Companies are faced with decisions every day that may affect future business transactions. When implementing critical thinking into the decision making process management will make more educated decisions. "Critical thinking is that mode of thinking-about any subject, content, or problem-in which the thinker improves the quality of his or her thinking by skillfully analyzing, assessing, and reconstructing it." (Edler & Paul, 2006). Moving into a new market is something that requires a careful analysis of all angles of the situation. The location, population, economy, and potential barriers are a main focus that Stonybrook researches before making any decision. Gathering all the f ...view middle of the document...
Tourism, fishing, and farming are mostly cash businesses that are not always guaranteed to be successful. With cash business there is no paper trail for income. Proving what they make will be a hard task. With a commercial loan the main qualifications are the income and equity of the business. With the types of business being run there will be little to no equity because the population is utilizing the natural resources of the island. Another major problem with this is what if the island is hit with storms and fishing, farming, and tourism stops for several months. The customer will not have income to pay back the mortgage debt. The lending guidelines will be much stricter on this island because of all the potential risk involved. Even if the people are not self employed their incomes are most likely low because of the inexpensive labor that Kava offers.Natural disasters also play a significant part in the decision. With the numerous number of natural disaster that the island of Kava could possibly undergo the insurance rates will be through the roof. With low income and high cost the lenders are unwilling to lend. The natural disaster plays a role in the lenders decision because of the security of the loan. If the house or land is damaged immensely there will be no value to the lender. With the number of disasters the island of Kava has already faced a big concern is the value of the land and homes today. The land and home will need to be appraised bef...
