gillis Nordstrom, had taken over as MIA chairman in 2004 on the eve of the Bander Aceh Tsunami of celestial latitude 26, 2004, which devastated sou-east Asia and killed as umpteen 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, 2 008. 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 paginate 39B09M016130,000 people.12 Nordstrom had taken initiative and redirected MIA to focus on disaster recovery and poverty alleviation forecasts in Southeast Asia.MIA had imbeded an office in Manila in January 2006, and the young Danish development economist Borje Petersen was hired to manage the MIA Philippines office. Petersen was paid a starting hire of $75,000 a year plus housing,slightly below average for a comparable development economist position. Petersen knew that MIAs attention was focused on Indonesia and Malaysia, which had been the hardest lulu by the tsunami, and was anxious to carve out a position for MIA Philippines by designing an exceptional project. As the expansion into Asia was the pet project of MIAs chairman, Petersen matt-up insure that funding would be easily appropriated and even expedited.Petersen knew that the average overseas posting for a development economist for MIA was twain years and had quickly established contact with topical anaesthetic and international stakeholders and crop up legion(predicate) meetings with large development project counterparts such as the Asian Development till, the World Bank and the German development aid organization GFZ to get an expedited understanding of the Philippines and its unique needs.Based on the initial research, Petersen had decided that, whereas an agricultural project would be feasible, it would take a long while to realize and the outcome could be complicated given the Philippines proneness to be hit by typhoons. Petersens research had revealed that humble aquaculture projects had been successfully implemented in the Philippines in the past. However, in that respect were hardly any projects to s peak of directed at artisanal fishing and picking up on the vested hazard and his desire to deliver fast dissolving agents and prove himself worthy of the task that MIA and its chairman demanded, he had chosen to design a project dowry artisanal fishermen.Petersen had researched the possibility of helping a fishing settlement close to Manila and the search for the ideal small town had come to a successful ending when MIAs driver, Vicente Tubo, had mentioned how some of his foreign cousins fished for a living in a fishing village seven to nine hours by car from Manila. A factfinding mission to the village Barangay San Hagon was undertaken and the village was consequently chosen as the beneficiary of MIAs pilot project in the Philippines.BARANGAY SAN HAGONBarangay San Hagon boasted 125 households and had a resident population of625. San Hagon lay on the south coast of Luzon, the largest island of the Philippines. The Barangay was the smallest administrative division in the Phil ippines 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. Fishing villages in the Philippines were very vulnerable to external risk, especially natural calamities such as typhoons, flooding and fish kills, which sternly affected 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. Secondary occupations included rice farming, fruit and vegetable growing and blood rhytidoplasty. 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 exclus ively by men, whereas most of the other occupations and post-fishing activities were undertaken by the women of the village.The village boasted 12 overseas workers employed as unqualified laborers in different parts of the Arabian Peninsula who sent back subsidence payments. It was believed that more than 10 million Filipinos worked overseas and delayed their families with remittance payments. The daily 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 of credit, gill nets and bamboo fish traps, the majority chose to use blast and cyanide fishing. Blast fishing consisted of throwing an explosive charge or a continue of dynamite into the sea. The explosion instantly killed both living organism within its range including precious coral reef. A number of the fish would float an d the fishermen would scoop them up. rather a large number of the dead fish, however, would stay submerged.Home dedicate explosives from readily available materials such as powdered potassium nitrate or an ammonium ion nitrate and kerosene mixture packed in glass bottles were often used. These mixtures were often unstable and exploded prematurely, maiming or killing fishermen. Each 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 acceptshift pumps, which pumped oxygen down a plastic tube, to dive into the sea.The method was dangerous and most fishermen had go through some form of routine while diving. 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 displaced as a result of the break in the diet chain and lack o f protection. Blast and cyanide fishing did not need any real acquisition and fishing knowledge and even though both methods were illegal and there were numerous laws in place, it was impossible to effectively enforce these laws.SAN HAGONS CAPITAL ASSETSThe village of San Hagon had basic capital assets on which it based its competitive position. about fishing villages in the region had similar capital resources.Human CapitalEducation Most of the villagers had some high school education. Skills Fishing and farming skills were learnt from an informal ne cardinalrk of fellowvillagers, friends, etc. 14www.panda.org/about_wwf/what_we_do/marine/problems/problems_fishing/destructive_fishing, accessed December 24, 2008.15www.panda.org/about_wwf/what_we_do/species/news/stories/index.cfm?uNewsID=5563, accessed December 23, 2008. paginate 59B09M016Employment Most villagers had multiple occupations in order to generate enough income to make a living.Social CapitalAccess to governmental and no n-governmental information sources The village had particular(a) 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 little decision-making 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 public or private financing. Savings potential 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 Th e village had 12 overseas workers who regularly sent remittances to support their families.Physical CapitalAccess to electricity The village owned an old diesel generator that provided electricity. The generator required condescend 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 months when school-aged children necessitate supplies and in times when amass past dues owed by households became a problem.Access to modes of conference Due to its remote location and small population, the village did not impart access to band lines or wireless phone service. The nearest phone line was located in San Jose, a larger settlement that was three hours away by car.Access to expatriate San