PEST Country Analysis: Cuba

PEST Country Analysis CubaACKNOWLEDGEMENTFirst and foremost I thank my instructor who has assigned this term paper to bring out my creative capabilities.I express my gratitude to my p atomic number 18nts for being continuous source of encouragement and for all their financial support given to me.I would give c are to acknowledge the assistance provided to me by the library staff of Lovely Professional University.At last my heartfelt gratitude to my friends for helping me to ex unitaryrate my prepare in time.BUSINESS ENVIRONMENTCountry OriginCuba is one of the largest islands in the Caribbean which was once inhabited by tribal large number when Christopher Columbus visited the island during his low gear voyage. He discovered it and declared it as a territory of Spain 1762 this country was briefly held by Britain before being returned in exchange for Florida. A series of rebellions occurred during the 19th century which failed to end Spanish rule, but increased tensions among Spain and the United States, resulted in the Spanish-Ameri tin can War, finally led to Spanish withdrawal, and in 1902, Cuba gained formal independence.American trade dominated Cuba during the first half of the 20th century. It was helped by US government policy measures assuring influence over the island. In 1959, Dictator Fulgencio Batista was overthrown in a revolution led by Fidel Castro. Cuba-United States dealing froze while the island showed its faith towards the Soviet Union, which kept its economy running in spite of being US against Cuba. After the dissolution of the east-west-confrontation Cuba re primary(prenominal)s as one of the only Communist countries in the world.Past businessCuban business has mainly revolved nearly United States Soviet Union. Before 1958 everything was allright between US and Cuba and trade was carrying smoothly between them.In March 1958, when an armed conflict broke out in Cuba between rebels and the Fulgencio Batista government an arms embar go has been in effect. In July 1960, in response to Cubas new revolutionary governments seizure of US properties, the United States reduced the Cuban spell quota of brown sugar by 7,000,000 tons, under the Sugar Act of 1948 the Soviet Union responded by agreeing to purchase the sugar instead, as Cubas new government keep to take further actions to confiscate American businesses and privately owned property.In 1963, the 1963 U.S. embargo was reinforced in October 1992 by the Cuban Democracy Act (the Torricelli Law) and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms-Burton Act) which penalized foreign companies that did business in Cuba by preventing them from doing business in the US. The justification provided for these restrictions were that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States.The European Union resented the Helms Burton Act because it felt that the US was dictating how an other(prenominal) nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in regard of negotiating a solution.PEST Analysis(P)olitical factorsCuba is a communist state. The departments of the state and the Cuban Communist Party are closely connected and their power is mainly devolved from the executive director Committee of the Council of Ministers.Their National Assembly which has legislative e powers consists of 614 members. Their next elections for the provinces and nation are due in January 2012, the municipal elections in April 2010, even though in that respect is only one legal party which is namely the Cuban Communist Party (PCC). The head of state and government of Cuba is Ral Castro Ruz.(E)conomic factorsThe consumer prices, or largeness rate, rose by 3,4 % in 2008 which is, compared to other countries, an average figure, because they are number 47 on the world list.The Cuban labor force counts 4.962 million people o f which 78% work in the state sector and 22% in the non-state sector. This figure scores them number 74 in comparison to the labor forces well-nigh the world.The unemployment rate is low compared to other countries as they only have 1,6 % jobless people and rank place 13 in the world. This rate even ameliorate by 0,2 % from 2007 to 2008.The buying power, GDP per capita, of each Cuban was $9,500 in the year 2008. Compared to other countries they rank place 108 in the worlds list, but seeing that the values modify over the years from 2006 until 2008 by $1,000 per capita, their score is still positive.Cuba produces several agricultural products such as sugar, tobacco, citrus, coffee, rice,potatoes, beans and livestock. Main export goods are nickel, fish, citrus, coffee, tobacco products, sugar and its by-products and medicines. A 2008 estimate for their export of goods is $3.78 billion which makes them number 119 on the list of countries by exports.Their main export partners are Chin a, Canada, Spain, the Netherlands and Iran. Goods that have to be imported are petroleum, food, machinery and equipment and chemicals.Their main import partners are Venezuela, China, Spain, Canada and the USA.(S)ociological factorsCuba has a population of estimated 11,451,652 people. The population grows by 0.233 % each year.18,3 % of these people are between 0 and 14 years, 70,4 % are between 15 and 64 years old and 11,2 % are 65 years or older. Therefore the average age is 37,3 years. 65,1 % are white, 24,8 % are mulatto and mestizo and 10,1 % are dumb (2002 census).The most dominant religions are Roman Catholics and Protestants. Nearly the whole population is able to read and write (99,8 %) at the age of 15 which enables them to pursue a good education.The majority (76 %) of the population preferably lives in urban areas.