This research study exposes in a singular way the application of the Strategic Management process in a private company in the Ica Region, Peru, so through the following lines of research, we try to introduce ourselves to the problem that has generated serious damage and inclement events in companies nationally and internationally. In other words, we approach the international economic and financial crisis from the point of view of private companies.
Thus, after a review of the concepts of strategy, structure, organizational culture, leadership, among others; that make up the framework of the strategic management process, and after reviewing the antecedents of the agro-export company, the analysis of the causes that have generated the problems is carried out, and we indicate the approach of goals and objectives, with which the company will face the crisis. For this purpose, we deploy the application of strategies under a combined model, of formulation and implementation of business management methods, integrating in this process the strategic, tactical and operational levels that interact between them; using, among others, the “benchmarking” instruments, comparing indicators with other companies in the sector of similar magnitude and the “empowerment” of workers,to reverse the situation of temporary decline of the most important agro-export company in the southern part of the country.
We stick precisely, in a concrete and real case, determined by the Sociedad Agrícola DROKASA SA, since it is one of the most important, large and complex companies in Peru, especially in the city of Ica, so its diagnosis problem and its solution, could help other companies in the same sector, to apply their formulas used by management, focused on research, derived from the Strategic Direction, in order to contribute with a grain of sand, the solution to the economic crisis and international financial.
For these reasons, aware that this case study, entitled “The Strategic Direction in Times of International Financial and Economic Crisis. The case of an agro-exporter in Peru ”, does not pretend to be the only tool with which the crisis can be faced, due to the delimitation of the investigation, but rather, only to be a contribution to the great baggage of information to the management of the company, so that they can address the problem, and therefore, give it a solution.
In no way do we intend to point out that the thesis has the absolute truth, or that we are covering the entire reality that the problem raises, without the possibility of being treated through other scientific matters that the new modern administration grants us. But we only intend to give a contribution, to become aware of the great problem in which Peruvian companies find themselves, and even more those of the agro-export sector, and how through the Strategic Direction it is possible to face in a certain way the international crisis.
In the thesis, therefore, we address part of the academic terms used in Scientific Administration with respect to Strategic Management of Companies, then we do a study of the way in which the studied company is currently organized and what are its competitive and comparative advantages, its virtues and managerial capacities, and disadvantages, with which it is currently facing the scenario of economic and financial crisis, concluding with the solution through the Strategic Directorate of the problems caused by the crisis itself.
For these reasons, we agree with what was stated by Hugo Eduardo Jara Facundo in his master's thesis: Strategic Management and Business Sanitation. The PETROPERU 2001-2005 case, when it states that; The achievements in companies that apply successful strategies are not the exclusive work of a single senior executive, but of an entire management team and other levels of the organization, committed to a vision, mission and strategic objectives, which are formulated collectively and whose implementation It is carried out interactively, reviewing their compliance through indicators, correcting, strengthening and renewing strategies, confirming or correcting goals, with genuine participation in open discussions at different levels of the organization.
Foreword
This work is the result of the final master's project carried out on the organization 'Sociedad Agrícola DROKASA, S.A' , Ica, Peru. In addition, this thesis is the last requirement of the master's degree in strategic management of the Ibero-American University Foundation, which must be approved by the Author.
The company 'DROKASA S.A', seeks to establish a strategic management model of reaction to the economic crisis of the first decade of the new millennium, based on a business model that responds to the range of scenarios that are presented within a environment of economic pressure, such as the one that has occurred since 2007 to date.
Consequently, this present case study has as its main purpose to develop a strategic management model that allows responding to threats from the economic, political, social and technological environment, which the crisis environment reveals within the performance of agricultural society DROKASA SA
Chapter 1: Introductory Framework
1.1 introduction
The business environment has become, for the vast majority of sectors and companies, "turbulent" (Simpson, 2002); For this reason, the way of seeing the business landscape by many entrepreneurs has changed, since if for some this statement is a problem, for many others, it is an opportunity to restructure and transform into more successful companies.
In times of economic globalization, where the large companies, banks and financial institutions of the United States, demonstrated to the world, to be the pioneers and standard bearers of the capitalist economy - a globalized world and an era of knowledge - it is now the first country to manage a recession economic international, larger than the history of mankind has known. Generating a great crisis, mainly due to the mismanagement of the North American economy with global impact.
