Original article

Export management procedure for the electronics industry in Cuba

0009-0002-5765-3398Iván González Pita¹  , 0000-0001-7956-5079Carlos Cesar Torres Paez²  , 0000-0002-9733-4730Yaricel Barrios Cruz^{2  *} 

¹ Filial Copextel Pinar del Río. Pinar del Río, Cuba.

² Universidad de Pinar del Río "Hermanos Saíz Montes de Oca". Pinar del Río, Cuba.

Abstract

In the Bases of the National Economic and Social Development Plan until 2030, the strategic axis of the nation is highlighted, related to productive transformations and international insertion, where reference is made to promoting the development of exports based on a competitive participation in international markets. The subject of research contributes to attenuate insufficiencies associated with the deployment of faculties and functions associated with the foreign trade activity to the socialist state enterprise, previously assumed by the central levels of management of the economy. This article details the procedure for the management of exports of goods and services in the "Ernesto Che Guevara" Electronic Components Enterprise. The dialectical-materialistic method was used, which allowed discovering the dialectics of the development of the process to be studied. Primary information was obtained through empirical methods. Interviews were conducted with local decision-makers linked to the export process. A diagnosis of the current state of the process of management of exports of goods and services in the company under study was made, where limitations in the process of internationalization management, scarce sources of external financing and lack of knowledge of the company's specialists and managers of the ways to develop internationalization strategies were found. The proposal provides managers with a methodological tool aimed at improving the decision-making process, based on scientific methods and tools, and contributes to improve the quality, efficiency and effectiveness in the management of this process.

Key words: internationalization management; business system; electronic components company

Introduction

Business internationalization is a multidimensional process that refers to the insertion of economic actors in foreign trade. The benefits and challenges of trade fill the opportunities of companies in their operations with matrices (^{Amorós Rodríguez, 2023}).

The growing openness and interdependence of economic systems, essentially developed since the 1980s, has irreversibly led to the globalization of the economy.

The evolution of globalization and the internationalization of companies have made it possible to other subjects different from national ones to operate abroad. This expansion of subjects includes small and medium-sized companies and has its cause in four variables that have made their internationalization possible: (1) the cheapening and access to international transport and international finance, (2) trade liberalization and the lowering of tariffs, (3) the Internet and advances in information and communication technologies, and (4) the influence of globalization and greater integration of national economies (^{Muñoz de Prat, 2019}).

Although the instability of the international economy influences international trade, Hidalgo Gallo (²⁰²²) asserted that such trade has great possibilities of maintaining lower levels than those recorded in the pre-pandemic stage. Some indicators reflect a rebound effect, which does not necessarily mean sustained and sufficient growth to compensate for the deep contradictions recorded.

Likewise, changes in the increasingly turbulent environment and growing technological advances have an irremediable influence on the implementation of new business practices focused on achieving production quality and customer stability.

Internationalization today goes far beyond the export activity of goods and services and involves companies of all sizes on all continents. The globalization of the economy and the progressive development of other forms of internationalization (joint ventures, technological cooperation, alliances...) have made the approach to the problem more complex (^{López Rizzo & Pinot De Villechenon, 2020}).

Duque Hurtado et al. (²⁰²⁰) state that a contemporary phenomenon studied in the scientific literature is the Born Global and entrepreneurship, especially due to the ease with which current business units access foreign markets and develop internationalization processes in early stages of organizational constitution. All this presents, therefore, a contrast with classic models of gradual and steady expansion towards foreign segments, given that modern small and medium-sized companies accelerate their foreign opening dynamics, driven by catalyzing factors such as knowledge networks, industrial networks, commercial diversification, free trade, foreign investment and technological advances that bring markets closer together.

For this reason, companies currently use various strategies to position themselves in the market to which they belong, with the objective of obtaining maximum performance in their operations, while achieving maximum customer satisfaction and the quality of the goods they sell.

It is evident that many companies are afraid of exporting because they consider it to be a complicated issue and are satisfied only with the demand that exists in local markets for their products. Among the main issues that affect the development of this strategy is export awareness, since there are companies with potential and resources to enter the international market and are left out because they do not see the opportunity to expand or grow (^{Barrios Cruz & Torres Paez, 2019}).

On the basis of these arguments, it can be expected that technology-based companies can benefit more from their early internationalization, given that their activities are deeply based on the development of R&D&I investments. The positive relationship between business internationalization and performance increases as firms become more R&D intensive (^{García Cabrera & García Soto, 2020}).