Hagon only had internal dirt roads and road access was a problem, especially in the rainy season. Roads connecting San Hagon to the o uter world were mostly 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 better-off households boasted small motorcycles, of which there were more than a dozen. ravish to and from the village was provided by a Jeepney (an extended U.S. military jeep leftover from WWII), the traditional form of public transport in the Philippines operated by one of the villagers that usually left for San Jose early in the morning and re originateed in the afternoon. Jeepneys transported people, fruits and vegetables, livestock, etc. 16Access to safe water tack on The village did not fool running water and depended on numerous deep fresh water wells for its fresh water supply.Home ownership More than 95 per cent of house holds owned their own dwellings. The better-off households had cement walls and galvanized iron sheet roofing. Boat ownership Banka boat ownership was close to 100 per cent. Approximately one third of these bankas were motorized. opposite 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 feed their families and manage the rest of the catch at the village square or exchange it against fruits, vegetables, rice and other staple goods. The price of fish was not fixed and would vary 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 reach 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. Few 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 perishable commodity and transporting fish for more than a couple of hours without infrigidation or cold storage was not possible due to the prevailing heat. There was no access to ice in the region and the be of a refrigerated vehicle was beyond the villages means. Somefishermen chose to dry excess fish and sell it locally, even though dried fish made less profit than fresh fish, or consume it themselves when fresh fish supplies were low.Even though the villagers complained at times, they had accepted the life- flare they led, as they did not have the financial means or knowledge to alter their situation. The only oth er alternative was to leave the village, migrate to larger cities and look for jobs, of which there were only low-paying, secondary 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 reality 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 change the livelihood of other fishing villages. The demeanor of a European NGO was a blessing and meant an influx of muchneeded money.DIVING VILLAGES AND ENVIRONMENTAL PROTECTIONA number of fishing villages in the region had made the transition from fishing village to diving village with the help of foreign NGOs. Diving 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 in come and helped to protect the environment.PROJECT SAN HAGON HITTING MANY BIRDS WITH ONE STONE afterward 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 recognition and were much easier to access than San Hagon.2. Damaged product A significant portion of San Hagons coral reef had been damaged. 3. Time factor It would take a long time to transform San Hagon to a diving village. Instead, MIA had designed a project that would entail the livelihood cash advance of the village, empower women and encourage environmental protectionism. Petersen had remembered the old Danish narrateing hit many birds with one stone as he designed the project.PROJECT assignmentMIA had proposed that in return for stopping blast and cyanide fishing and r everting back to traditional means of fishing, the village would receive a grant to establish a fishing cooperative, construct a fish processing/cooperative building with all office furnishings and receive a new diesel generator, fish processing equipment, packaging equipment and training on how to process and package fish.In addition, MIA would copyright a brand name for the village, have all marketing communication materials prepared and arrange shelf space as the exclusive supplier of malls and supermarkets in Metro Manila. It was foreseen that reverting back to traditional methods of fishing would decrease the list 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 offset 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).P ROJECT 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 sell/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 fishing methods would cease. This would halt the destruction of the coral reef and help increase fish stocks. Fishermen would become environmental conservationists and impart up the concept of sustainability.PROJECT PREPARATIONA knowledgeable and experienced team was assembled to manage project San Hagon. Ricardo Perez, age 65, was hired to cutting edge the local team, help with local authorities and overcome language barriers. Perez had worked as a marketing director for the San Miguel Compan y, 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 co-op (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 Philipp ines had completed project preparations and gotten project sycophancy 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 application 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 policymaking 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 defeated at the speed of the approval process and had directed Perez to intercede frequently. Petersen had sight to himself, We are extending a grant and transferring knowledge and still there is all this opposed-moving bureaucracy to deal with.Concurrently with the project permit applications, MIA had conducted one month of catch research in San H agon to determine the sum of money of fish caught by the fishermen. The survey had revealed that it would be possible to catch on average 1,250 kilograms per day (2,750 pounds per day) of prime prize fish for processing.PROJECT SAN HAGON VALUE CHAINMIA had undertaken a value 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 comprise structure had further revealed that the cost structure 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, instilling tight controls, frequent meetings and time management to speed up the project.MIA had concluded that the key success factors were toProvide grants to acquire new assets.Transfer knowledge and train stakeholders in getting 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.deuce teams were formed and the work was divided up as follows Team One convergence development and packagingTeam Two Transportation, distribution, and advertising and promotionProduct Development and packageTuna, 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 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 upwardly mobile, health-conscious customers that had time constraints. Concurrently the team had researched basic packaging machinery that could be operated and maintain ed 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 Advertising and PromotionA small refrigerated truck 