Realities of the financial management
of the strawberry sector in the municipality of Sibaté, Cundinamarca
Realidades de la gestión financiera del sector fresero en el
municipio Sibaté, Cundinamarca
Campo Elías López-Rodríguez
PhD student in Consumer Psychology. Research Leader of the
Specialization in Financial Management at Corporación
Universitaria Minuto de
Dios - UNIMINUTO. Contact: email:clopezr3@uniminuto.edu.co Orcid: http://orcid.org/0000-0003-4061-2979
Miguel Alejandro Espinosa-Rodríguez
PhD student in Consumer Psychology. Research Leader of the
Specialization in Financial Management at Corporación
Universitaria Minuto de
Dios - UNIMINUTO. Contact: email:clopezr3@uniminuto.edu.co Orcid: http://orcid.org/0000-0003-4061-2979
Yuly Paola Beltrán-Cubillos
PhD student in Consumer Psychology. Research Leader of the
Specialization in Financial Management at Corporación
Universitaria Minuto de
Dios - UNIMINUTO. Contact: email:clopezr3@uniminuto.edu.co Orcid: http://orcid.org/0000-0003-4061-2979
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SUMMAR
The
objective of this article is to identify the realities of financial management
applied by the business units of the strawberry producing and marketing sector
in the municipality of Sibaté, Cundinamarca, taking into account the relevance
of regional development and the primary sector of the Colombian economy. At the
methodological level, from a descriptive scope and a quantitative approach, 282
surveys were applied to managers and legal representatives of formally
constituted companies with the aforementioned corporate purpose and geographic
location. Among the main results, it is evident that these businessmen have
important weaknesses in financial management and there are no elements within
their practices that, from the financial management point of view, give value
to their corporate purpose. It is concluded that the businessmen of the sector
studied should keep in mind that adequate financial practices strengthen the
business fabric that generates welfare for the whole society through regional
development.
Key words: Financial management,
regional development, strawberry marketing.
RESUMEN
El objetivo de este artículo
consiste en identificar las realidades de la gestión financiera que aplican las
unidades empresariales del sector productor y comercializador de fresa del
municipio de Sibaté, Cundinamarca, esto teniendo en
cuenta la pertinencia del desarrollo regional y del sector primario de la
economía colombiana. A nivel metodológico, desde un alcance descriptivo y un
enfoque cuantitativo, se aplicaron 282 encuestas a gerentes y representantes
legales de las empresas formalmente constituidas con el objeto social y
ubicación geográfica ya mencionada. Dentro de los principales resultados se
evidencia que estos empresarios poseen importantes debilidades en la gestión
financiera y no existen dentro de sus prácticas elementos que desde la gerencia
financiera otorguen valor a su objeto social. Se concluye que los empresarios
del sector estudiado deben tener presente que, las adecuadas prácticas
financieras fortalecen el tejido empresarial con el que se genera bienestar a
toda la sociedad mediante el desarrollo regional.
Palabras clave: Gestión financiera, desarrollo regional,
comercialización de fresa.
Introduction
The municipality of Sibaté
Cundinamarca has a total area of 125.6 km2, equivalent to approximately 12,560
hectares, and of these 1,100 are dedicated to agricultural production, which is
focused on the potato, pea and strawberry production system (Alcaldía de
Sibaté, 2018). Given that the production and commercialization of the latter
product is within the three main production systems and of greater economic
impact in the municipality, 83% of strawberry producers and marketers have
their productive units for rent and are characterized by having financial
behaviors and business practices in informality and without control of their
accounting; the remaining 17% of entrepreneurs are owners of the land where
this product is grown and their organizations are within the formality and
legal constitution (Evaluaciones Agropecuarias Municipales, 2019).
