DP #2: Fighting against corruption in Peru

I got impressed when we saw in class that corruption is a lack that we can find in all countries and societies. No matter how it’s doing its GDP, no matter if it a developed country or with a good public system that ensures wealth and qualified education to all its habitants. In every sphere of public or private sector, we can find examples of how functionaries abuse of the entrusted power they received, for their own interests.

However, I use to think that in the beginning of 2000 decade Peru had one of the most corrupted governments of the story. I can remember all the excesses and how the ex-president Alberto Fujimori stole millions of dollars that Peruvians paid from taxes and bought politicians and media companies in order to maintain his power.

Today Peruvians continue to struggle against all kinds of corruption that lies at all levels of the public sector, as municipalities, ministries, and the police. The private sector is also not immune to this reality, and corruption can also be found in business men that enforce their employees evade taxes (they hate to pay takes all though their companies gain a lot of money per year) or pay public officers to get a license to operate when this is not legally or environmentally allowed.

According to the National Survey on Corruption of Pro Etica, in the year 2010, 80% of peruvians described their own country as corrupt or very corrupt. And 56% of the responders considered that corruption of officials and authorities was the main factor that doesn’t permit our country to progress or reach development.

In the same survey, 46% of Peruvians believed that the Congress was the most corrupted institution, other respond the Police (45%) and the Justice Power (38%). In this scenario, it was a big concern to find out that 30% of Peruvians respond that in five years corruption in our country will increase or will still the same.

So this is our future? I am a more optimist person and believe not. If Peru wants to keep growing, young people must protest against corruption with all the tools they have available (as they did during Fujimori’s dictatorship) with the support of the media and universities. On the other hand, politicians must be the first sector of the society in setting the example as they try to monitor and expose unethical practices. Otherwise, we will still have a corrupt country that only carries rich get richer and the poor get poorer.

Comments Off on DP #2: Fighting against corruption in Peru / 28 Nov 2011 por Iana Malaga Newton
Uncategorized /

Hypermarket’s trend in Spain

I’ve choosen two of major’s brand of Spanish Hypermarket: “Eroski” and “El corte inglès”.

El Corte Inglès:

Turnover:

201o) 16,413.42  2009) 16,356.26  % VAR) 0.3%

We can see that the total amount of turnover wasn’t change in the last year, and even it’s drop since 2007 and 2008, this is probably a reflection of the critical period.

Consolidated profit:

2010) 319.41 2009) 369.17  %VAR) 13.5%

Instead of no growth in the turnover, the consolidate profit has a positive trend, with +13,5% last year.

The Group’s growth rate is reflected in the increase in own funds, as well as in the significant investments made in order to open new commercial establishments; at the close of 2010, the Consolidated Group’s own funds stood at around €8,040.73 million, 2.7% higher than the previous year, and included the consolidated earnings attributable to El Corte Inglés as the parent company.

Source: http://www.elcorteinglescorporativo.es/elcorteinglescorporativo/elcorteinglescorporativo/portal.do?IDM=3027&NM=3

Eroski:

Eroski has closed fiscal 2010 with an improvement of 17% in operating profit to reach 100 MILLION EUROS TO, linked to a reduction in financial costs, showed an increase of 20.4 MILLION IN PROFIT BEFORE TAXES. ALMOST REPEATS EBITDA, amounting to 419 million euros.

For its part, the consolidated results of EROSKI improve by 7% over the previous year 64 million being negative, being conditioned by a charge of EUR 70.5 million impairment of assets, as marking the new international accounting standards . During the year covered a significant reduction to become more competitive prices and intensified the return of bank debt than expected.

The achievement of these data occurs in a general context of declining activity, mainly by unemployment and falling consumer confidence by the general economic situation, to which was added the increase in VAT. This resulted in a reduction in household consumption.

Among the objectives identified in 2010 included the reduction of bank debt, caused by sustained high investment in time, consistent with the primary purpose of a cooperative project and Eroski. The primary objective of financial policy remains the reduction of financial debt, which has already begun with consistency in 2009. In this sense the debt short and long has been lowered in the year 454 million, having repaid a bank loan amount higher than the expiration of the period.

Source: http://www.eroski.es/es/conoce-eroski/memoria-eroski-2010/

Conclusion:

Even the principal hypermarket of the Spain has (and still) suffered for the crisis moment, even dough we can see some positive data in the profit, but still not huge, and even the turnover is still stagnant, clear sign of the difficoult moment. Both brands in this period has done some investment to open new Supermarket, and Eroski has tried to reducts the bank debt caused by these investments.