This statement is reflected in the following possible causes:
- Excesses in the use of credit and monetary expansion, (Excessive indebtedness of families) Fall in the real estate markets Excess inventories Budget deficit Rising inflation Devaluation of the dollar Change from optimism to pessimism of society Increase in unemployment. Decrease in the rate of private consumption. Negative savings of families.
It is possible that this economic disorder caused in the United States, could have a significant impact on the economy and finances of companies worldwide, and even more so in Peru; whose economy is small compared to other countries in the region, such as Brazil or Chile, for example.
Thus, currently it can be seen how the economic and financial crisis in the Peruvian market has become generalized and exacerbated, to such an extent that agro-export in Peru has suffered a drop in this last year, especially in those companies dedicated to the export of asparagus and table grapes, as in the case of the company Sociedad Agrícola DROKASA SA, facts that have a significant impact on the form of the organization, and business management, which forces to redefine its organizational structure, to over weighing the storm caused by the global economic recession.
Agro-export in Peru has made the inflationary effects of the 80's and the economic growth due to the sale of state-owned companies of the 90's, considered small economic problems, while through this agro-export medium the Peruvian State has been growing macroeconomically at a rate of almost 8% per year in the Gross Domestic Product (GDP).
It is for these reasons that for the year 2008, Peru had approximately national reserves of US $ 35,000,000,000 (thirty-five billion US dollars). Fact that motivated government officials, from the President of the Republic to the Ministries, to point out that the problems of the economic recession and the international economic and financial crisis were not going to affect the Peruvian economy; This is a big mistake since the North American market has been the main consumer and buyer of Peru's agro-export products for many years. In this sense, if this country with such a large economy has liquidity problems due to an economic recession never seen before since capitalism appeared in humanity, it cannot be possible that Peru,With a small economy you can be exempt from the problems of the global economic and financial recession.
The purpose of this work is to implement a Strategic Management system for an Agro-export company. Through this system, it is intended to provide solutions to the problems that have caused the International Economic and Financial Crisis, facilitate action mechanisms to face this crisis, identify the risks that this problem concerns and how to solve them without the company losing internal and external credibility, reorient the organization of the company, use specialists and above all, reduce the costs of production and distribution of products. To fully understand the objectives of this thesis, we have made the following hypotheses:
- The international economic and financial crisis is the main factor that could cause the collapse of Sociedad Agrícola DROKASA SA, for which it is necessary to make a new strategic direction proposal, based on strategic planning to effectively face the global external economic recession. General Hypothesis It is possible that by modifying the strategic management system based on strategic planning, Sociedad Agrícola DROKASA SA will effectively face the economic and financial crisis Specific Hypothesis Determine if effectively with strategic planning it is possible that Society
Agrícola DROKASA SA faces the international financial and economic crisis. Specific hypothesis.
It is for these reasons that we consider it necessary to carry out this research work, because we want to understand what effects this global problem called: economic and financial crisis is causing, and its impact on Peruvian agro-exporting companies. And how can these problems be tackled with a business policy based on Strategic Management.
These guidelines of the Strategic Management will consequently be the pillars that will provide an effective solution to the crisis, they will be inexhaustible sources of order and business management, which will allow the necessary guidelines to be given to the company officials, to create new ways of organizing and direct the company in the sector to which they belong, and thereby reactivate production, marketing, export, the internal economy, and effectively face the recession due to the crisis.
Let us not forget that if the guidelines for the solution to the crisis are not given, it is more than likely that the company could collapse and disappear from the market, as has already happened with several agro-exporters in the Ica region; This truth, in the same way, would be given regarding the way of facing the crisis by the directors of Sociedad Agrícola DROKASA SA in the economic-financial crisis of the international market.
1.2 Description of the problem area
Sociedad Agrícola DROKASA SA, currently one of the number one agro-export companies in the Ica Region, is the standard bearer in the export of asparagus and fresh grapes from the southern part of Peru; and consequently, one of the largest companies nationwide. Facts that with the passing of time have opened a set of markets, mainly that of the United States, which first, thanks to the Andean Tariff Preferences Law (ATPA) -then called with the acronym ATPDA-; and second, with the free trade agreement, signed between the government of Peru and the North American government, they helped to increase the production and export margin of the products produced and packaged by the company.
