Fiamchi: Fishing in Troubled Waters

Abhijeet, Amit, Alok and Saumitra met recently while attending a six-month residential course on entrepreneurship at a leading management institute in eastern India and decided to start a business venture together. They formed a partnership firm named Fiamchi, and explored the opportunity of producing the Pangasius breed of catfish in either open tanks or using the cage farming method. The opportunity looked attractive. There was good demand for fish locally. Also, technical and financial support was available through various government schemes. The cost-structure was such that their venture had a good chance of making profits. However, social issues peculiar to Jharkhand state, the region where they were planning to start their venture, made their decision to go ahead a tough one. A largely uneducated, poverty stricken, nature worshiping, tribal population lived in the area. There was a possibility that the local population would oppose the project due to their social and religious beliefs. Also, the region was affected by Naxalite violence. The entrepreneurs were concerned about the impact that the social unrest and violence would have on their venture. More importantly, they were also worried that the local population would initially allow them to commence their business but cause a “hold-up” at a later stage when the investments were already made. For a business dealing in the production of a rather fragile and perishable product, this sort of a ‘hold-up’ would have serious negative implications and lead to large losses. The case discusses four strategic alternatives that the entrepreneurs need to evaluate. They can either buy peace; collaborate in government projects in the region; approach local population through a not-for-profit or non-governmental organization; or seek corporate support through the corporate social responsibility activities of a large company active in the region.