 

Comments Off on Hypermarket’s trend in Spain / 27 Nov 2011 por Luca Palma
IMSD /

Managerial skills. What a discovery

Since the first day of class I realized that this would be an interesting subject. It was about the things that we should do during a presentation and the things that we need to try to avoid in it. I guess that everybody knew before this lecture how to do a good presentation however at least in my case I did not have that knowledge well organized in my head making me have a lot of mistakes. Now I am starting to know in what I am better at and I am trying to be more focus on it.

I would like to say that this subject is not just valid for the business relationships it is related with a way of life. It is a different way to face the problems and a good way to following the hits. The way that unconsciously our brain works receiving all kind of signals that at the end give us an impression of a company, product, relationship, negotiation or whatever.

For example, in the case of the negotiation practical exercise I realized that I was sending a negative message to the other company. I was using the word impossible trying to set the limits that my company had in the negotiation process. This gave a bad impression to the other company interfering in the negotiation. There are different ways to make a statement, different ways to manage a situation like that avoiding the cons and promoting the cons.

Related to the last part of the subject the time management part has shown me the importance of prioritizes. This master is being tough on this topic. We spend so many times in the school and it is very important to set the main goals of the master and forget about waste the time in things that not give us anything on reward.

From my point of view it has been a great experience that I need to take more in account for my future professional career and for my life.

 

 

 

 

 

4 comentarios / 27 Nov 2011 por Antonio Calixto Moreno Zarco
IMSD /

Managerial skills – Presentation-Audience, Negotiation-Success and Leadership-Empathy

I have to admit that when I saw this subject in the syllabus of the International Master in Sustainable Development and Corporate Responsibility I did not know what it was about. However, in the first two classes I realise that this subject would be one of the mos important in my life. I believe it because of this subject is not only a technical subject but also it is a subject that teaches you how to face the problems. Some things included in the subject can look logic but I never had thought about them. I needed the tools and the structure that this subject has provided to me. The three blocks of the subject have been presentations, negotiation and leadership.

On the first block, called presentation let me think about the audience. So far, I have not raised the need to think if the audience really understood me and what do you have to ask yourself in order to make easier to understand your point. I realize that it is strictly necessary to focus your presentation to the audience. Everything you put on the slides, your movements, your voice, your eye contact, theenvironment, the structure, the flow, the ideas, everything must have the same goal; to change one act in one attitude. Any presentation has an end and it is the end where you must to get!

The second large topic has allowed me to learn and rethink what are the best ways to negotiate. This point was totally new for me. It was the first time that I thought about it. I learnt that in any negotiation nothing happen by chance. It is important to take care of your vocabulary, to have clear your goals, to prioritize your goals as well as being clear with the other party in order to seek a goal that benefits both (a win-win negotiation). Thus, I had never thought about, the pie model where at first you apply a win win negotiation in order to make the “cake” bigger and at the end to apply a win-lose negotiation. Although you are the loser party you will achieve an outcome bigger than at the beginning of the negotiation.

The third block really has been very helpful in understanding which is the best way to lead. It has given the tool in order to know the role of each one and how I have to face a problem not only in my job but also in my life in general. I have learnt that it in order to solve a problem it is necessary to take a solution frame rather than a problem frame. It makes no sense to look for a guilty but it is necessary to analyze the situation knowing what you can do focusing on your goal. I have also found very interesting the time management theory because it will allows me to do the tasks considering which have most priority.

To sum it up, I have to say that this subject, though at first it was not immediately clear what I would learn, I realized that it would help to face up any challenge in my life. This subject has provided me the necessary tools in order to:

• not only to inform my audience about my goal but also to change their attitude,
• not only to negotiate, but also negotiate positively and with victory prospects
• not only to lead but also to face leadership based on emotional intelligence and empathy for the others in order to have success together.

In conclusion I would like to thank Professor Christopher Metcalfe for giving us the necessary tools to solve the challenges that life will go slowly raising.

Best regards,

Carlos

Comments Off on Managerial skills – Presentation-Audience, Negotiation-Success and Leadership-Empathy / 27 Nov 2011 por Carlos Cerdan Infantes
IMSD /

Accounting and Finance. Situation of hypermarkets in Spain

Nowadays, the world (with the exception of few countries such as China, Brazil and India) is immersed in a deep financial crisis. Focusing on Spain, it is remarkable the debt crisis and the not overly optimistic forecasts for 2011 with a growth of 0.8% and 1.1% for 2012 (IMF, 2011).

