Colombian Business Perspective - Coursework Example

Colombian Perspective Table of Contents Table of Contents 2 Introduction 4 Inequality 4 Instability 5 Un-Sustainability 5 Case Analysis 6 Topic Technology 6 Business Perspective 7 Topic 2- Health 7 Business Perspective 7 Topic 3- Economy 8 Business Perspective 8 Topic 4- Equality 9 Business Perspective 10 Topic 5- Justice 10 Business Perspective 10 Conclusion 11 Works Cited 12 Introduction Researchers have found that three issues such as un-sustainability, inequality and instability have emerged as major challenge for the interlinked world. Study shows that more than 1 billion people earn only $2 while on contrary other people spend millions of dollars daily. The world is also going through turbulent period in terms of economic recession, terrorism, political conflicts hence stability of the world also gets disrupted by above mentioned issues. Third challenge for world is shrinking energy resources over the time. The world desperately needs sources for creating sustainable energy in order to give better future to its next generation. Inequality Political scientists have pointed out that economic inequality and political turbulence go hand in hand in order to create unequal prosperity. It is axiomatic that economical inequality gives birth of dissatisfaction among people of a particular country (Rapley 3). Inequality is multidimensional disease because research shows that inequalities may arise within the same country between various regions. For example, in China economic inequalities lies between urban region and coastal terrain due to difference in per capita income. Nobel laureate such as Amartya Sen has indicated that inequalities should be calculated in terms in terms of economic and geographic scale (Galbraith 160). Impact of economic inequalities is far less for developed countries like USA, UK and Germany in contrast to developing nations such as Brazil, India and other south Asian countries. Instability The world has undergone various contingency period over the last 30 years due to various reasons such as Cold War between USA and Russia, currency crisis in Asia during 1997/98, terrorism, economic recession and recent euro zone crisis. According to financial analysts the meaning of instability has changed after economic recession of 2008. In now days instability means mankind could face period of adjustment in order to avoid situations like great depression (Smith 4-6). Political restructuring is a continuous process to resolve issues having importance in context of particular country. Political restructuring of Soviet Union had impacted the world severely in terms of creating new states and altering the economic dynamics of Russian Federation. Quintessentially economic hegemony of USA has impacted the direction of global stability for last 50 years while political instability of Middle East has disrupted stability of Asian countries (Ritchie, and Crouch 4). Un-Sustainability Giuseppe Sfligiotti has argued that price of clean energy has increased in recent times due to decrease of availability of energy. Giuseppe Sfligiotti has also pointed out that government intervention is needed to counterbalance negative market forces such as speculation, over consumption in order to achieve sustainable growth. Sozaburo Okamatsu has suggested that that government of a country needs to decrease carbon footprint in and increase use of clean energy in order to fulfil the objective of sustainability (Kaya, and Yokobori 2). Developing countries have issues regarding decreasing carbon footprint because decreasing carbon footprint means they need slow down the pace of industrialization. Many companies such as Nissan, Coco Cola, Ford, Nestle and others have already taken initiatives to decrease carbon emission rate throughout value chain in order to create a greener earth for next generation of human race. Case Analysis Colombia is a Latin American economy with an approx population of 46 million. GDP of the country is estimated as 231 billion dollars in the year 2011. The country invests more than 1% of its GDP in the field of science and technology. Per capita GDP of the country is way below in comparison to United States and other developing countries of Latin America. Topic 1- Technology Recently Colombia has launched National Innovation System (NIS) under the leadership of Margarita Garrido (Director General of NIS). Government of the country has identified that synchronizing innovation with business practice can help the country to increase sustainability. As a part of innovation the country has recently established eco friendly transport around the city of Medellin. Government has created six environment friendly cable car lines in the city in order to reduce greenhouse gases in the city and purify air quality. Previously inhabitants of the city used public transports such as cars, buses and taxis for transportation which ultimately increase level of greenhouse gas emission in the city. The situation has changed by introducing environment friendly cable cars for public transportation by the Columbian Government. Fare for cable car transportation is low due to now use of fuel in contrasts to other transportation modes. Now economically unprivileged people got the opportunity to enjoy riding cars due to introduction of environment friendly cable cars. Government of the country has given the contract to Empresa de Transporte Masivo Del Valle de Aburra Ltda. (ETMVA) for supervising the project of establishing eco friendly metro lines. In accordance to industry insiders eco friendly metro transport will not only contribute environment sustainability but will lift Colombian people out of poverty also. Business Perspective Companies can incorporate newly invented environment friendly metro transports in their value chain in order to achieve cost benefits. This model can be termed as hybrid transportation model. Companies operating in Columbia needs to use Heavy duty trucks for long distance transportation and environment friendly metro lines for short distance logistics. Using eco friendly mode of transport can help them to decrease use of costly fuel in existing supply chain management. Decrease in fuel consumption will help companies to reduce operating cost of value chain hence it can be inferred that eco friendly metro lines will be helpful for domestic and international companies doing business in Colombia. Topic 2- Health Government of the country has already taken initiatives of insuring more than 85 percent of population within next five years. Research report shows percentage of insured population has increased manifold in recent years. Government is providing various health packages for poor people in the country in order to remove economic inequalities. For example, CR packages offered by the company include various levels of healthcare whereas POSS (Plan Obligatorio de Salud Subsidiado) deals with covering complex healthcare catastrophic. Business Perspective Health sector of Columbia has revamped in recent year with the introduction of latest technology. San Vicente