CSPCAR5 MODULE 1 by Ceddet

STRATEGIC CUSTOMS PLANNING AND MANAGEMENT

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MISSION AND VISION IN CUSTOMS AUTHORITIES

COURSE AUTHOR Interamerican Development Bank (IDB) (www.iadb.org), through its Integration and Trade Sector (INT). COURSE COORDINATOR Interamerican Development Bank (IDB) (www.iadb.org), through its Integration and Trade Sector (INT), the Institute for the Integration of Latin America and the Caribbean (INTAL) (www.iadb.org/es/intal), the Inter-American Institute for Economic and Social Development (INDES) (www.indes.org), the World Customs Organization (WCO) (www.wcoomd.org) and the General Secretariat of Central American Integration (SG-SICA) (http://www.sica.int/). MODULE AUTHOR Alberto García Valera, Special Delegate from the Tax Agency of Andalusia, Ceuta and Melilla. EDUCATIONAL COORDINATION AND EDITING The Inter-American Institute for Economic and Social Development (INDES) (www. indes.org), in collaboration with the Economic and Technological Development Distance Learning Center Foundation (CEDDET) (www.ceddet.org) and Caribbean Customs Law Enforcement Council (CCLEC) (www.cclec.net).

Copyright ©2016 Inter-American Development Bank. This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO 3.0 BY-NC-ND) (http://creativecommons. org/licenses/by-nc-nd/3.0/igo/legalcode). This document is the intellectual property of the Inter-American Development Bank (IDB). Any partial or total reproduction of this document should be reported to: BIDINDES@iadb.org Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB’s name for any purpose other than for attribution, and the use of IDB’s logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that the link provided above includes additional terms and conditions of the license. The opinions expressed in this publication necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. These materials have been revised in light of the ministerial decisions taken in the framework of the 9th World Trade Organization Ministerial Conference held in Bali, Indonesia, in December 2013. The adjustments were made in order to reflect a higher alignment between the course topics and the priorities identified in Bali’s Ministerial Declaration and decisions, where all IDB members participated. Bali Ministerial Declaration and Decisions

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Table of contents List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Module Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 General Module Aims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Questions to Guide Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 UNIT I: CUSTOMS MODERNIZATION STRATEGIES FROM THE PERSPECTIVE OF THE WCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Learning objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 I.1. Unit introduction. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 I.2. Government strategies and policies in the context of the twenty-first-century customs authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 I.3. Strategic demands required of customs authorities . . . . . . . . . . . . . . . . . . . . . . 10 I.4. Capacity building for organized border management . . . . . . . . . . . . . . . . . . . . . 11 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 UNIT II. CONCEPT AND CHARACTERISTICS OF THE TERMS “MISSION” AND “VISION” USED BY THE ORGANIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Learning objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 II.1. Unit introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 II.2. Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 II.3. Vision. Characteristics of vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 II.4. Differences between mission and vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 II.5. Strategy map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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UNIT III. STRATEGIC CUSTOMS MANAGEMENT: “MISSION” AND “VISION” OF CUSTOMS ORGANIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Learning objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 III.1. Unit introduction. Mission, vision and strategy in customs . . . . . . . . . . . . . . 30 III.2. Customs organizational structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 III.3. Strategic information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 III.4. Strategic management for an organization’s growth. Implementation. . . . 36 III.5. Visualizing the organization as a strategic element . . . . . . . . . . . . . . . . . . . . . 38 III.6. Organizational values and culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 UNIT IV. ESTABLISHING STRATEGIC OBJECTIVES IN LATIN AMERICAN CUSTOMS ORGANIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Learning objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

IV.1. Unit introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 IV.2. The practical example of the Chile National Customs Service . . . . . . . . . . . . 44 IV.2.1. Mission of the Chile National Customs Service . . . . . . . . . . . . . . . . . . . . . 45 IV.2.2. The Customs Service’s vision of the future . . . . . . . . . . . . . . . . . . . . . . . . 46 IV.2.3. Strategic objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 IV.2.4. Strategy map and setting perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 IV.3. Mission and vision of other Latin American customs authorities. . . . . . . . . . 47 IV.3.1. Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 IV.3.2. Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 IV.3.3. Honduras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 IV.3.4. Nicaragua . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 IV.3.5. El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