(T)echnological factorsCuba is a recognized leading country in the field of bio engine room, but there are still sectors that lack development.Internet main co urse is for example only provided by one provider at high costs which shows an inadequate telecommunications infrastructure.The information engineering science system in Cuba still has to be improved, because the profitable sectors such as tourism and biotechnology require good and continuously updated communication structures and instruments which are non sufficient at the moment. Castro sees that modern communication and computer networks are necessary for the economy and is willing to open new doors in order to make this possible. (Information technology in Cuba, 2009)Cuba World EconomyIn 2005 Cuba had exports of $2.4 billion, ranking 114 of 226 world countries, and imports of $6.9 billion, ranking 87 of 226 countries.Its major export partners are China 27.5%, Canada 26.9%, Netherlands 11.1%, Spain 4.7% (2007).Cubas major exports are sugar, nickel, tobacco, fish, medical products, citrus, and coffee imports include food, fuel, clothing, and machinery.Cuba presently holds debt in an amount estimated to be $13 billion, approximately 38% of GDP.According to the Heritage Foundation, Cuba is dependent on credit accounts that turn up from country to country.Cuba holds 6.4% of the global market for nickel which constitutes about 25% of total Cuban exports. Recently, large reserves of oil have been found in the compass north Cuba Basin.BUSINESS CULTURE OF CUBADRESSDressing is quite informal in for both men and women,For men Depending on the situation, a guayabera fit out with nice goldbrick may be as formal as it gets. Business casual for a warm climate should suffice.For women A pair of pants and nice shirt should do. Skirts are fine as well.Jeans and business casual attire are generally acceptable.TITLES AND BUSINESS CARDSTitles are very important and it is best to shell out people directly by using their professional title (or Mr., Mrs., or Miss) followed by the surname.It is advisable, although not required, to have one side of your business card transl ated into Spanish. stupefy your business card with the Spanish side facing the recipient.There is no specific ritual surrounding the giving of business cards.MEETINGSArriving on time for a meeting is important even though you may have to wait 30 minutes or more.There is usually 5-15 minutes of small bubble before getting down to business. It is best to allow your host to begin the business discussion.It is considered acceptable to interrupt someone who is speaking.NEGOTIATIONSCubans value relationship building and consonance so it is important to avoid hard selling, pressure tactics and any sort of conflict or confrontation.Decisions are made from the top down and can take sometime.GIFT GIVINGGifts are not brought to a first meeting.When giving gifts it is best to bring something very modest as anything else could be misconstrued. intercourse STYLECubans tend to be direct and some what louder than what the norm is in North America.GESTURESCubans tend to speak very quickly and lou dly. They use their hands and bodies for accent when speaking and tend to be emotionally expressive.Cubans will point by puckering their lips in the direction or person they are referring to.Wrinkling or scrunching up of your wind up usually means, huh or what?Geert Hofstedes ModelAfter seeing some of the business culture and countrys culture we can draw some conclusions based on the quintuple dimensions of the above mentioned model.POWER DISTANCEAs Cuba is a Communist country, it is expected to have higher power distance than other capitalist countries. Geert Hofstede has not conducted his eyeshot in Cuba so there arent any scores regarding it.INDIVIDUALISM Vs. COLLECTIVISMIn Private sector individualism is practiced to achieve results with greater efficiency. era the majority of Cuba which is communist in nature has a greater faith in collectivism.LONG TERM ORIENTATIONOn observing the past and emerging business culture of Cuba, we can easily comprehend that in past it was mo re of short term oriented. Now while the country is growing , it has grow more of a long term oriented country.HALLS MODELHigh ContextCubans seem to pretty much fall in this category. I would like to state that because they behave in the following mentioned way -Less verbally explicit communication, less written/formal informationMore internalized understandings of what is communicatedMultiple cross-cutting ties and inter contributions with others pine term relationshipsStrong boundaries- who is accepted as belonging vs who is considered an outsiderKnowledge is situational, relational.Decisions and activities focus around personal face-to-face relationships, often around a cardinal person who has authority.HRM PRACTISES IN CUBAHuman imagination management (HRM) practices in Cuba are still incipient and close to what may be called the traditional Soviet-style model. In other words, HRM in Cuba mainly comprises a set of practices that emphasise cost control and administrative concer ns, resource allocation being controlled by the administrative hierarchy and not by the market characteristics.Additionally, human resource management is an undervalued function compared to other areas. Those who are not good enough for anything else, go to the HR function, as one manager noticed.Within the last few years, and in the context of perfeccionamiento empresarial, new concerns with the quality of human resource management have arisen. The new goals, in industries that compute to achieve a competitive position in the international arena, include the development of staff competencies.Capacitacion (qualification) became HRMs recent major buzzword in the country. Qualification is the major human resource management