Most of the strawberry
producing and marketing companies in the municipality, especially the informal
units, have had insufficiencies for their structure and performance, they do
not consider a panorama of innovation, they cultivate and operate on daily
chores, they have a high focus on sales, neglecting the control of their income
and expenses, making their financial structure inadequate for administrative
operability. Orazi, Martinez & Vigier (2019) state that it is vital to have
an assertive administrative process in terms of financial activities, so that
business units can be properly managed and corrective and preventive actions
can be taken in time, in order to ensure business success.
It is relevant to highlight
and identify the levels of world strawberry production to understand the
economic context faced by producers and marketers of this activity in the
municipality. For 2015 worldwide 4.6 million tons were produced, with the
United States being the main producer with 1,524,172, followed by Mexico with
371,400, Turkey with 353,173, Spain with 289,900 and Egypt with 242,297,
Colombia is ranked 18th in the world ranking with 58,555 of production in tons
(UN, 2019). The above supports the continued importance of strengthening the
primary sector of the economy for countries such as Colombia (López-Rodríguez,
et al, 2020).
Strawberry production in the
country enjoys a good level of production, reflected in the rapid growth of
this activity in recent years. According to DANE figures (2020), strawberry
production reported a total of 57,172 tons. The department of Cundinamarca
recorded the highest participation, followed by Antioquia, Norte de Santander
Cauca and Boyacá.
In the department of
Cundinamarca, the strawberry market trend pattern was maintained in the last
three years, the territories dedicated to this crop in Colombia have had a
gradual development, so that in geographical terms, the crop is concentrated in
the savannah of Bogota and its peripheral municipalities, among which stand out
the municipalities of Sibaté with 15,960 tons, Facatativá with 6,822 tons,
Soacha with 5,757 tons and Chocante with 5,090 tons. In other regions, such as
Norte de Santander, the municipalities of Silos 1,225 tons, Pamplona 1,190 tons
and Cacota 560 tons stood out (DANE, 2020).
Taking into account the above,
this research process responds to the following problem: What are the realities
of financial management applied by the business units of the strawberry
producing and marketing sector in the municipality of Sibaté, Cundinamarca? To
this end, the actual application of financial practices within the management
of these organizations was determined, in order to understand the relationship
between financial management variables and their impact on the regional
development of the sector.
The application of financial
practices supported by the theories of the development of administrative
functions for investment decision making, indicate that such habits are
employed to carry out the investment selection process in companies operating
in Colombia (Vecino, Rojas & Muñoz, 2015). They must also be based on
creativity and the ability to generate projects and alternative ways of producing
and managing reality, when this day comes, it will be possible to speak of
development and the construction of autonomous ways of being and thinking
(Escobar-Sierra et al. 2021). Therefore, the interaction and strategic use of
monetary and non-monetary values in transactions, organizational habits and
cultural scopes involved in daily financial practices must be considered (Van
Raaij et al. 2020).
According to Ferrero (2014)
the link achieved by financial practices according to who develops them and
their purposes, estimate the risk and the measures taken to diminish the
information acquired for the interpretation of analytical resources; likewise,
it should be considered that the model based on the small business system is,
in any case, a dynamic model, that is, the survival conditions of the system
are changing over time (Fragoso, 2015). In this sense, the perspective of
observation of Colombian companies from the development of the regional economy
and the effect on the present on the social and economic process (Alvarez et
al. 2018).
For Van Raaij et al. (2020) the practices of social responsibility in
terms of social and cultural dimensions in the financial practices of
low-income settlers or rural sectors evidence the crisis in terms of regional
development, that is, that the purpose of the process of classification of
investment projects and the discernment of organizations that know evaluation
criteria where to invest is crucial for the positive outcome of the financial
objectives (Rodriguez, 2014). Likewise, ideas and skills can be originated that
reform the principle of creativity and breadth to spread projects and variables
of producing and managing reality (Rangel, 2012).
