This paper addresses the challenges and solutions in the energy sector in Indonesia. It discusses the issues related to price and policy regulations, economic growth, cultural clashes, and the need for renewable energy sources. The paper suggests feasible solutions to improve energy efficiency and sustainability in the country.
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Running head: SOLVING A BUSINESS PROBLEM Solving a Business Problem Name of the Student Name of the University Author Note
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1SOLVING A BUSINESS PROBLEM Introduction This paper will address the issues on the challenges on the business issues ofIndonesia. These business issues are centered on various factors, and these challenges have impacted on their business profits. as well. The specific industry that will be focused on in this paper is the energy sector. The business organizations feel the pressure regarding price and policy regulations in the several countries of Asia. There are several other issues in this situation, as well.The primary need in the energy sector of Indonesia is regarding renewable energy sources. It has been reported from various sources that Indonesia has enough supply of natural gas and coal. Therefore, it is highly needed that supply of renewable energy sources like fossil fuels should be provided to Indonesia (Gabriel and Kirkwood 2016). The Government of Indonesia should take up the vital role in this context by considering overall picture of energy sector in the entire Asia Pacific region. The vision of the Indonesian Government is to make a cleaner future for its people through energy diversification. Choice of the sector The industry or area that has been chosen for the overall discussion in this matter is the energy sector. It is relatively a very crucial factor because the growth or demand of growth of primary energy in this region is very high. By the end of 2030, this demand is expected to grow by 2.4%. The role of the energy sector is immense in this section only because energy is needed for sustainable development (Saboori, Sapri and bin Baba 2014). Most countries in this region belong to the developing nation status, and they will need to develop through the access of the reliable, modern and sustainable energy in the best manner.
2SOLVING A BUSINESS PROBLEM Challenges in the energy sector There are invariably several problems and factors that are encountered by numerous business organizations in the energy sector. In the energy sector, the price and policy regulations are quite crucial for the overall understanding of the situation. By the end of 2030, it has been recorded that the need for energy will be doubled inIndonesiaregion (Saboori, Sapri and bin Baba 2014). Therefore, it has been said that the demand for the high energy is very high and the pressures of cost are very high. The economic growth ofIndonesiaregion is not so high. Therefore, it has been a massive problem for them indeed (Blumberga et al. 2014).The senior financing cost in the energy sector has been posted as a serious threat to the issues in the Indonesian energy sector. Sometimes it has been found that long term funding is not available at all in these circumstances in Indonesia. Therefore, there is a high need to incorporate public financing frameworks in this scenario. In the case of financial aid, bank loans can help because banks have a powerful hold in the overall financing system in Indonesia (Dornan 2015).The volatility in the currency rates has been a considerable challenge for the Indonesian energy sector as well. The global inflation is a huge issue in this scenario. The hikes in the interest rates are also problematic for Indonesia to nurture the energy sector properly (Gabriel and Kirkwood 2016). Apart from that, the bond market in Indonesia is not penetrated correctly as well. This will give away to the problems in the energy sector. Economic issues are quite interesting to note in the context ofIndonesia. Three of the most powerful countries in this region are Japan, China and India. The economic growth rate of these countries is emerging, so they have lots of possibilities to do well in the coming times (Blumberga et al. 2014). Apart from that, new policies and frameworks should be implemented to make sure these developing countries get access to modern and reliable energy sources. The
3SOLVING A BUSINESS PROBLEM objectives of the states should be achieved properly. The different forms of power that could be got from coal and renewable energy should be made in these countries (Bauer et al. 2017). Therefore, it is an obvious indication that the states will need to go through technological innovation at different levels. So, it is better that they should invest their money on renewable energy sources. According to the sources, the Indonesian energy sector is enriched with many resources like natural gas nearly present around 102 trillion cubic feet, oil resources are more than 3.50 billion barrels and availability of coal resources in Indonesia are around 120 billion tons. Therefore, it can be suggested that Indonesia holds a good position in the energy sector, but more focus can be given on fossil fuel energy in the country(Dornan 2015). There are some cultural problems as well. Most of the energy sector organizations belong to the Western world, and cultural issues have mainly emerged. When these companies expand intoIndonesia, there might be some probable conflicts regarding the culture of these regions (Gabriel and Kirkwood 2016). The cultural clashes are one of the significant reasons why the energy sector has not developed in a full-fledged manner in these regions (Bauer et al. 2017). The employees who work in these regions are not paid well. The Western countries believe in the individualistic culture. On the contrary, the people ofIndonesiawill face the problems as they believe in the collectivist culture (Rao and Pachauri 2017).Collectivist culture is generally followed in the countries of Asia and the Middle East. In this type of cultures, employees of the workplace tend to think over the well being of a group in the organization. As Indonesian employees believe in collectivism, they tend to work with other people by thinking about their well-being in a collaborative manner. If employees of Western countries will come up, they will find it hard to adjust. It is because they follow individualistic culture in business.