de Paul is a hospital located in Bogota and they have recently introduced digitized hospital network by implementing Cisco health technology model in order to reduce operating cost and improve efficiency of health service. San Vicente de Paul has reduced service delivery cost with the help of digitized systems and now economically unprivileged people of the country have the opportunity to get low cost health care service offered by the hospital. Hospitals planning to explore business opportunity in the country needs to incorporate latest technology such as Radio Frequency Identification (RFID) in order to reduce service delivery cost and increase profitability. Topic 3- Economy Research report shows that annual FDI or foreign direct investment will touch a mark of US$13.5 billion by the year 2014. Government of the Colombia is expecting a rise of 70% in coal production by the year 2014. Export earnings for the country are also growing at a rate of more than 7% for consecutive three years. Trade analysts believe that increasing foreign direct investment will create blue collar job opportunities for poor people of the country. USA and Colombia has recently signed in Trade Promotion Agreement (TPA) in order to create job opportunities and increase economic health for both the countries. Following issues has been mentioned in Trade Promotion Agreement (TPA). Trade agreement will eliminate barriers such as VER and tariffs for export and import activities. International Trade Commission or ITC has forecasted that total tariff reduction of $1.1 billion as result of Trade Promotion Agreement (TPA). The act will help Colombia to increase its GDP by $2.5 billion within next three years. Industry insiders have also forecasted that service industry of the country will grow manifold as a result of the agreement. Business Perspective Regional as well as international companies operating in the Colombia will get benefitted by Trade Promotion Agreement (TPA). Export cost has reduced for companies of the country exporting products to USA market hence they can earn more profits from their operation. Opportunities for companies doing business in Colombia can be analysed in the following manner. Import Quota In accordance to Professor Hill, import quota is direct control on quantity of imported goods by a particular country. Import quota is unswervingly connected with trade protectionism and above mentioned Trade Promotion Agreement (TPA) will decrease import quota for companies in Colombia planning to export product to USA. Voluntary Export Restraint (VER) This is a special case of import quota model. In Voluntary Export Restraint (VER) policy makers of exporting country creates quota barrier on export in accordance to demand of policy makers of importing country. VER will be decreased for Colombian companies after the introduction of Trade Promotion Agreement (TPA). Topic 4- Equality Florida Association for Volunteer Action in the Caribbean and Americas (FAVACA) has recently launched a professional exchange policy for unprivileged women of Colombia. Government of Florida is trying to create sustainable development for women belong to Colombia through series of leadership initiatives. The exchange program will cover various issues such as community advocacy, organizational strengthening, and prevention of human trafficking, drug rehabilitation, community leadership and job creation. FAVACA has already appointed twenty four Colombian women as of Afro descendant communities as key members for the program. Education program for Colombian women created by FAVACA will enhance women empowerment in the country. FAVACA has planned to organize women education program in order to enhance social equality of women in the country of Colombia. Such initiative is good news for Colombian woman and also a ray of hope for reducing disease like gender inequality. Business Perspective Empowering women will help to create a vibrant business situation complemented with various contributors such as collaborators and innovators. Women can suggest new ideas to the company and increase level of work dynamics. Giving opportunity to women employees can be a part of designing sustainable corporate social responsibility issues for companies. Topic 5- Justice Colombia is trying to resolve half century long conflict and tensions with neighbouring countries like Venezuela in order to maintain social justice. President Juan Manuel Santos is showing interest on building security gains and increase trade relations with neighbours. Government of Colombia is showing real intentions to resolve territorial tensions with countries like Ecuador and Venezuela. Democratic judicial and legal system needs to take strong steps in order to decrease criminal activities such as human trafficking, drug racket and counterfeiting in order to increase value of human life. Business Perspective Justice in terms of resolving regional conflicts and acting together to solve particular critical issues can boost business growth for existing companies. A common cognizance among various stakeholders such as Ecuador, Venezuela and Colombia can increase business opportunity for transnational trade. Free trade market complemented by low level of protectionism can help each stakeholder to achieve economic prosperity. Political Instability Index is a useful tool to measure impact of justice for a particular country. Index score shows threat probability in terms of social disruption for a particular country. Total index scores are calculated by summing up variables such as degree of political justice, level of economic distress and potential vulnerability to unrest. Index score for Colombia is 7 (quit high) which shows existing political injustice in the country. Decreasing the index level will help existing companies in the country to do business in stable political environment. Conclusion It is clear from the above study that global business practices has became interdependent and multidimensional in recent times. Global issues like gender biasness, use of clean energy, sustainable development of economically unprivileged people can be classified as contemporary challenges for global leaders. Although Colombia has taken initiatives to resolve critical issues regarding un-sustainability, inequalities and instability but they need to go long distance in order to create a better world for the next generation. Works Cited Galbraith, James. Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. Oxford: Oxford University Press, 2012. Print. Kaya, Yōichi, and Keiichi Yokobori. Environment, Energy, and Economy: Strategies for Sustainability. Jingumae, Shibuyaku, Tokyo: United Nations University Press, 1997. Print. Rapley, John. Globalization and Inequality: Neoliberalisms Downward Spiral. Boulder, Colorado: Lynne Rienner Publishers, 2004. Print. Ritchie, Brent, and Geoffrey Ian Crouch. The Competitive Destination: A Sustainable Tourism Perspective. Wallingford: CABI, 2003. Print. Smith, David. The Age of Instability: The Global Financial Crisis and What Comes Next. London: Profile Books Ltd, 2010. Print. Read More