The decision taken by companies to internationalize may be the result of various factors such as the need to overcome the maturity of the domestic market, the possibility of taking advantage of the growth of foreign demand, the reduction of freight or labor costs, the expansion of the company by obtaining an international character or many other factors that influence companies.

In Cuba, in particular, foreign trade management has not been free of difficulties. In this regard, it has been stated that: Foreign trade activity has presented problems with export and import plans. Sometimes, due to various objectives such as the behavior of international market prices for some exportable items, the inefficient internal transportation logistics that affects the entire chain and the financial restrictions they face.

But there are also other subjective problems whose solution is in their hands, such as the existing deficiencies in the management of collections, the poor use of available external credits, the inadequacies in the process of international sales and purchases and supply to the domestic economy, as well as the poor development of commercial intelligence structures that contribute to market research and the adequate management of supplier portfolios.

Territories must play a greater role in export management. Díaz-Canel Bermúdez (²⁰²⁰) refers that the municipal government is the local actor with the greatest capacity to organize and lead, for which the integral, stable, proactive and autonomous functioning of the municipality is decisive.

The advancement of the local economy requires solving problems from the provincial and national subordination of the business system that operates in the municipalities. This is limited by the capacity of local governments to make better use of territorial resources (^{Núñez Jover & Fernández González, 2021}).

The Ministry of Foreign Trade and Foreign Investment establishes that the fundamental purpose of the entities that carry out merchandise export activities is to diversify markets, guarantee the export of merchandise and the adequate positioning of products in target markets.

The objective of this paper is to detail the procedure for the management of exports of goods and services in the Electronic Components Company "Ernesto Che Guevara" (CCE in Spanish).

Materials and methods

For the development of the research, the dialectical-materialistic method was used, which is the guiding principle of this research; according to its contributions, it allowed to discover the dialectics of the development of the process to be studied, through an objective and concrete analysis of the potentialities and deficiencies that exist today in terms of the internationalization of the business system.

Empirical methods were used in the qualitative diagnosis of the situation to be investigated, that is, to obtain primary information on the current state of business internationalization management in the Cuban context. For this purpose, techniques such as documentary analysis, interview and survey were used, the results of which were processed to arrive at conclusions with the help of descriptive statistics.

Regarding the primary sources of information used to deepen the diagnosis of the problem posed, surveys were applied to a total of 10 members of the Board of Directors of the Electronic Components company, which represents 100% of the possible population to be surveyed.

Interviews were conducted with local decision-makers involved in the export process, in order to learn about the main advances and limitations that exist in the national context, in the management of business internationalization.

Results and discussion

Cuba's insertion in the world market is a priority at the present time for the country's development. The Bases of the Economic and Social Development Plan until 2030 establish as guiding principles the need to develop productive and service activities that take advantage of competitive and comparative advantages to achieve international insertion, as well as to expand and diversify foreign trade, mainly related to exports and international cooperation.

One of the strategic axis is productive transformation and international insertion; among its general objectives is to promote the country's dynamic, competitive and diversified participation in international markets. In the specific objectives of the aforementioned axis, it is established that the national industry must be strengthened in all its scales, oriented to the domestic market, based on competitiveness, sustainability and the promotion of its participation in international markets.

It is necessary to promote the development of exports based on competitive participation in international markets and the linkage of companies producing exportable goods and services with the input, capital goods and services industries. It is also aimed at strengthening international economic participation by taking advantage of the opportunities offered by regional and subregional spaces.

Achieving product positioning in the international market could yield important economic and social results, improve the competitiveness of local companies and generate greater income for companies and their workers.

The authors' idea of developing a procedure for export management as a strategy for the internationalization of the business system is based fundamentally on the above-mentioned situation. In addition, there are idiosyncratic factors that have a transversal impact on a country's exports regardless of the product or the destination market, including: physical infrastructure, the flexibility of the supplier to adapt to demand, the existence of idle capacities, the regulatory framework, the fabric of bilateral or multilateral agreements, among others (^{Quiñones Chang & Torres Pérez, 2015, p. 146}).

For the development of the procedure, it was worked with the Electronic Components Company "Ernesto Che Guevara", which is a company whose raw materials are imported, so that exports have a fundamental weight for the acquisition of foreign currency. A diagnosis was made to know the current state of exports of goods and services in the company.