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4SOLVING A BUSINESS PROBLEM A feasible solution to the problems in the energy sector The energy industry concerns will have to be improved so energy issues should be placed better. The capital costs should be increased so better outcomes can be received in terms of energy efficiency in the Asian Pacific countries. In order to implement renewable energy sources, leading countries like India, Japan and China should take up the leading role. To make this, they will have to use the best technologies successfully (Boutabba 2014). Apart from that, they should use the ethical frameworks like utilitarianism, so best credentials could be brought from everybody. New solar plants should have to be installed over all countries. According to several studies, it has been found that natural resources are abundant in mostregionsinIndonesia(Dornan 2015).The most important solution for the energy sector in Indonesia would be to put more focus on renewable energy. Many critical risks in the Indonesian energy sector can be curbed down through the use of renewable energy. The Government of Indonesia can also think of using public finance because it will lessen the burden of the Government. Clean energy projects should be carried out all across Indonesia (Gabriel and Kirkwood 2016). The proper financial support should be given to the renewable energy developers. Sufficientsupportofrevenuesshouldbegiveninthisscenarioaswell.Therefore,the Government of Indonesia should focus on using domestic energy resources as much as possible. Some areas should be tackled from a very strong standpoint. They must look to put a stop to the forest degradation, using the technology that will mitigate the problem of carbon emissions. Common people of these countries do not know the benefits of using renewable sources like fossil fuels and solar energy (Forsyth 2014). This is why campaigns could be run among
5SOLVING A BUSINESS PROBLEM those common people so they can invest their money behind this. Solar systems should be installed in developing countries as well. It might be made through loans from the International Monetary Fund and World Bank. However the risks like higher construction costs could be avoided as well. If they want to implement this, they will surely have to make it clear that the topmost corporate organizations in these countries can assist their neighboring countries with important technological solutions (Dornan 2015). Fossil fuel power plants and natural gas should be supplied through pipelines to the ordinary people households by the Government. The national Governments can also use wind and utility-scale energy because it is one of the least expensive powers in the world. Countries like Nepal, Cambodia, Sri Lanka and others would be highly benefitted through the use of these different energy sources. The establishment of coal power plants could lead these countries to more energy efficiency (Dornan 2015). Apart from that, the operations of major energy sector organizations will provide employment opportunities in these countries as well. This is how the organizations will cater to the needs of common people and well being of the natural environments. In this fashion, some feasible solutions could be implemented for the sake of betterment toIndonesia. Renewable energy sources can also be applied so the sustainable environment could be built. Conclusion On a concluding note, it can be said that energy efficiency is one of the main targets for the betterment of nature. Corporate organizations and national Government ofIndonesiawill have to make positive contributions in making effective frameworks so the natural environment can be sustained. Apart from that, loans can be sanctioned from international organizations like
6SOLVING A BUSINESS PROBLEM the World Bank and IMF so common people could be benefitted highly. There are several options for the countries to use renewable energy sources like fossil fuels, solar energy and natural gas. These situations could solve capital cost barriers to implement effective systems in the market.
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7SOLVING A BUSINESS PROBLEM References and Bibliography Andriosopoulos, K., 2016. Energy security in East Asia under climate mitigation scenarios in the 21st century.Omega,59, pp.60-71. Bauer, N., Calvin, K., Emmerling, J., Fricko, O., Fujimori, S., Hilaire, J., Eom, J., Krey, V., Kriegler, E., Mouratiadou, I. and de Boer, H.S., 2017. Shared socio-economic pathways of the energy sector–quantifying the narratives.Global Environmental Change,42, pp.316-330. Blumberga, A., Blumberga, D., Bazbauers, G., Zogla, G. and Laicane, I., 2014. Sustainable development modelling for the energy sector.Journal of Cleaner Production,63, pp.134-142. Boutabba, M.A., 2014. The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy.Economic Modelling,40, pp.33-41. Dornan, M., 2015. Renewable energy development in small island developing states of the Pacific.Resources,4(3), pp.490-506. Forsyth,T.,2014.Internationalinvestmentandclimatechange:energytechnologiesfor developing countries. Routledge. Gabriel, C.A. and Kirkwood, J., 2016. Business models for model businesses: Lessons from renewable energy entrepreneurs in developing countries.Energy Policy,95, pp.336-349. Rao, N.D. and Pachauri, S., 2017. Energy access and living standards: some observations on recent trends.Environmental Research Letters,12(2), p.025011.
8SOLVING A BUSINESS PROBLEM Saboori, B., Sapri, M. and bin Baba, M., 2014. Economic growth, energy consumption and CO2 emissions in OECD (Organization for Economic Co-operation and Development)'s transport sector: A fully modified bi-directional relationship approach.Energy,66, pp.150-161. Sovacool,B.K.andDrupady,I.M.,2016.Energyaccess,poverty,anddevelopment:the governance of small-scale renewable energy in developing Asia. Routledge. Tongsopit, S., Kittner, N., Chang, Y., Aksornkij, A. and Wangjiraniran, W., 2016. Energy security in ASEAN: A quantitative approach for sustainable energy policy.Energy policy,90, pp.60-72. Yao, L. and Chang, Y., 2014. Energy security in China: a quantitative analysis and policy implications.Energy Policy,67, pp.595-604.