Some Political,Governmental,and Legal Variables
The increasing global interdependence among economies, markets, governments, and organizations makes it imperative that firms consider the possible impact of political variables on the formulation and implementation of competitive strategies.
Government regulations or Deregulations
A regulation is a series of rules or conditions that a company have to do according to the government to maintain an order and an armory with all factors inside the country and avoid problems and fines.
SOCIAL REGULATION:
Focuses of how the commons would be treated, with regards to things such as pollution or carring for the footphats.
ECONOMIC REGULATION:
Determines who gets to use the market and how it can be used.
Only companies that have met the requirements are able to participate
in a market. All them need to pay the same price for everyone.
The government reserves the right to limit prices in order
to keep legal monopoly from engaging in unfair business practices.
Changes in tax laws.
Special tariffs.
In the Sales Tax Madrid is assumed that all the goods and services are taxed at the general rate there be a rule exhaustively says otherwise. Is a tax imposed on imported goods and services.They can be used to restrict trade, by increasing the price of imported goods and services, making them more expensive.
In Colombia, the general VAT rate is 16%. THERE ARE SEVERAL differentials, Lower and Higher an ESCO 16 % Rates.
The general rate of 16% is applicable from both goods and to services.
The goods or services which have special or differential rates, must be explicitly indicated by the standard, as well as exempt and excluded. This! Means that if a good or service not covered by the standard seta excluded, exempted or with a special or differential rate, as will be taxed at the general rate.
* This directly affects the industry, because it is related with the prices of imports, which can be used as raw materials for producing other products
http://www.gerencie.com/tarifa-general-en-el-impuesto-a-las-ventas.htmlIn the Sales Tax Madrid is assumed that all the goods and services are taxed at the general rate there be a rule exhaustively says otherwise. Is a tax imposed on imported goods and services.They can be used to restrict trade, by increasing the price of imported goods and services, making them more expensive. In Colombia, the general VAT rate is 16%. THERE ARE SEVERAL differentials, Lower and Higher an ESCO 16 % Rates.The general rate of 16% is applicable from both goods and to services.The goods or services which have special or differential rates, must be explicitly indicated by the standard, as well as exempt and excluded. This! Means that if a good or service not covered by the standard seta excluded, exempted or with a special or differential rate, as will be taxed at the general rate. * This directly affects the industry, because it is related with the prices of imports, which can be used as raw materials for producing other products http://www.gerencie.com/tarifa-general-en-el-impuesto-a-las-ventas.html
Political action committees.
A political committee organized for the purpose of raising and spending money to elect and defeat candidates. Most PACs represent business, labor or ideological interests. PACs can give $5,000 to a candidate committee per election (primary, general or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC or party committee per calendar year. A PAC must register with the FEC within 10 days of its formation, providing name and address for the PAC, its treasurer and any connected organizations. Affiliated PACs are treated as one donor for the purpose of contribution limits.
CAP separate funds - are political committees established and managed by corporations, unions, membership organizations or associations of professions.
Corporations and unions can not make political contributions or expenditures related to federal elections . However, the law allows them to form political committees that they can make contributions and spend money on behalf of any candidate.
These committees can only solicit contributions from individuals associated with related organizations or sponsors.
PAC committees not connected - are not sponsored or associated with any of the above organizations and can solicit contributions from the general public.Unconnected PACs can receive limited financial and administrative assistance from any sponsoring organization other than a corporation or a union.
For members of Congress , these committees are known as leadership PACs, and are formed to support candidates for various positions in government.
Political leadership committees are funded, managed and controlled by a candidate or in government, but does not include committees of political parties. Since 2008, the leadership PACs must disclose who the candidates that sponsor.
Voter participation rates.
Voter turnout is the percentage of eligible voters who cast a ballot in an election. (Who is eligible varies by country, and should not be confused with the total adult population. For example, some countries discriminate based on sex, race, and/or religion.
In spite of significant study into the issue, scholars are divided on reasons for the decline. Its cause has been attributed to a wide array of economic, demographic, cultural, technological, and institutional factors. There have been many efforts to increase turnout and encourage voting.
Number, severity, and location of government protest.
Colombian authorities on Wednesday reported that poverty levels in the country are lower than those of the previous year.