So much so, the export support has been growing in Peru, which currently has free trade agreements signed with Thailand, with the People's Republic of China, and yet to be signed with Chile, Singapore and other countries; that the corporate partners had to buy other farms outside the city of Ica, specifically in the city of Barranca and Supe, north of the Peruvian Capital (City of Lima), so that with this they increase their production capacity, obtaining with this, great dividends and a good status within Peruvian companies.
However, with the evolution of the international economic and financial crisis, which arose in 2007, prolonged until 2009, where international markets have fallen, causing the prices of raw materials such as gold, copper, iron and others crash on the stock markets. Just as second-order food consumption products such as table grapes, avocados, asparagus, and paprika lose their commercial value due to the economic recession, this has caused serious economic and financial problems for several agro-export companies throughout the world. Peru.
Consequently, the company Sociedad Agrícola DROKASA SA is affected in the same way.For these reasons, and looking to the future, the partners (shareholders) of the company had to meet on several occasions with the senior officials of the corporation, to establish and organize a set of measures within the company, aimed at dealing with the international crisis in the best way possible. And within this, there is the need to propose a set of actions, to partially shovel the problem. In this sense, this research work is carried out, in order to point out the path that will solve the crisis based on Strategic Management, making use of knowledge and changes to be made in the organization, planning, marketing, management, leadership, logistics, among others,Inside the company.
Then, through this research work, the concerns that exist about the growing interest in the academic literature, about the management of companies in crisis, are resolved, considering the different approaches to the subject from an organizational, strategic, economic or Social.
Figure 1 Cause-effect diagram
Own source.
The company Sociedad Agrícola DROKASA SA faces the risk of disappearing from the market due to the international economic and financial crisis. In this regard, senior management has asked the various levels of the administration to determine which is the best strategic management model to get out of the hole posed by the international financial and economic crisis.
In this sense, in order to schematize and present the problem in a more precise way, in this study, we resort to the 'Ishikawa Diagram', also called a cause-effect diagram, in order to diagram the causes and effects generated by the use of the strategic management model in Sociedad Agrícola DROKASA SA to face the international economic and financial crisis.
According to the cause-effect diagram, it can be determined that management is in crisis, as long as it does not find the solution to the problem that arises, to the point of requesting that actions be taken to find the solution through application of a strategic management model. Also, it has been determined that the crisis has generated the desertion of the workforce in the cultivated fields, with which the crisis worsens for the company.
People who previously saw the possibility of working in agro-exports because they received their salaries in a timely manner, see that companies with the crisis are delaying to pay them, so they prefer to work in other areas that the city of Ica allows, in the mining and fishing that has improved their working conditions. Generating with this, a labor shortage never before seen in agro-exports in Ica.
Banks, as well as finance companies and municipal savings banks, suffer in the same way the international economic crisis, which is why they currently do not provide bank loans or loans, but resorting to various requirements that were not requested before the crisis, this situation has caused havoc in the company, because it does not have liquidity to finance its productive activities, having to resort to their own money in this case through more contributions by the company's shareholders.
In this sense, the company is studying how to diagnose a model in order to propose a strategic direction that allows it in part to shovel the problems generated by the international crisis.
In the same way, it has been possible to determine that the lack of labor has decreased the productive capacity of the company, but what is worse, is that the stable staff that the company currently has has decreased its production due to the fact that they are more worried about their personal debts, and not about the company; Sociedad Agrícola DROKASA SA having to resort to training to promote the production of the company's stable staff.
1.3 Delimitation of the problem
The company in its various forms of organization, in its various forms of management and different forms of business strategies, faces internal and external problems that, due to their magnitude, lead to the collapse of the company.
The international economic and financial crisis of recent times is a very serious problem that Peruvian companies have experienced today, since it is focused directly on the economy of families, the economy of companies and the economy of the countries. So we could say that it is a scourge that has caused the bankruptcy of many companies worldwide, bringing with it a lack of work, social crises and desolation.