The food distribution sector is no stranger to the crisis in which we are immersed hence the turnover in 2009 was reduced by 4% (DBK, 2010). This is due to the high competition in the sector and the need to reduce prices in order to try to maintain and retain customers as well as attract new customers. However, this trend is reflected in their accounts?

According to a study carried out by the Organization of Consumers and Users (OCU), over 70% of household purchases are made in just 7 hypermarkets. The hypermarkets chains are Auchan, Carrefour, S.A., Mercadona, S.A., El Corte Ingles S.A., Lidl Supermercados S.A., Eroski and Dia S.A. (OCU. 2010). Of the total of Spanish hypermarkets, it is important to note the results of Mercadona, S.A. with a revenue growth of 6% in 2010, reaching 16.485 million euros (Mercadona, S.A., 2010) and Carrefour, S.A. sales with a growth of 5% reaching 90.099 million euros (Carrefour, S.A., 2010).

In this blog, I will make a small financial comparison between both supermarkets because both aret he most representative supermarkets (representing the 40% of the sector). The goal of the analysis is to establish which is the general financial situation of Spain and if this is consistent with data obtained in 2009 on reducing turnover.(Lasmejoresempresasynegocios, 2011)

According to its financial statements (Carrefour, S.A., 2010 and Mercadona, S.A. 2010), and Profit and Loss sheet Statement, different conclusions can be draw.

It is important to point out that the comparability of both companies is not done in absolute terms but is done in qualitative terms because Mercadona, S.A., is a national company whereas Carrefour, S.A. has an international focus. In fact, the sells for Carrefour, S.A. are 6 times bigger than Mercadona, S.A.

First, according to the statement balance, the Mercadona, S.A. current assets are approximately 51% whereas the non current assets are 49%. On the other hand, in Carrefour, S.A. the currents assets represent about 38% whereas the non current assets are 62%. From this point, it can be inferred that Mercadona, S.A. has more liquid money (21%) than Carrefour, S.A. (6%). We also note that the payable assets represents for Mercadona, S.A. only a 1% while for Carrefour, S.A. are 11%. It can denote that the providers, perhaps because the market size, pay more quickly to Carrefour, S.A.. It is also significant that while for Mercadona, S.A. the investment in tangible assets is an important basis for their investment with 46%, for Carrefour, S.A. is only 28%.

Respect to financial liabilities, we see that the main difference between both supermarkets is the relationship between permanent funding resources-short term and long-term funding. While Mercadona, S.A. barely has long-term debt with a 0.39% in Carrefour, S.A. represents almost 27%. This indicates a difference in the management model in which Carrefour, S.A., perhaps because of its brand, banks let allows it to have financial debt for longer periods. Furthermore, one conclusion is that, Carrefour, S.A. pays later to its suppliers while the suppliers pay to it faster.

Finally, according to economic structure analysis of both companies, it can be inferred that the profit margins are similar in both companies (22% for Carrefour, S.A. and 25% Mercadona, S.A.). That is, both companies have a similar strategy regarding to the prices set in their products. Meanwhile, concerning to the employee costs per sales, expenditure on Mercadona, S.A. are higher (12.31%) than in Carrefour, S.A. (9.42%). It also important to point out that the expenditure because of the interest of the financial debts is greater in Carrefour, S.A. (9%) than in Mercadona, S.A. (0.15%).

In the following days, I will update my blog in order to go deeper in this comparison applying different indicators of accounting analysis.

Resources:

(DBk, 2010). DBK, 2010. Distribución Alimentaria (Mercado Ibérico).

(OCU, 2010). Organización de Consumidores y Usuarios. El Consumo Responsable en Supermercados

(Lasmejoresempresasynegocios, 2011). Retrieved: 26-11-2011 from: http://www.lasmejoresempresasynegocios.com/supermercadoshipertiendas.html)

(Carrefour, S.A., 2010). Carrefour, S.A.. Financial Report 2010

(Mercadona, S.A., 2010). Memoria Anual Mercadota 2010.

(IMF, 2011). Internacional Monetary Found, 2011. Retrieved: 26/11/2011 from http://www.imf.org/external/pubs/ft/weo/2011/02/index.htm

 

Comments Off on Accounting and Finance. Situation of hypermarkets in Spain / 27 Nov 2011 por Carlos Cerdan Infantes
IMSD /

DP # 1 DEVELOPMENT, WHERE DO WE START?