According to the Department of planning (DNP) and the Department of statistics (DANE) show a reduction of 2.9% of people living in poverty in Colombia when comparing July 2013 to June 2014, to figures from 2012-2013.
DANE reports that figures fell by 2.4% in Colombia cities and 4.4% in less populated areas.
Colombia is the third most populated country in Latin America, with an estimated population of 47.1 million. According to international charity organisation the World Food Programme (WFP) 75 percent of the population live in urban areas.
Despite its middle-income country status, 23 million Colombians are poor and 6 million live below the extreme poverty line.
Data provided by the World Bank shows a steady decline in poverty levels in Colombia since 2004, from nearly 47% of the population living below the poverty line in 2004 to 32 % in 2012.
http://colombiareports.com/poverty-levels-continue-fall-colombia-according-government-stats/
Colombia’s main labor unions, students, miners, truckers and farmers announced to lay down work on March 17 to protest the government’s economic policy.
The labor unions are angry with the government over the 7% minimum wage hike that was decreed by President Juan Manuel Santos after, as per usual, employers and labor unions were unable to come to a compromise.
The unions claim that the wage hike that was set just above last year’s inflation rate does not guarantee improved living conditions. Instead, the unions are concerned that a possible hike in sales taxes and further inflation will reduce workers’
The process whereby charges are imposed on individuals or property by the legislative branch of the federal government andby many state governments to raise funds for public purposes.
These changes could mean big financial penalties if you don't have health insurance. Or they could bring you big savings if you happen to own a small business. Overall, the changes to the tax code that Congress enacted last year are beneficial to consumers, according to Dave Du, vice president of consumer advocacy at TaxAudit.com.
One of the bigger changes to the tax code this year is actually a punitive one: An increase in the penalty for not having health insurance that meets the requirements of the Affordable Care Act.
That's a significant increase. For the 2014 tax year, those numbers stood at $95 and $47.50, or 1% of your taxable income. "And in 2016, it gets even worse," Friedman said.
For the 2016 tax year — the taxes you will file by
April of 2017 — the penalty for not having insurance
rises to $695 per adult and $347.50 per child, or 2.5%
of your income. The message is clear: If you don't have
acceptable health insurance, it's time to get it.
(See also: Avoid These 5 Costly Health Insurance Mistakes)
* Tax laws affect the industry, because it is mandatory that companies make this contributions to the government.
Level of government subsidies
The Colombian state aims to increase opportunities for high quality life to the most vulnerable people in the country through subsidies.
Subsidies are a contribution of money delivered one time to a household with specific characteristics. The value of the aid depends on household income and when it is independent people, it is with the level of Sisbén. The housing aid by the government ranges from 4 to 22 monthly minimum wages (2'577400 and 14'175. 700 pesos).
If you are working and enrolled in a Family Compensation Fund, this entity will help you with the process of you subsidies; the amounts allocated depend on family income.
References
Metrocuadrado,. (2015). ¿Cuál es el valor de los subsidios para el 2015?. Retrieved 17 February 2016, from http://www.metrocuadrado.com/noticias/actualidad/cual-es-el-valor-de-los-subsidios-para-el-2015-1044
Antitrust legislation
Colombia issued their first antitrust legislation at the end of the 1950s, under the political and academic influence of the United States and the European Union.
Colombia has had a competition law since 1959, the prevalence of the protectionist economic model in Latin America meant these laws were not really effective until the nineties, post-Washington Consensus, when Colombia eid a principle of free competition in Article 333 of the 1991 Constitution, changed the economic model in order to open the markets to international trade, and issued Decree 2153 of 1992, which represents a modern approach to competition law.
The antitrust legalization brings benefits for both the country and the industry, these laws permit vigorous competition keeping the sellers honest and forcing them to improve their goods and service in favorable terms. This means more benefits for the company, for costumers and society itself.
References:
Miranda Londoño, A. Antitrust Merger Policy in Colombia (1st ed.). Retrieved from http://www.lawschool.cornell.edu/research/ilj/upload/londono.pdf
Trade union countries
Colombia is one of the most open markets in Latin America as it has thirteen Free Trade Agreements currently in force, including with the United States, the European Union, Mercosur, the Caribbean Community, South Korea and Mexico
The U.S. is the largest supplier of food and agricultural products to Colombia and it is the 4th largest market for U.S. agricultural products in Latin America.