This research work is determined by defining the focus of the problem, pointing out what its causes-effects are and how Strategic Management is the way to provide an effective solution to the international economic and financial crisis.
All these events that seem isolated, have a single origin which is the international economic and financial crisis, so the company suffers its ravages, consequently having to resort to the application of a strategic management model oriented to strategic planning.
1.3.1 Spatial Delimitation. Due to its essential characteristics, this research will be developed in accordance with the various guidelines established by the Strategic Directorate in a particular company called Sociedad Agrícola DROKASA SA of the Ica Region.
1.3.2 Temporary Delimitation. This research study began in August 2008 and is culminating in August 2009.
1.3.3 Socio-Business Delimitation. Agro-export companies are vital entities in the development of the local economies where they carry out their activities. For this reason, the Agrícola DROKASA SA society plays a fundamental role in the city of Ica, as it facilitates the creation of jobs for approximately 5,000 families. For what its business delimitation is given by the negative repercussion that the company would bring about bankruptcy, many families would be left without money to face the basic needs of food, clothing and housing; Likewise, it would be the injured Peruvian State itself and it would be one less company for which taxes are obtained.
1.4 Systematization of the Problem
1.4.1 General Problem. What is the best Strategic Management model that Sociedad Agrícola DROKASA SA should use to face the international financial and economic crisis?
1.4.2 Specific Problems. What is the degree of application of the Strategic Direction in Sociedad Agrícola DROKASA SA? To what extent is the perspective of the clients of the Strategic Management applied in Sociedad Agrícola DROKASA SA? What is the degree of application of the perspective of internal processes of the Strategic Direction in Sociedad Agrícola DROKASA SA? Is the learning and innovation perspective of the Strategic Management applied in Sociedad Agrícola DROKASA SA? What is the effect of applying the Directorate
Strategic in the productivity levels of Sociedad Agrícola DROKASA SA?
1.5 Objectives
All research has an end, related to the achievement of objectives, but at least we can always differentiate between the theoretical end and the practical end. Now it is a question of facilitating the understanding of these objectives through the detailed exposition of the specific questions that motivate the theoretical and empirical analysis, as well as the general hypothesis of the present investigation.
In the first place, we intend to deepen our understanding of the strategic management process to determine all its elements, phases and relationships, with which to develop a theoretical pattern or model that serves as a reference, both for its application in a specific function (that of human resources) and specific organizations (agro-exporters).
Second, this theoretical model of Strategic Management will be contrasted with the real model or models that we will obtain from the empirical research carried out in Sociedad Agrícola DROKASA SA, to achieve the objectives that define the specific hypotheses of this Thesis.
1.5.1 Main Objective
Identify, determine and specify the best Strategic Management model that Sociedad Agrícola DROKASA SA should use to face the international economic and financial crisis.
1.5.2 Specific Objectives
- Present and explain the various models of Strategic Management that Sociedad Agrícola DROKASA SA could use to face the international economic and financial crisis Fully identify which is the appropriate model of Strategic Management that Sociedad Agrícola DROKASA SA could use to face the international economic and financial crisis Establish the favorable or unfavorable results according to the Strategic Management model that Sociedad Agrícola DROKASA SA could use to face the international economic and financial crisis Establish a Strategic planning process according to the Strategic Management model that Sociedad Agrícola DROKASA SA could use to face the international economic and financial crisis.
1.6 Justification and importance of the case study
This research work is justified because it allows the company Sociedad Agrícola DROKASA SA - regardless of the reality of other companies in the agro-export sector - to identify the weaknesses and strengths of the areas of the production process, collection, distribution and commercialization of the company, and thus, determine what mechanisms and tools of the Strategic Management can be used to face the international economic and financial crisis.
Similarly, this project aims to show that it is important to continue with postgraduate studies: master's and doctorate; because knowledge in the various areas of science –especially in business administration- is changing faster and faster, so that those who do not constantly train are less and less professional. Let's not forget that we are immersed, in the era of knowledge, where information is more direct and closer to people, whether through written mechanisms, audiovisual systems, computer mechanisms and the Internet. Likewise, the present research work is justified, because it is intended to help find alternative solutions to the ravages that the global economic crisis has caused in the company of which the author is part, and collaterally,serve as a model for the other agro-exporters in the city of Ica; while they are immersed in the same ravages caused by the crisis.