I  am so touched by the differnt definitions, approaches as well as the history of development. I then tried to analyse the real situation, and my mind was like, ‘Develoment’ seems to have different meanings to different stakeholders and sectors. This has impacted negatively on the efforts to achieve it. I also tried to listen to the comments of my fellow classmates and noticed that, they have different understanding of ‘development’ as a whole.  I am however encouraged by the improvements, efforts done by different stakeholders, Governments, organisation in attempt to getting there.

I then possed the following questions;

• With all these differences in the definitions of development, can we say we will be able to achieve it?
• The different meanings, concepts, strategies; are they supporting or contadicting each other
• We have kept on changing the strategies, policies; how much time should we give ourselves to change from one approach to the other?
• Is Aid a solution to the problems of development’ espite all these ‘differences in understand?

The most difficult question which is troubling my mind is;

• Where do we start? What do we really need to do to achieve ‘development’?

Its proving difficult for me to answer these questions and i somehow rememebered a discussion i had with a certain two village head men in two close villages back in my country; i did aks them what they think development is all about. And one of them told me that to him; its all about having the basic needs and he emphasised that this should be for the whole community.  In the nearby village; the second village head man told me that “Development is when the government and NGOs come and give us the food when dont have enough” he said. This proved to me that its really a challenge for us to have one definition. I feel this has greatly impact negatively on “Development” in genaral. Lets for example imagine that we involve these two Village Headmen in making choices and decission making as far ‘Development is concerned. They will perfome differently and their strategies will be different since they have different meaning when it comes to development. This also confirms why keep on having these changes in the strategies, policies bot at national and the international arena. We had the Structural Adjustment Programmes, and now the Poverty Reduction Strategy Paper. Its a positive devlopment but i also link it to the same issue of having different definitions and perceptions of ‘ Development’

I also would like to point out how this individual perceptions affects perfomance of Developmental organisation. This can be assessed on how they formulate their startegies but also engange the stakeholeders, for example on the issues sorrounding participation and incentives. Some organisations feel that they need to provide incentives for the stakeholders or community to participate effectively’; however the question is “who is the owner of that Development?”  and also ” how do we achieve suatainability with the incentives, and for how long should we do that?”

I am convinced that it is for this same reason of different meanings, we are having great changes both positive and negative in organisations which are regarded as the machines of Development; the World Bank, IMF, WTO. It is all because they are been run by humans which are having different meanings of the word “Development”. All in all i feel we need to ask ourselves where do we need to start  from; do we need to make sure that we have the same understanding or just ignore it and focus on what the authorities think? Is changing the startegies, policies going to help us achieve “Development?”

 

 

Comments Off on DP # 1 DEVELOPMENT, WHERE DO WE START? / 27 Nov 2011 por Tabithah Mkandawire Kaluwa
IMSD /

Hypermarket financial situation

Hypermarkets work in a very specific way from the financial point of view. The most important issue to understand how they work is the moment when hypermarkets start their functioning. They need to purchase a lot of goods in order to sale them in the near future. What they do is that they set their payments for 60 or 90 days. They will receive the money from the consumers sooner than that and they will be sure that they will be able to pay their liabilities. Their suppliers also won’t worry, because a

hypermarket “always” will or at least should be solvent. Even if in the balance sheet current liabilities are higher than current assets, hypermarkets will be able to close their financial year with a profit. Their main advantage is that hypermarkets are selling basic goods that people will always need to buy in good times and in bad times. What is even more important is that hypermarkets can afford to set a low price. It is due to their power of negotiating low prices while purchasing great amounts of goods. It is an enormous advantage that small groceries stores can not afford. Another important thing is that any financial analysist looking at the balance sheet would tell that hypermarkets (of course they wouldn’t know what kind of company they are analyzing) are short on liquidity. But as they have a high cash flow they do not face this kind of problems

This is why during crisis times in Spain hypermarkets don’t have so many problems at least as far as financial terms are concerned. Another aspect of Spanish hypermarkets is that in the current situation they don’t want to risk on any situation. This is why even if the financial leverage ratio is high enough, Spanish hypermarkets won’t leverage.

Advantages of this sector are incomparable during crisis times. They main strength is that hypermarkets will always have customers, unless a big change comes in peoples opinion towards supporting small stores or being self-sufficient.