Colombia has signed or is negotiating Free Trade Agreements (FTAs) with a number of other countries, including Canada, Chile, Mexico, Switzerland, the European Union, (EU), Venezuela, South Korea, Turkey, Japan, China, Costa Rica, Panama, and Israel.
Colombia is also a founding member of the Pacific Alliance; a group formed in 2012 among Chile, Colombia, Mexico, and Peru to promote regional trade and integration. These countries, currently secondary suppliers into the Colombian food market, already enjoy preferential tariff treatment and should be considered viable competitors in the market.
A free trade agreement has its benefits or disadvantages depending on how you want to see and take things. First of all it helps economy growth and with this so do job opportunities. There will be a more dynamic business climate. The industry may take this advantages that provides free trade agreements to increasing total domestic output of goods and services. Cosnumer will beenfit to hey can now obtain a greater variety of goods and services.
Refrences:
Foodexport.org,. (2016). Colombia Country Profile. Retrieved 17 February 2016, from https://www.foodexport.org/get-started/country-market-profiles/columbia-country-profile
Sice.oas.org,. (2016). SICE: Trade Agreements. Retrieved 17 February 2016, from http://www.sice.oas.org/agreements_e.asp
African-Colombian relationships
Afro-Colombians do not form a single cultural complex. The term is a general category referring to people with variable proportions of African descent living in several regions of Colombia.
In Colombia at least 6% of Afro-Colombian and natives have a dignified work as directors or managers; in our company this can’t affect in any possible way since we’re making an inclusion within different “Cultures” in the same country, in the same way since the places they come from the educative quality is low in comparison with the capital.
The way we make possible this inclusion is making them workers that can and want to learn something new, that make their dreams come true.
References:
D., M. M. (25 de February de 2014). Obtenido de http://www.eltiempo.com/archivo/documento/CMS-13553556
Lanier, P. A. (s.f.). Obtenido de http://www.referenceforbusiness.com/management/Tr-Z/Women-and-Minorities-in-Management.html
Cancilleria. (s.f.). Obtenido de http://www.cancilleria.gov.co/ministry/strategy/compromisos
Import-Export regularities
The import and export business is an ideal occupation for those individuals who know how to sell, but who also have a diplomatic and engaging character. As sales and distribution agents in one or more countries for overseas manufacturers, importers and exporters are the matchmakers of international trade. Import and export are high-risk businesses that are vulnerable to sudden changes in politics, economics and legislation.
The changes in the exportation and importation are mainly hard to predict those are the natural disasters, non-payment, the life-span of the goods, and many more.
In our company since the tea is being produced in various countries we can have more options to buy and sell to, but the main one its Taiwan and the products are being shipped to make the final product to consume and sell.
The risk to import or export goods to another countries is that sometimes the ships may have to stop because of different reasons, and the goods might get rotten or damaged because of the movement.
References:
Kielmas, M. (2011). Chron. Obtained http://smallbusiness.chron.com/can-affect-import-export-company-43130.html
Government fiscal and
monetary policy changes.
The Banco de la República implements monetary policy by changing interest rates, which either provide or withdraw liquidity from the economy. Thus, these intervention rates are the Central Bank’s monetary policy tool and, through them, the Bank affects the market’s interest rates.
When the Banco de la República alters its intervention rates, it affects the market’s interest rates, the exchange rate and the cost of credit, thereby activating mechanisms that affect the following
· Financial markets.
· Decisions by economic agents on expenditure, production and employment.
· Expectations of economic agents, based on of policy announcements.
· The inflation rate, after a long and variable period of time.
In our company this changes may affect how economic decisions are made, some policies can have a relative high amount of taxes that could be important in the process of transformation
References:
Pettinger, T. (16 de September de 2011). Economic.Help . Obtenido de http://www.economicshelp.org/blog/1850/economics/difference-between-monetary-and-fiscal-policy/
República, B. d. (s.f.). Banco de la República. Obtenido de http://www.banrep.gov.co/en/node/22748
Government conditions in
foreign countries.