In this sense, it is worth mentioning that Strategic Management is a set of tools designed by the discipline of administration, which constitutes a system of measurement, adaptation, evaluation and business performance that plays a vital role in the strategic system of business management.
Although practice has shown that in top-tier companies that have correctly applied Strategic Management, these tools have become an important factor in the success of the organization. However, we can affirm that in our country the experience has given good results in some private companies, particularly in Banks, clinics and hospitals and service provision companies, but still very scarcely in the Agro-export Sector of the Ica region.
That is why the interest arises to develop this thesis that allows evaluating the application of strategic direction in one of the most important sectors of the Ica Region, such as agro-exporters, and to verify whether this management model can directly affect the productivity of one of the most important agro-export companies from Ica.
With the proposed study, it will contribute to the theoretical debate on the advantages of Strategic Management and its applicability in companies, as well as to validate the theoretical approaches that exist in the specialized literature on this subject. Likewise, valuable information will be provided from the officials and administrative workers of the agro-export companies investigated, for making decisions related to the possibility of using this management tool.
The present research work is also justified, since Peru is currently facing collaterally the onslaught of the world economic crisis, which has generated a high degree of economic recession throughout the South American region; and even more so in developed countries like the United States and all of Europe. This has led to the commitments assumed to purchase agro-export products produced in Peru, entering a state of lethargy, which has caused many products already exported abroad to be returned due to the lack of purchase (money) of the companies from Europe, Asia and the US.
Thus, in a very unfavorable framework for non-traditional products companies in Peru, their production has been affected, to such an extent that many of them have had to close their production centers, due to the imminent bankruptcy due to lack of placement of your products abroad. And the company Sociedad Agrícola DROKASA SA, whose export products are called non-traditional, is not exempt or exempt from this reality, insofar as it produces, markets and exports agricultural products such as fresh asparagus, avocados and table grapes. Consequently, he has to turn his gaze within the company and make the corrections and refinements of the organization and propose a new policy of business strategic management to face the international economic and financial crisis.
Modern Administration focused on Strategic Management, as a source of institutional direction, plays a fundamental role in the creation, development and purposes of companies. Consequently, the strategic direction, which is part of the administration, gives it a managerial approach -of perspective and development-, as it is the central axis where the business foundations are founded.
1.7 Scope
It is proposed to provide suitable and functional solutions, to meet the objectives indicated above, to contribute to the strengthening of business relations through the Strategic Management and make improvements in the company, to overcome the international economic and financial crisis.
This solution is aimed at Sociedad Agrícola DROKASA SA of Ica, and is based exclusively on consulting to improve the company's customer service, proposing the design of the tool and the appropriate architecture with the following characteristics:
Allow the business organization appropriate to the budget problems caused by the international financial and economic crisis.
Capture, analyze and transform company data and channel it into the ideal tools to face the international financial and economic crisis.
Provide information for the commercialization and promotion of the company's products, in order to keep companies that are already our clients in commercial captivity and generate coverage of new companies as potential clients.
Extend the horizons of the company to a global economy environment.
The consulting work does not contemplate the implementation of the tools, nor the legal aspects that influence the financial transaction that gives rise to the Strategic Management.
1.8 Possible solutions to the problem
The International Economic and Financial Crisis has caused serious damage to the company Sociedad Agrícola DROKASA SA This is due to the fact that the workforce available to work the fields has suffered a considerable setback, because the staff prefers to work in other more productive areas. profitable and that do not have the problem of possible lack of money to pay their fees.
On the other hand, banks, finance companies, municipal savings banks and rural savings banks in Peru have stopped providing financing to agro-exporters (for a certain time), because they know that when there is an economic recession in the countries that consume these products, there is no cash in the population to acquire them. Bringing with it a setback in the per capita consumption of asparagus and table grapes in consuming countries. A concrete example of this fact was reflected when Sociedad Agrícola DROKASA SA managed to export a certain amount of container with table grapes and asparagus to the United States, which after a while were returned for non-payment, generating serious economic damage to the company.
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