Quiñonez & Canal (2018)
emphasize that cases of small companies were found, where their managers
possessed higher studies and therefore used a defined method to size investment
projects and, additionally, identify companies in which their managers, despite
having a high level of studies, did not implement any technique. Therefore, local
and family economic effects cannot be obviated from the economic and financial
changes generated in the national and international environment, to discern the
financial practices of over-indebted households (Romero-Muñoz et al. 2021); so
Nizam et al. (2019) infer that companies should adopt methods to evaluate and
rank investment options that are viable, such as time value procedures, Net
Present Value (NPV), Internal Rate of Return (IRR) and Required Rate of Return.
In view of this, accounting
can be perceived as a process of formation of dominant values in the
environment; therefore, accounting can be studied on the basis of its authority
as a way of thinking, which promotes the legitimization of organizations
(Boisjoly et al. 2020). Secondly, the tendency to provide a solution to the
clarification of economy, efficiency and effectiveness in the management
environment in conjunction with management indicators (López-Rodríguez et al.
2022). Thirdly, Angulo Sánchez (2016) indicates that it is essential to take
into account the ways in which companies and especially individuals solve a
debt conjuncture by linking material and symbolic resources by their class,
gender and ethnic condition.
The role of the company shows
meanings and representations of accounting and its sources of resources for
financing, from the context established in the use of accounting as a tool of
organizational legitimacy with the environment (De la Hoz Granadillo et al.
2014), although there is no way for the market-driven economy to function
favorably with a legal system that does not guarantee the execution of
contracts with internationally competitive costs (Briozzo et al. 2016);
therefore, the formal financing system comprises a diversity of instruments and
sources of financing for the national, regional and municipal levels, in the
public as well as private sector (Nava Rosillón, 2009).
Martínez Velázquez &
Dutrénit Bielous (2019) state that the approach of entrepreneurship and
financing models through venture capital, determine the significant scope for
the market with great sympathy and success in the environment. On the other
hand, financing in an innovation environment that needs, internal and external
funds as a complement for upcoming innovations; which does not allow the financing
of markets to be given in the basic research phase (Rangel, 2012); hence, the
methods in which companies and families use their economies and their debts
should be considered especially , savings, since consumption needs and access
to money along with social ties should have reciprocal moral obligations
(Ferrero, 2014).
According to Aguilar, Torres
& Salazar (2017) the operational financial management, performs the
appropriate management of available cash, as it determines the credit terms to
be granted to customers that establish a stimulus and this benefits sales, to
specify the current financing that decreases costs and the use of inventories
(Engel et al. 2018), likewise the effective management of working capital
causes the liquidity required in the company to meet the solvency and
obligations with suppliers generating labor benefits preventing the company
from falling into technical insolvency (Swan, 1956) in such sense the working
capital is an elementary fraction of the short-term financing of a company, for
which it is recommended to manage captiously achieving to be relevant in the
use of resources (Meleán, Moreno & Rodríguez, 2009).
After the end of World War II,
the pretensions of a constant and hasty economic and regional development
became a concern for Latin American governments until the mid-1980s (Chemkha et
al. 2021). In the globalization of the territory and the region, it overflows
the national borders where it is implemented and it is achieved in a certain
way that there is concordance in the activities that comprise the economic,
financial, technological and cultural life of the regions (Olea-Miranda,
Contreras & Barcelo-Valenzuela, 2016), thus promoting regional development,
an activity that arouses great interest invites and gives the possibility of
some self-centered productive methods, established in the local productive and
social resources (Rello & Saavedra, 2013).
For Boisier (2004), regional
or territorial development is based on three processes: the regionalization of
countries, the decentralization of public-private conclusive systems and the
corresponding institutions in territorial areas, and the development of the
regions themselves, which is directly related to the size of companies and
their survival; hence, progress is the safest strategy to preserve the balance
in organizations that easily adapt to the environment (Hernández, 2009).
According to the Law of Proportional Effect (Lep), the mismatch between growth
and business size allows perceiving the prototype of organizations that develop
in occupation of their size, assuming measures that can be deployed activating
the economy with the generation of jobs (Quirós, M., Quirós, J. &
Izquierdo, 2017).