After consulting the primary and secondary sources of information and processing the results, it is proceeded to the triangulation of the information, in order to determine the main causes that hinder the management of the internationalization of the Electronic Components company, which is carried out within the framework of the Board of Directors of the Company.

For this purpose, the Ishikawa diagram or cause-effect diagram technique was used, since it makes it possible to determine the causes that hinder export management. The problem located at the tip of the arrow signifies the effect (limitations in the internationalization management process of the Electronic Components company) and the "thorns" to be enunciated signify its probable causes which, in turn, may have other causes or secondary thorns.

Each of the participating group members was given a summary of the main results obtained from the diagnosis. Afterwards, they individually selected the possible causes. The following are highlighted as fundamental causes:

• Failure to take advantage of the company's productive and engineering capabilities

• Limited competitiveness of some of the exportable products

• Lack of knowledge on the part of company specialists and managers on how to develop export strategies for goods and services

• Scarce sources of foreign currency financing

• Deficient organizational management for export promotion and development

The most important causes were: "Scarce sources of external financing and lack of knowledge on the part of the company's specialists and managers of the ways to develop internationalization strategies" and the least important cause was: "Limited competitiveness of some of the exportable products and deficient organizational management to achieve the management of the company's internationalization".

The results of the preliminary research show the existence, among others, of the following problems in the field of export management in the "Ernesto Che Guevara" Electronic Components Enterprise of Pinar del Río:

• Lack of knowledge of the company's management of its export potentialities

• There is no adequate productive linkage between the different companies that should be integrated in the process of export promotion and diversification

• The economic, financial and commercial blockade that the United States maintains against Cuba, which limits access to external financing and inputs necessary to value goods and services with export potential

• Lack of knowledge of the functions performed by foreign trade support institutions

• The vast majority of companies do not have an export strategy for goods and services

• There is no organizational structure for the work and promotion of exports

• Lack of knowledge of the laws, law decrees, decrees and resolutions that regulate foreign trade activities

• Lack of raw materials and materials for the development of production with export potentialities

On the basis of the systematized theoretical foundations and the regularities of the empirical diagnosis, the general elements of the procedure that is oriented to the promotion of the management of the internationalization of the Electronic Components company are proposed.

The procedure shown is understood as the way to develop the process of territorial management of the internationalization of the business system, through the stages and steps that integrate it, by means of a set of established and technically based tools. Below is an explanation of the steps involved and a summary by activity, to be developed in each step, in order to facilitate its implementation by local actors.

To determine the premises that serve as the basis for the application of the procedure, a working session was held with the members of the Board of Directors, resulting in the following: 1) political will of the top management to apply the proposed procedure; 2) existence of potentialities in the company for the internationalization process; 3) recognition by the members of the Board of Directors of the importance and necessity of internationalization.

The presentation of the procedure in question begins with an explanation of its structural components:

1. I. General objective of the procedure

2. II. Object of the procedure

3. III. Responsible for the Implementation and Control of the Procedure

4. IV. Stages of the Procedure. Three stages are determined, with the following elements:

   • Specific objective. Each of the steps pursues a specific purpose that contributes to the general objective of the procedure.

   • Steps. They are designed at each stage and are conceived as general lines of action.

   • Techniques to be used.

In accordance with the structure provided above, the description of the procedure is presented.

General objective of the procedure: To develop the capacity for internationalization of the business system and mobilization of business opportunities with foreign investment, from the initiative of the electronic components company "Ernesto Che Guevara" (CCE).

Object of the procedure: The management of CCE for their internationalization.

Responsible for the implementation and control of the procedure: The management of the internationalization of the business system must be based on CCE's development strategy, so the responsible for the implementation and control must be CCE's Board of Directors as the highest executive authority, supported by the Superior Organization of Business Management Gelect and the Project Group with the methodological advice of the Territorial Delegation of the Ministry of Foreign Trade and Foreign Investment.

Stage I: Preliminary preparation

Specific objective: To achieve the basic conditions for the implementation of the procedure and verify compliance with the established premises.

Step 1. Evaluation of the fulfillment of the premises

Description: Compliance with the premises proposed as an indispensable requirement will be assessed, so that the conditions for the application of the procedure are created. If any premise is not fulfilled, the pertinent actions must be taken to achieve it.