Colombia is one of the most open markets in Latin America as it has thirteen Free Trade Agreements currently in force, including with the United States, the European Union, Mercosur, the Caribbean Community, South Korea and Mexico
The U.S. is the largest supplier of food and agricultural products to Colombia and it is the 4th largest market for U.S. agricultural products in Latin America.
The governments from all the countries have different laws that make efficient or inefficient the way how the free market works, the way workers are paid and many more conditions that change how companies must act in another country.
In our company this can affect the way how our productive processes are applied in certain aspect, how complex is the changes of certain variables within countries.
References:
Shah, A. (28 de May de 2006). Global Issues. Obtenido de http://www.globalissues.org/article/57/corporations-and-workers-rights
Special local and state laws.
A special law, sometimes called a “private law” or a “local law,” refers to a law that applies only to a specific group of people or an organization. In this way it is different from general law, which applies to everyone under the jurisdiction of the elected body that made the law. For example, the crime of murder is a general law. A special law can be drafted to address concerns or needs of a particular locality within a larger region or a specific institution or government entity.
The uses of special law are many and varied. These laws often involve important issues dealing with social institutions. They can be enacted to fund or replenish pensions for government employees such as police, firefighters, and educators. They are often used to authorize emergency money for hospitals or highway departments that was not in their original budgets.
State of law is a rule that is governed by a system of laws and institutions organized around a constitution, which is the legal basis of the authorities and officials, who are subject to the rules of it. Any measures or actions must be held or be referred to a rule written
This kind of laws may or may not affect our company in various ways if that state provides to us or the officials indicated in the law.
References:
WiseGEEK. (s.f.). WiseGEEK. Obtenido de http://www.wisegeek.com/what-is-a-special-law.htm
Lobbying activities
The proposal mandates a public register for all persons performing lobby in which to proceed with the corresponding entry before starting any activity to the entity and in which also the various meetings are reported to being made for lobbying.
The bill also determines that the lobby is exercised before the Executive Branch, at regional level, with the Central Bank, Armed Forces Comptroller, the Attorney General and the National Fiscal. You are also granted to the judiciary, the electoral authorities and constitutional justice the power to make decisions or resolutions on the subject.
The structure of the law also for the targets of the lobby sets another factor in determining the applicability of this regulation, which sets out the results of the lobbying activity within those regulations, decisions of Congress, contracts and design are cited, implementation and evaluation of policies.
Another element of the project is to establish the obligation of non-discrimination by the authorities between different people doing lobby and, in turn, these were consecrated as obligations to present accurate information in the defense of the interests and to supply the respective data whom they represent and if they receive any remuneration for their management. In Britain it is doing a review of lobbyist registration and in the center of this debate the definition of lobbying is.
References
Olga Lucia Lozano. (2014). El ‘lobby’ o el tráfico de influencias: dónde está la línea. 14/02/16, de Portafolio.co Sitio web: http://www.portafolio.co/opinion/analisis-regulacion-lobby-colombia
Size of government budgets
This is the government budget, which varies annually by different factors. Clearly these assumptions may affect our business idea, as the investment on certain factors may affect us or we can also provide certain advantages and opportunities.
World oil, currency and labor markets
The USDCOP decreased 17.27 or 0.51% to 3399.32 on Wednesday February 17 from 3416.59 in the previous trading session. Looking back, the USDCOP gained 1058 or 45.19 percent during the last 12 months from 2,341.30 in February of 2015. Historically, the Colombian Peso reached an all time high of 3453.90 in February of 2016 and a record low of 689.21 in August of 1992.
Crude Oil Production in Colombia decreased to 1010 BBL/D/1K in June from 1026 BBL/D/1K in May of 2015. Crude Oil Production in Colombia averaged 688.92 BBL/D/1K from 1994 until 2015, reaching an all time high of 1035 BBL/D/1K in January of 2015 and a record low of 356 BBL/D/1K in May of 1994. The U.S. Energy Information Administration reports Crude Oil Production in Colombia.
Employment Rate in Colombia decreased to 59.52 percent in December from 60.88 percent in November of 2015. Employment Rate in Colombia averaged 54.73 percent from 2001 until 2015, reaching an all time high of 61.41 percent in October of 2015 and a record low of 48.97 percent in January of 2007. The Dane, Colombia, reports employment Rate in Colombia.
