Doing Business

by | Oct 10, 2016 | Business | 0 comments

A few thoughts about Global Business Indexes, Abraham Maslow and Tableau Analytics

More than seventy years ago Abraham Maslow proposed his “Hierarchy of needs theory”. He suggests that humans will not desire the secondary and higher level needs if basic level of needs are not met yet. You will most probably not even think about “Self-actualization” when you are hungry.

  1. Physiological needs – your body will not function properly – you need to eat
  2. Safety needs – personal, financial or health – secured job due to economic crisis
  3. Love and belonging needs-sense of belonging and acceptance among social groups
  4. Esteem needs – humans have a need to feel respected
  5. Self-actualization needs – realization of our potential

One of the most important resources of the organization are people. Their needs fulfillment has a huge impact on the functioning of their organizations and economy. Many times I have seen very talented people leaving the organization because one of the element from Maslow Pyramid was missing. Well the problem is that even if you will try to help somebody meet their High Level needs it will not work if they didn’t meet Safety needs. Increasing someone’s salary will not work long term if he doesn’t know what is going to happen in few weeks.

Today many governments invoking the global rankings evidence of how good they are in approach to the business and they’re trying to encourage investors to choose their country. But can the rank be a good source of information? There’s a lot of rankings, which we can use before making business decisions but you need to be very careful. Doing Business is one of the famous ranks. I have started investigating what exactly it includes when polish government presented 24th position for 2017 saying it’s fantastic score. At this same time the number of polish entrepreneurs thinking about moving their business outside of Poland rise like never before. One of the most interesting countries is Czech Republic. So the question is why? I will try to find the answer in the Global Ranks as we already have Doing Business Data for 2017. To see even more context, I have decided to use few more ranks which describes each country from different perspective

So for my exercise I will select

4 countries

  1. Poland – as a country which screams a lot about their 24th position WW in Doing Business 2017
  2. Czech Republic – as a target of many polish companies to move their business
  3. New Zealand –  best Country in the Doing Business Ranking 2017
  4. Denmark – best Europe Country in Doing Business 2017

11 Doing Business Ranks 2017

Doing Business project provides objective measures of business regulations and their enforcement across 190 economies at the subnational and regional level (read more). To get very good score in Easy of Doing Business, each country needs to get good scores in 11 areas of business regulation. Doing Business Rank = Rank of Weighted Average for 11 areas score. (read more).

  1. Starting a business – Procedures, time, cost and paid-in minimum capital to start a limited liability company
  2. Dealing with construction permits – Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system
  3. Getting electricity – Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs
  4. Registering property – Procedures, time and cost to transfer a property and the quality of the land administration system
  5. Getting credit – Movable collateral laws and credit information systems
  6. Protecting minority investors – Minority shareholders’ rights in related-party transactions and in corporate governance
  7. Paying taxes – Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes
  8. Trading across borders – Time and cost to export the product of comparative advantage and import auto parts
  9. Enforcing contracts – Time and cost to resolve a commercial dispute and the quality of judicial processes
  10. Resolving insolvency – Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency
  11. Labor market regulation – Flexibility in employment regulation and aspects of job quality

4 Additional Ranks

  1. The Global Peace Index (GPI) – The index gauges’ global peace using three broad themes: the level of safety and security in society, the extent of domestic and international conflict, and the degree of militarization (read more).

http://economicsandpeace.org

  1. The Global Terrorism Index (GTI)The index combines a number of factors associated with terrorist attacks to build an explicit picture of the impact of terrorism over a 10-year period, illustrating trends, and providing a data series for analysis by researchers and policymakers. (read more).

http://economicsandpeace.org

  1. The Human Development Index (HDI) – The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions. (read more).

http://hdr.undp.org/en/content/human-development-index-hdi

  1. The World Happiness Report– In the reports, leading experts in several fields–economics, psychology, survey analysis, national statistics, and more–describe how measurements of well-being can be used effectively to assess the progress of nations. Each report is organized by chapters that delve deeper into issues relating to happiness, including mental illness, the objective benefits of happiness, the importance of ethics, policy implications, and links with the OECD’s approach to measuring subjective well-being and the Human Development Report. (read more).

https://web.archive.org/web/20160317163051/http://worldhappiness.report

1 AstraFox Doing Business Tool (open)

https://public.tableau.com/views/AstrafoxDoingBusinessTool/AstrafoxDoingBusinessTool?:embed=y&:display_count=yes

Our Tool will show you current situation on maps and Tables. Analysis includes most of the countries WW.

Top 10 View will show you best and worst Countries by different Rank described above. You will be also able to select Sales Levels 3 (Africa, Europe, etc.). By selecting Country name, you will run actions which will display additional information.

   

Business Map allows to see full picture of the situation. 

Country comparison The last part is very helpful to compare few countries. Let’s have a look how Countries from our example perform.

New Zealand is 1st, Poland is ranked 24th and Czech Republic 27th. Best European Country Denmark is 3rd WW.

Based on Easy of Doing Business Rank we can say that Poland is better than Czech Republic. But remember that the Score in this Rank is a Weighted Average of other Ranks. And then this Score is also Ranked.  What those it means? It means that if we have very good Score in one of the categories the General Score is higher. Take a look on Trading across borders (Time and cost to export the product of comparative advantage and import auto parts). All the EU countries have No 1 in Rank but New Zealand not and I can understand that, their geography is not helping here. Poland have also Firs Place in No Terrorism.

The worst score Poland gets for Starting a business Ranked 107, Czech Republic worst score is for Construction Permits 130.

Unfortunately, Poland is also less happy country from the 4 selected, Current political situation is not really helping in safety needs fulfillment. The conclusion here is that based on Rank Poland is a good Country to Invest but because one of the basics needs (safety) is in danger investors are thinking about different possibilities. People in Czech are happier than polish they invest more in Human Development. When it comes to Paying Taxes context is very important, Poland is ranked as 47th and Czech Republic 53 but rank dose not includes the whole discussion about changes in Polish Tax Law. So ranks are good to see things high level but always use context to make good decisions.