challenge for Cuban companies, and is viewed as a necessary means for achieving a series of new business goals, including quality, customer military service and independence in the execution of work, all of which are new descriptors in the national business vocab ulary.The new market-oriented logic, which is emerging particularly in the globally clear tourism sector, is far from being the normal. That is possibly one of the reasons why so many people try to work in tourism, the other being easier access to foreign currency. This has led to what is called the inverted pyramid a hotel waiter can earn more money (in tips) than the best university educated specialist or work hero.Macro-level administration of human resources is thus being challenged by micro motives and is forcing companies to develop and implement incentive systems that stimulate individual motivation, while trying to respect the ideological orientation towards a more altruistic and disinterested motivated behaviour, such as the one mentioned above.In fact, as a traditional rule of the Cuban enterprise, incentivos (incentives) are non- fabric. They are called spiritual incentives, and may include a letter, a diploma, an appreciation from the ships company or, at a more mater ial level, a dinner party including lobster. Managers attitudes towards the effectiveness of material rewards are highly ambivalent. On the one hand, they deny the importance of material incentives. On the other hand, they enthusiastically refer to the possibility of obtaining material rewards in the more progressive firms.BUSINESS GROUPS OF CUBASHERRITT INTERNATIONALSherritt International is one of the biggest business giants of Cuba that operates in Cuba Canada. Sherritt International Corporation is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas, and electricity. It also licenses its proprietary technologies to other metals companies. Sherritts 293.1 million common shares trade on the Toronto Stock Exchange under the symbol S. The company also produces oil from assets in Cuba, Spain and Pakistan, and manages 376 megawatts of power generation capacity in Cuba.HUMAN RESOURCE MANAGEMENT PRACTISESThe most important HRM practices practic ed in Sherritt areHR planning (i.e. to forecast and foresee the future business and employee needs and plan for them)Recruitment and selection job descriptions, selection tools, background checks, offersCompensation (i.e. methods, consistency, market)Employee relations (i.e. labor agreements, performance management, disciplinary procedures, employee recognition)Mandated benefits (i.e. social security, unemployment insurance, workers compensation, COBRA/HIPPA)Optional group benefits (i.e. insurance, time off benefits, flexible benefits, retirement plans, employee assistance programs, perks)Payroll (i.e. internal vs. outside options, compliance)Recordkeeping (i.e. HRIS, force-out files, confidential records, I-9, other forms)Training and development (i.e. new employee orientation, staff development, technical and safety, leadership, tuition reimbursement, career planning)Employee communications (i.e. handbook, newsletter, recognition programs, announcements, electronic communication )RECRUITMENT SELECTIONThe subprogram of hiring begins when new recruits are sought and ends when their applications are submitted.The result is a pool of applications from which new employees are selected.CompensationCompensation is the remuneration provided to an employee in return for his/her component part to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.TrainingTraining is also provided for increasing the knowledge and skills of people for a specific purpose. It helps the trainees ingest new skills, technical knowledge, and problem-solving ability etc. It also gives an awareness of the rules and procedures to guide their behavior thereby improving the performance of employee on present job and prepares them for taking up new assignments in future.Performance AppraisalPerformance appraisal is a method of evaluating the behavior of employees in the work spot includi ng both vicenary and qualitative aspects of job performance. A process in which employees strengths and weaknesses are identified to improve the performance on the present and future jobs. Performance appraisal is a systematic review of individual or a groups performance on the job.Pay ringlet butterfly SectionAfter employee placement/joining the recruitment section handovers the details of the employees enclosed in a file to the payroll department. Pay Roll process starts from 25th of every month. First part is attendance, which will be coming from last 26th to 25th of the month. Salary is paid for 1st to 31st but attendance is calculated from 25th to 26th of the month. The Pay Roll department then looks after the following aspect of the employees.HSEQHEALTH, SAFETY, ENVIRONMENT AND QUALITY (HSEQ)Every job involves certain risks. In order to provide a safer and sizable atmosphere at work place HSEQ is strengthened at all levels in the company.There is a possibility of occurrence of risk either from external and internal sources. External sources hear referred to infrastructure and internal sources referred to Behavior of employees. HSEQ is involved in regulation and controlling the risks involved in jobs.Bibliographyhttp//en.wikipedia.org/wiki/South_americahttp//www.mfat.govt.nz/Countries/Latin-America/Cuba.phphttp//en.wikipedia.org/wiki/List_of_countries_by_exportshttp//www.cia.gov/library/publications/the-worldfactbook/geos/cu.htmlhttp//www.cuba.com/index.php?catid=280cuba_info_record=Useful%20information%20of%20http//www.indexmundi.com/cuba/demographics_profile.htmlhttp//www1.american.edu/carmel/ms4917a/cuba.htmhttp//www.phpclasses.org/browse/country/cu/