Hernandez (2009) considers
that the small and medium enterprise contributes to the economic development of
a region or territory by its generation of value and job creation, seeing the
effects it produces in the fields of activity, growth and regional development,
since, entrepreneurship is an economic and social invention; starting from, the
behavioral, where reference is made to the subject that assumes the commitment
for a business idea (Belaïd & Zrelli, 2019). The ability to obtain
democratically established collective objectives is based on the same
appreciation of the structure and dynamics of the procedures on which it will
be necessary to intervene in a new business idea (Boisier, 2004).
For Recalde, Guevara &
Jaen (2017) entrepreneurship favors not only those who venture to promote
business ideas, but also generates a collateral consequence on the rest of
society, in turn "Regional development involves a theoretical renewal on
development, and implies the resizing of capitalist accumulation, recognizing
the importance of local productive systems in the processes of growth and
structural change" (Manet, 2014, p. 22). Political and territorial
decentralization is now expressed in Colombia through the election of
departmental governors and mayors; as a result, departments and municipalities
now receive huge resources transferred by the nation (Boisier, 2004).
Rello & Saavedra (2013)
estimate that the new focus of regional development is competitiveness and is
the link between the economic advancement of countries and the participation of
international markets for the multiple effects of contemporary economic
development, where it is worth highlighting that "entrepreneurship as a
factor that affects economic development in the case of territories"
(Recalde, Guevara & Jaen, 2017, p. 3). In addition, with the passage of
time the population increased the extension of the regions; it was notorious
where market centers became clustering centers, then the theory of economic
geography emerged that explains the reason for such behaviors (Rodriguez et al.
2013).
Materials and methods
The scope of the research was descriptive with a
quantitative approach, in which the realities of the financial management
applied by the business units of the strawberry producing and marketing sector
in the municipality of Sibaté, Cundinamarca were characterized. The population
studied were the managers and legal representatives of legally constituted
companies dedicated to the production and marketing of strawberries in the
municipality of Sibaté Cundinamarca, and according to the Municipal Mayor's
Office there are 282 organizations with these characteristics (Evaluaciones
Agropecuarias Municipales, 2019).
As for obtaining the sample, probabilistic
sampling was used, since it allows distinguishing the probability that each
unit of analysis has, this must be integrated to the sample through random
selection, thus comprising the simple random sampling procedure (Posso, 2014).
From a confidence level of 95%, a margin of error of 5%, and according to the
coefficient of positive and negative variation of 50% each, the sample was 195.
According to Poveda, et al, (2020). In the research, social appropriation is
guaranteed, as a space for academic reflection.
The instrument for the collection of information
was a survey which, according to Arias-Gómez, et al, (2016) is a strategy of
methods that lead to comprehensive research processes, including the
formulation of the problem, the objectives, the selection of individuals and
entities together with the design and analysis of data. This instrument has
twelve items, the first three characterize the population studied, the
remaining nine characterize the financial management practices developed by
these organizations based on multiple choice questions. The survey instrument
was applied by telephone, e-mail and visits to the production units of those
who agreed to participate and who had previously received informed consent.
The information gathering instrument was
validated by two experts, one of them with a high level of knowledge in
financial management and the other an expert in statistical processes. The
SPSS® 25.0 (Statistical Package for the Social Sciences) statistical package
was used to analyze the results.
Results
The results obtained from the implementation of the methodological
proposal reflect the descriptive characterization of the companies that belong
to the strawberry producing and marketing sector in the municipality of Sibaté.
Figure 2 shows the classification of the sizes of the enterprises, where 76.9%
are microenterprises and 23.1% are small enterprises, concluding that the
difference is significant because of the alternative that microenterprises
generate to improve the living conditions of the sector, obtaining additional
income in the regional development of the municipality; likewise, they are the
main source of employability for the female population of the municipality of
Sibaté, Cundinamarca.