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 truck in due time and that a San Hagon villager would be employed to replace the hired driver in the near future. The team had come up with the brand name ISSAGA, which in the local Tagalog vocabulary 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 h ad 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. acquire shelf space in a Manila supermarket was in itself a great 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 countless others had called in favors, and Manila TV stations, newspapers and magazines had agreed to support the project and slip 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 lower end of the distribution chain completed, the focus had been shifted to the top end and MIA had directed 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 commitment 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 ordained 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 sold to the buyer HUI malls.2. MIA wanted 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 current 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 the 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 persistent and Petersen, after two weeks of deliberations and absolute inertia on the part of the villagers, had directed Perez to conduct 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 disc lose 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 roast 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 terminated the project, he had decided to boost on even if it meant accepting additional demands. Demands for help were frequent. Villages neighboring San Hagon had heard about the project and the MIA office received numerous phone calls daily petition MIA to extend its help to other villages. MIA had been busy 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 ha d 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 unwillingness of the San Hagon cooperative council to hurry things along. His frustration increased, as with each brief month he was not able to report progress to MIA headquarters.Mindful of his standing at MIA Denmark and in his quest to speed up theproject, Petersen had started to adopt a more confrontational approach, especially at the weekly 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 continuously assured Petersen that this was how business was conducted in the Philippines. Petersen was tired of hearing this. The other nerve-wracking problem was that the word no did not exist in the Philippine language.It was considered rude to say no and hence every question and every inquiry got a positive answer. There were, however, different shades of yes, with some center 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 feel embarrassed to say no to him. exclusively 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 complete this project and start new projects if he was to stand a chance of getting promoted and assuming greater responsibilities in a larger MIA office.Working at MIA had begun to feel like a tug-of-war between himself and the Filipino staff, with Petersen trying to quicken the pace and the staff slowing 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 t o 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 boost to his income.Perez had felt that he urgently needed to complete the project. He had chosento continue working 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, United 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 one hundred seventy-fiv e employees. Even 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 dealings with the San Hagon fishing cooperative.True to Philippine culture, Perez had always shown the utmost 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.Fil ipinos did not like confrontation. Pakikisama (group loyalty) and the importance of maintaining social harmony were a part of his management style and disagreement or interpersonal tension of any sort at the workplace was extremely distasteful for Perez. Petersen had caused him hiya (embarrassment) in front of the rest of the team. His team, while staying uncommunicative 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 spend most of his time out of the office and avoiding Petersen.NEW PRODUCT-TO-MARKET PROCESSDeboning, Filleting and PackagingIn 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 chance to earn extra income when their 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 credit according to the daily catch broughtin. The fishermen were free to do whatever they wanted with the catch not purchased by HUI malls.HUI malls were only i nterested 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 and 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 th e 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 tooshie 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 P ROBLEMSUnder 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 arcuate to the quality standards set forth 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 weather 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 cooperative 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 single-minded 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 inte rventions had worked and the profits had started to seep in.PROJECT completion REPORTAfter 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, galvanized, 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 abrupt 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 busine ss terms if need be.Petersen had unwillingly agreed to send a fact-finding mission to understand 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 SAVINGS AND INVESTMENT AS SHARE OF GDP 1996-2001 AVERAGE (%) Savings/GDP40.133.545.222.926.119.732.518.926.912.5China, Peoples Republic ofKoreaMalaysiaIndiamainland ChinaBangladeshThailandPhilippinesIndonesiaPakistanInvestment/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 FORECASTProcurementConstructionTrainingSalariesM IA local consultants/monthSHFC management salaries/month$18,0005,0001,5001,500230OPERATIONAL COSTTruck rental/monthTruck driver salary/monthSHFC workers salaries/monthFuel/monthPackaging material/month8503751,0003,500250ADDITIONAL COSTSProcurement $4,000Additional driver salary/monthAdditional fuel/month4,0003751,250EXECUTIONMr. Petersen, MIA director, The PhilippinesMr. Perez, project manager, San HagonPage 179B09M016Exhibit 4PROJECT SAN HAGON GANTT CHARTPage 189B09M016Exhibit 5PROJECT SAN HAGON THREE YEAR FINANCIAL PROJECTIONSYEAR 1255,200236,88012,600249,4805,720REVENUECost of goods soldFixed costTOTAL COSTINCOME BEFORE TAXESNOTE All amounts in US$ at $1=56 Filipino pesosFiscal year ends December 31Exhibit 6VALUE CHAIN ANALYSISYEAR 2382,800236,88012,600249,480133,320YEAR 3382,800236,88012,600249,480133,320Page 199B09M016Exhibit 7$ (000)VALUE CHAIN COST STRUCTUREPage 209B09M016Exhibit 8DISTRIBUTION CYCLE ANALYSIS