Techniques: Group work, group discussion.

Step 2. Awareness and training

Description: The awareness and training process has to be oriented, essentially, to the topics related to the management of the internationalization of the business system and specifically of CCE. The topics will be given according to the needs of the people selected. Awareness and training workshops will be conducted, planned according to the possibilities of participation of the personnel.

Techniques: Workshops, courses, seminars, conferences, among other forms of preparation and improvement.

Step 3. Creation of a mechanism for business management of internationalization

Description: In this step, a mechanism is designed with the objective of evaluating the relevance of the selection of products and services to be exported henceforth, projects, the articulation between the sources of financing and the articulation between the projects themselves, informing international counterparts and government institutions about the use of resources and the impacts generated, monitoring and evaluating the projects to be exported and their implementation plans, and making the country's strategic lines of development compatible with the priorities established in the CCE development strategy.

Techniques: Group work, brainstorming.

Stage II: Planning of the internationalization management of the business system

Specific objective: To design project opportunities for the internationalization of the business system and their financing strategies.

Step 4. Elaboration and approval of the company's internationalization strategy

Description: This strategy does not have a predetermined structure as it varies depending on the products, services and particular characteristics of each company, it is nothing more than an organized way of exposing: what they want to export, where they want to export to, how they are going to do it and what resources they have to do it.

It must have the following key points:

Business Description

It is important to provide detailed information about the company. In particular a description of its capacity, experience and skills to implement the project, define the strengths and weaknesses of the company. In addition, they should include the long- and short-term objectives, if there is a history of an export business plan, the target market insertion strategy and the description of the product or service.

The latter should cover everything from tariff classifications, description of consumption and market segments, main competing products, technologies, quality standards, product adaptations, costs and prices for the customer, to research and development of new products.

Market analysis

Every export plan should include where it is wanted to export to and the characteristics of that market. This includes political, legal, economic and socio-cultural aspects, it is important to include "a description of the industry in the market to be exported, analysis of the competition, market segmentation and tariff barriers".

Human Resources

To expose the human capital that the company has to face the internationalization project. Any information related to the experience and competitiveness in the different aspects of international trade, the organizational structure of the company and the international area is beneficial. In addition, it is important to detail if the company has external advisors in the area of international trade as well as strategic alliances.

Operations

This section defines a target market penetration strategy compatible with the company's long-term objectives. The feasibility of the operation from the administrative, technical, financial and commercial point of view must be stated.

Techniques: Surveys and interviews, SWOT matrix, brainstorming, database consultation.

Step 5. Elaboration of the annual sales policy based on the objectives and actions outlined in the strategy

Description: Sales policies are responsible for developing, coordinating and monitoring the various organizational decisions that have a direct influence on sales. To define a company's sales policy, managers must consider expectations in relation to the level of risk they are willing to assume in order to achieve greater profitability. They must also take into account the brand's value proposition and its target audience.

In this phase, after establishing the type of policy (risky or conservative) and knowing the business model, the following elements should be included:

1. Payment type. Determines the payment methods to be used by customers. Here it is established the type of currency and the policies for the use of credit and debit cards.

2. Product pricing. Defines the profit margin of one or more products offered by the brand.

3. Returns and exchanges. Determine the conditions for returns and exchange of merchandise. To do this, it is important to have a form where customers can know the return and exchange policies of the business.

Techniques: Matrix for the selection of strategic lines.

Stage III: Organization of the internationalization management of the business system

Specific objective: Define the mechanisms for managing the internationalization of CCE.

Step 6. Definition of the type of internationalization to be carried out

Description: This is a very important step in that it defines the strategic lines that guide the actions to be developed, based on CCE's priorities. The actions respond to the strategic lines proposed as part of the strategic design. This makes it possible to guide where internationalization should be directed in terms of articulating it with CCE's development priorities.

In this step, the CCE board of directors must define, based on its potential and the work developed in the other preceding steps, which types of internationalization are likely to be developed. The two possible types of internationalization are:

• Commercial: It is through direct or indirect exports to the country.

• Technological: It is mainly based on licenses, whether franchises, patents, distribution contracts and distribution agreements.

Techniques: Brainstorming, weighted voting, group work.

Step 7. Design of selected projects

Description: The main projects to be carried out will be designed and the attributes that distinguish them, which must be adapted to be marketed in the foreign market, in addition to the identification and design of possible production and service linkages.