The time in the market of the companies in the strawberry production and
commercialization sector in the municipality of Sibaté, Cundinamarca, where
10.8%, 13.8% and 30.3%, respectively, of the production units are women. 3%
respectively of the productive units are pioneers in the market, showing a
transcendence in time of more than 6 and up to 15 years, evidencing the
adequate management of the factors of production and commercialization, which
shows that the growth in the market and the life cycle of the product are some
of the variables by which the legal representatives decide to invest in this
sector, since the particularities and characteristics of the environment
contribute to the process of regional development of the municipality.
The purposes for which the legal representatives of the companies
consider that there should be a person or area in charge of financial
activities. 52.8% state that the purpose of these financial activities is to
comply with the company's legal, accounting and tax regulations, but the lack
of knowledge of the subject and the fear that their economic and financial
information will be known to third parties keeps them away from this
alternative; on the other hand, 30.8% are inclined towards investment
decisions, work administration and financing, allowing this percentage to drive
the different stages of the operation; and 16. This shows that for these
entrepreneurs, financial activities in their microenterprises are a relevant
control and management tool for the projection of the business with a view to
its growth.
That 46.6% of the entrepreneurs use legitimate methods, even to the
point of not having accounting, which clearly does not allow them to make
long-term decisions. However, 34.4% use balance sheets in their accounting and
18.9% manage to obtain the income statement or statement of financial position,
which indicates that their legal representatives contemplate keeping accounting
and financial activity properly managed, which allows them to report the costs
incurred, the deductions derived from the operation and the income obtained
from it.
It is also important to say that the cash flow statement is one of the
most complex financial statements to prepare in a company because it is
necessary to have a deep knowledge of the organization to be able to develop
it, so none of the productive units in the sector have used it and although it
is a basic financial statement that shows the cash generated and used in
operating, investment and financing activities, they do not do it, the sources
of financing used by the legal representatives of the companies in the
strawberry producing and marketing sector in the municipality of Sibaté,
Cundinamarca. As the first source we find the financing of the resources
generated by the company with 46.2%, likewise 35.9% manage resources
contributed by the partners, since it is the first source of constitution of
the productive unit; while 17. 9% are leveraged by third parties, such as
government funds that help them generate business models and project
development, this because they help create prototypes to market the product or
service in the market, the managers of these organizations also rely on seed
capital to start the project, and finally go to financing with banks both first
and second floor in order to have flow in daily operation, since the time it
takes a strawberry crop per hectare invested is two years with a value of $ 60.
000,000 million pesos per hectare planted, where the first six months the total
investment must be obtained, so from month seven onwards profits will begin to
be obtained; otherwise there is a high possibility that the break-even point
will not be achieved and losses will be incurred, which makes different sources
of financing to be used, the existence of working capital management policies
of the companies in the strawberry producing and marketing sector in the
municipality of Sibaté, where 64.6% say they do not have such policies and
35.4% indicate that they exist but do not apply them, which means that they are
neglecting the production or service process, in turn generating increases in
operating risk costs, affecting the profitability of the productive units, the
investment activities of the companies in the strawberry production and
commercialization sector in the municipality of Sibaté, Cundinamarca. It can be
seen that 70.8% of the legal representatives and/or managers do not contemplate
investment activities because they are not clear about the concept; it is
necessary to highlight that the results of graph 7 show that 100% of the
companies in this sector lack a person or a team to develop the financial
function, since there is no one to make decisions with criteria to reduce the
risk. In the same context, 29.2% foresee future profits, even though investing
generates some uncertainty when it comes to increasing capital and business
activity.
That 66.7% do not contemplate the existence of cost systems in the
companies of the strawberry producing and marketing sector in the municipality
of Sibaté, Cund, which is equivalent to the lack of aspirations at a
competitive level in terms of processes to adapt and orient their products with
total customer satisfaction, it can also be seen how they become confused or
unaware of the production processes and their requirements, likewise 33.3%
indicate that they exist but are not applied, so the phenomenon for one or the
other case is the same.