Comments Off on Hypermarket financial situation / 27 Nov 2011 por Piotr Adam Lubiewa-Wielezynski
IMSD /

Environmental Economics Case

Imagine a factory located upstream that pollutes a river. It produces steel for the automotive industry. Downstream, local fishermen find they catch less fishes due to the pollution. Both are flourishing businesses that produce wealth and prosperity for the community.

Both industries are major contributors to the community prosperity and its inhabitants are really fond of them. In my opinion it should be resolved by a democratic way i.e. referendum. People may not know what is the whole story about, and this were the authorities should get involved and educate the community inhabitants. More objectively the better.

As a former ecological party member (a debate we did in class), I would ask the people of the community what is the most important issue for them? Wether they prefer to become a prospering industrial city or they would prefer to live in peace with nature and have a better quality of life. They have to understand that they won’t be able to continue developing both industries. The factory that is located upstream is destroying the fauna and in future they may not be any fish left. Another important matter is that probably in the future steel won’t be an important material for the car industry. The community has to decide…

Both sides are equally permitted to use the river, but conscious polluting should be penalized. It’s exactly the same action as someone would start to destroy some historical monument, which belongs to the whole society. I believe that the authorities should regulate this matter by imposing taxes on pollution or simply to forbid the factory from polluting the river or face financial consequences. It would motivate the automobile company to decrease their pollution. The authorities should also make a projection, which industry would be more profitable in the future. It can be done using the cost benefit method or the cost efficient method. It could give precise numbers and results what will be more beneficial for the community. After such an evaluation people may still be no pt decided, because the problem is tackling environmental issues, on which it is difficult to put price.

Of course in the real world such communities doesn’t exist and the situations and issues are far more complex. Normally the authorities has to take decisions on their own. This is why in the case of that small community I thought, that a referendum would be a good idea. Its inhabitants know the reality and with a bit of new knowledge they will be able to make a reasonable decision.

Comments Off on Environmental Economics Case / 27 Nov 2011 por Piotr Adam Lubiewa-Wielezynski
IMSD /

Finance – How the hypermakerts work

The hypermarkets, are a group of large supermarkets that are able to order many goods in bulk and provide a cheaper price, thanks to their bargaining power. Since most of their financial transactions can be paid within a 30 or 60 day period, they have ample time to pay their current liabilities. Nonetheless, the consumers who use their services to buy the products, must pay right away, giving these markets a high and positive cash flow. Since these numbers on a spreadsheet show that there is a high current liability, it might give a false impression that the company is not doing well. This is not true, seeing as how the supermarkets only buy final products and thus have low equity, with a strong positive cash flow, allowing them to invest and expand further. This gives the markets a high leverage, which can yield more profits in a growing economy, but also lead to more debt in an economy that is doing bad.

Comments Off on Finance – How the hypermakerts work / 27 Nov 2011 por Hokuma Karimova
IMSD /

Environmental Economics – Case Study

Analyzing the use of river between a steel factory and the fishing industry.

Sharing natural resources between two industries that are important for the market can be difficult, but it must be done. Firstly, it is impossible to say whether one industry or another has the sole right to use the river, seeing as how it is a public good and must be enjoyed by everyone (both industry and the public). The steel producing automotive industry helps create jobs and keep the economy growing. Concerns for the economy, however, should not mean lax accountability of the steel industry for their pollution, which affects the health of the fish and people who consume it.

The fishing industry is also important for the local economy seeing as how it also creates jobs, helps keep the local fisherman tradition alive, and provides food for the local and nearby communities. Having less fish, due to the pollution, negatively impacts the fishermen, the biodiversity and the public who simply might want to enjoy living next to a clean water source.

There are many ways to resolve this issue. To come up with an efficient solution, we must first analyze both sides of the argument. To do this, we could use the multi-criteria analysis, which implements a technique that allows the local population to input their own needs and thoughts into finding a resolution. By focusing on a solution that is important for the locals, and is not just beneficial for the corporations, we can ensure long-term sustainability for the local nature. Additionally, while this analysis is being completed, it would be wise to use a national or a state standard on water pollution, to ensure that the factory does not continue to poison the water and the aquatic life.

Finally, the government should regulate the water pollution, to guarantee that the fish being sold to the market is of good quality. Also, if needed, the government should support the fishermen who might be negatively affected by the steel industry by keeping the polluter (the automotive industry) financially responsible for any negative externality of their actions.

Comments Off on Environmental Economics – Case Study / 27 Nov 2011 por Hokuma Karimova
IMSD /