Techniques: Group work, brainstorming.

Step 8. Negotiation and approval process

Description: In this step the company will have to carry out a negotiation work in the search for offers that certify the availability of supplies to be acquired for the selected project, as well as the potential demand for them. The projects will be submitted for approval to the corresponding authorities.

Techniques: Group work, interview, negotiation techniques.

Stage IV. Implementation of the management of the internationalization of the business system

Specific objective: Implement the projects selected for the internationalization of CCE.

Step 9. Project financing strategy

Description: The sources and mechanisms of financing to be used for the execution of CCE's internationalization projects that have been approved by the corresponding authorities will be defined. Depending on the complexity, magnitude and scope of each project, the possibility of mobilizing different sources of financing for its implementation will be taken into account.

Step 10. Implementation of approved projects

Description: In this step, the realization of projects to achieve the internationalization of CCE begins. All the necessary resources will be mobilized, from economic, human, financial, material and technological resources by the parties involved. For this, it is necessary to guarantee a fluid communication with the clients that, in turn, allows to generate an environment of trust and security.

Productive and value chains will be promoted, with structures of the productive base and other suppliers and clients necessary for the efficient operation of the project.

Techniques: Logical framework matrix, annual operational programming, written and oral communication.

Stage V. Evaluation of the management for the internationalization of the business system

Specific objective: Evaluate CCE's internationalization management process through the impact generated by the internationalization projects in execution, adopting the corresponding measures for its continuous improvement.

Step 11. Evaluation

Description: The control process must be carried out before, during and after the execution process; it allows guaranteeing the legality of the actions that are developed in any of its phases, previously identified. The evaluation is of vital importance to know if the efficiency and effectiveness indicators that are analyzed in the business system are being complied with. For this purpose, evaluation and follow-up methods such as the Logical Framework Matrix will be used. Where possible, economic, ecological and social impact evaluation methods will also be used. This process will make it possible to know the progress in the execution of the business and the existing obstacles or weaknesses, which will facilitate the implementation of corrective measures to optimize the expected results.

Techniques: Self-diagnosis of decisions, project audits, impact measurement, interview, survey.

Step 12. Feedback process

Description: The feedback process allows introducing improvements that act in function of raising the level of effectiveness throughout the process. The projects are expected to generate impacts that promote the development of CCE and the territory. The magnitude of these impacts will be evaluated through the calculation of the indicators defined for each project and their comparison with the baseline, i.e., the starting point. This will allow for the improvement of current projects and the generation of new ones, as a result of the new beginning of the cycle.

The accumulation of positive impacts will be reflected as changes that strengthen the sustainability of development, since the positive interrelation of the projects and their results will result in greater efficiency in the company. In this step, techniques and tools will be used to achieve integration in the analysis of the entire process, making it possible to compare and cross-reference the indicators of each project with the general indicators.

Techniques: Interviews, surveys, baseline, comparative analysis of planned indicators and their actual behavior.

Transversal processes

Transversal processes are those that will influence all phases of the procedure. These are: research-action-participation, stakeholder articulation, and leadership and motivation.

Action-research-participation because it is a method of research and collective learning of reality, based on a critical analysis, with the active participation of the actors involved, aimed at stimulating transformative practice and social change.

Finally, leadership and motivation because the entire management process must be carried out with participative, horizontal management styles, where all those involved feel committed to the objectives to be achieved.

A procedure was developed for the management of exports of goods and services in the Electronic Components Company "Ernesto Che Guevara", which is structured in 5 stages and 12 steps and the techniques to be applied in each case were pointed out. The proposed procedure offers solutions to take advantage of the internationalization potentialities existing in the company, analyzed through the interrelation between phases and steps.

An important part of the components with which the company works are imported; therefore, the sustainability of its development depends to a large extent on the company's capacity to attract foreign currency resources from exports.

Referencias bibliográficas

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Received: November 24, 2023; Accepted: March 22, 2024

^*Autor para correspondencia: [e-mail]

Los autores declaran no tener conflictos de intereses.

Iván González Pita y Yaricel Barrios Cruz: concepción y diseño del estudio; recogida, análisis e interpretación de los datos y elaboración del borrador.

Carlos César Torres Paez: revisión crítica del artículo con aportes importantes a su contenido intelectual.

Todos los autores revisaron la redacción del manuscrito y aprueban la versión finalmente remitida.