References
Trading Economics. (2016). Colombia. 15/02/16, de Trading Economics Sitio web: http://www.tradingeconomics.com/colombia/
Location and severity of terrorist activities
The severity of these armed groups from left to right, the most dangerous FARC and Bacrim be a major criminal group but not as relative and longevity as the FARC and ELN. This helps us get a picture of where the highest insecurity in this country, to perhaps avoid those areas or at least to take caution.
Local, state, and national elections
Elections in Colombia are regulated and controlled by the National Electoral Council, an organization that provides information on elections and results of those elected at the central level (President and Congress) politicians. The president is elected for a period of 4 years. Congress has two chambers: the House of Representatives has 163 members elected by popular vote for 4 years. The Senate has 102 members elected by popular vote for 4 years.
the executive power are elected the President and Vice President in a single ballot for a four-year term by direct popular vote, using a system of runoff in the event that the winner of the first round does not achieve more than 50% of the votes in his favor.
The legislative branch consists of a bicameral system. The House of Representatives has 162 members, elected for a four-year period in proportion to the number of people in each department of the country. For its part, the Senate has 102 members, elected for a four-year.
Colombia has a multiparty system, established in the Constitution of 1991 and renovated in 2003, twelve political parties, which have legal status in force for four years in case a candidate has obtained a seat in any part of the legislature.
Number of patents
A patente is the exclusive right that the state give to protect an invention, it provides exclusives rights and explode their invention and prevents that others use it without the assent of the inventor. if he/she don't want to use the patent they can sell it or give the copyright to another company and comrcilize licenced.
references:
To patent a product must be new, that dont exist worldwilde, must be an inventive step , which is to say, other than an obvious to one skilled in the art that development is the invent, the invent must be easy to manufacture by any industry, must have an industry aplication.
*for our industry we can patent anything because is something that were found, and things related with nature, natural existence is not patented.
References:
In Colombia the law whic regulkates the enviromental protection is the law 99 of 199, wich is responsible to interpose general disposition for the aproppiate maintenance to the enviroment.
The principal objective of this law is stablish mecanisisms for territorial organization and the ecological care.
Ecological biodiversity must be considered as a national heritage and any activity economic or comercial would make activities that affects the ecosyistem.
*the law does not affect the company because is protecting the enviroment, and it colaborate to a optimus development in the company.
references: Ley 99 de 1993
The reality is that national private company make a minimum input to ministerio de defensa, which is in charge making the main input at military forces. the input that the private company must be intertwined with public company, this is the input that is destinied to the military forces.
with the postconflict, private company must make a huge effort to the input because the sustainability of military forces will be more high.
references:
"Artículo 53. El Congreso expedirá el estatuto del trabajo. La ley correspondiente tendrá en cuenta por lo menos los siguientes principios mínimos fundamentales: Igualdad de oportunidades para los trabajadores; remuneración mínima vital y móvil, proporcional a la cantidad y calidad de trabajo; estabilidad en el empleo; irrenunciabilidad a los beneficios mínimos establecidos en normas laborales; facultades para transigir y conciliar sobre derechos inciertos y discutibles; situación más favorable al trabajador en caso de duda en la aplicación e interpretación de las fuentes formales de derecho; primacía de la realidad sobre formalidades establecidas por los sujetos de las relaciones laborales; garantía a la seguridad social, la capacitación, el adiestramiento y el descanso necesario; protección especial a la mujer, a la maternidad y al trabajador menor de edad. El estado garantiza el derecho al pago oportuno y al reajuste periódico de las pensiones legales. Los convenios internacionales del trabajo debidamente ratificados, hacen parte de la legislación interna. La ley, los contratos, los acuerdos y convenios de trabajo, no pueden menoscabar la libertad, la dignidad humana ni los derechos de los trabajadores. " (constitucion political de colombia).
This article of the constitucion politica de colombia is the base most important about regulation of main rights of the employee and employer. the equal treatment of employees will be regulated specifically by el codigo sustantivo del trabajo which is stipulated specifically every single of rights and homeworks of workers.
references: constitucion politica de colombia, articulo 53