That 100% of the legal representatives and/or managers of the companies
in the strawberry producing and marketing sector in the municipality of Sibaté,
Cundinamarca, do not use financial indicators as part of their daily
operations, which means that they are unable to analyze their liquidity,
solvency, profitability and operational efficiency. The harmful effects with
which they are confronted day by day lead to the lack of detailed knowledge of
the economic, financial and accounting behaviors of the organizations, this due
to the gigantic fears or false beliefs that the guild has for not knowing how
their company is, they prefer to start over and over again under the motto
"not to suffer in case of losses".
Finally, that 76.9% of the companies in the strawberry production and
marketing sector in the municipality of Sibaté, Cund, do not have policies for
managing the company's portfolio, arguing that they manage everything in cash
and in cash, only 23.1% are concerned about the portfolio variable, which is
one of the most important for managing working capital.
Conclusions
Within the literature reviewed, several authors
were found that highlight financial practices as a transcendental pillar of the
development of organizations with respect to their competitiveness (Vecino,
2015; Van Raaij et al. 2020; Ferrero, 2014), since their studies have focused
on the relevance of evaluating investment projects in companies operating in
Colombia, analyzing the social and cultural dimensions in the urban and rural
sector. In relation to regional development other studies are based on the
holistic process in which different factors of a given region gain importance,
as well as the business structure, without affecting the economic investment
capacity, whose objective is to favor growth and development in the territories
(Orozco & Rodríguez, 2017; Quirós M, Quirós. J, & Izquierdo, 2017).
Likewise in the sources of financing and working
capital management, various researches emphasize that the strategy to achieve
the operability of the companies and their permanence in time is based on
executing with normality their operational activities in coordination and
synergy between government institutions and the private sector (Briozzo et al.
2016; Rangel, 2012; Aguilar, Torres, & Salazar, 2017), so that the impact
of scarce resources to finance smaller economic entities, achieve an
operational financial management capable of managing the available cash that
contributes to adequate financing that minimizes costs and inventory management
to increase the profitability of the organization.
The methodological strategy used in this
research was appropriate, since the proposed objectives were fully executed:
the companies of the sector were analyzed, determining the real application of
financial practices within the management of the strawberry producing and
marketing companies of the municipality of Sibaté, Cundinamarca, initially by
means of a documentary review the main concepts of financial practices were
related, studying the relevance it has in the regional economy, through the
characterization of the financial management variables; On the other hand, a
descriptive analysis was developed to identify these practices applied by the
companies studied, finding important weaknesses in their management, realities
related to cultural and idiosyncratic elements, as well as to the lack of
financial resources and limited possibilities of competitive growth.
Therefore, the representatives of the companies
in the sector studied should bear in mind that adequate financial practices
strengthen the business fabric, which generates well-being for society as a
whole through regional development. This provision is the essential principle for
the economic activity analyzed, without always having as a priority the returns
for the invested capital, or the control of the activity and of the productive
resources, since the synergy with society and the compliance with the rules and
laws as a fundamental axis for the businessmen can guarantee the patrimonial
balance.
In general, from this study the characteristics
of the main variables of financial management applied by the business units of
the strawberry producing and marketing sector of the municipality of Sibaté,
Cundinamarca are recognized; in view of this, and from the findings obtained,
future lines of research are visualized, among which stand out productive
chains, development of municipal, departmental and national policies for the
regional development of the sector, social structure in the rural area of the
intermediate municipalities, being guidelines that contribute with benefits to
both the academy and the productive sector.
Finally, it is important to recommend that this
line of research should work from the variables that characterize the financial
practices that lead to the regional development of any territory, providing
specific results of the deficiencies and fears that entrepreneurs have when
obtaining financial results in certain periods of time, finding opportunities
for improvement in the daily operation of crops that increase the possibilities
of control and investment.
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