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List of Figures Figure 1 of I.1. The Evolved Role of Customs. Figure 1 of I.2. Decision-making aspects of the organizational structure. Figure 2 of I.2. Policy Formulation and the Importance of Stakeholder Engagement. Figure 1 of I.4. What and how much to do. Measuring planning: management and objectives plans. Figure 2 of I.4. Higher earnings, the direct effect of efficient management. Figure 1 of II.2 Example Mission Statements. Figure 1 of II.3 Example Vision Statement. Figure 1 of II.5. Translating Vision and Strategy: Four Perspectives Figure 2 of II.5. Strategy map of a private company. Figure 3 of II.5. Strategy map of a publicly-owned company. Figure 4 of II.5. Balanced Scorecard Stakeholder Perspective. Figure 5 of II.5. Examples of Key Strategic Result Areas for Customs Administrations. Figure 6 of II.5. Balanced Scorecard Law Enforcement Perspective. Figure 1 of III.4. Graphical representation of an organization’s strategic management. Figure 2 of III.4. The Six Tasks of Strategic Management Figure 1 of III.5. The interaction between Mission-Vision-Values-Strategy.

Glossary Mission: A statement that defines the fundamental purpose of the company or organization, which should include the type of customers it serves, what needs it meets, what types of products it offers and, in general, the scope of the organization’s business activities. Vision: This is the projection of or reflection on the future which the company or organization makes today - a statement of the organization’s long-term goals and what it intends to become. Strategy map: The graphic and simplified representation of an organization’s strategy that serves to define the organization and where it intends to go. It is the link that connects the organization’s fundamental strategy (vision, mission and objectives) with results. Strategic management: Process of creating a management strategy based on a mission and a vision, in line with the course chosen by the organization and developed through a strategy map.

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Module Introduction The World Customs Organization (WCO) and the Inter-American Development Bank (IDB) have conducted over 130 diagnoses of customs authorities. Diagnostic findings have demonstrated the need to strengthen managerial capabilities in order to improve the efficiency and effectiveness of Central American and Caribbean Customs Authorities. To meet the challenges posed by economic globalization, trade facilitation initiatives and concerns for safety, the role of customs in the twenty-first century requires a renewed professional approach to management, technical directives and leadership, as well as knowledge and advancement of the organizationâ&#x20AC;&#x2122;s mission, vision and strategic planning aims.

Traditionally, customs authorities almost exclusively evaluated their performance based on a single indicator: the level of revenue collection. While this role is one of the core activities of any customs authority, the proliferation of regional trade agreements, new technologies, improved transportation and international logistics, as well as greater demands regarding security, control and facilitation have substantially expanded the role of customs. Other equally important roles, such as protecting and facilitating legitimate trade, have been added to improve the competitiveness of countries. Therefore, it is necessary to train customs employees to develop a multidimensional strategic plan that covers all the services that todayâ&#x20AC;&#x2122;s society demands from customs authorities.

General Module Aims Familiarize participants with the necessary tools to design, implement and track corporate strategies; identify the mission and vision in organizations and their importance in setting strategic goals and; transfer this knowledge to the managers and employees of Latin America and Caribbean customs authorities.

Questions to Guide Learning What is the mission of a customs organization? How should the organization define its vision? What are the ways that both mission and vision can be fulfilled? Is it enough for a manager to read this document or a book about strategic planning to automatically know how to define an organizationâ&#x20AC;&#x2122;s strategy? Where should customs authorities seek out information on how to design a strategic plan? How should a customs authority define its strategy map?

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UNIT I

CUSTOMS MODERNIZATION STRATEGIES FROM THE PERSPECTIVE OF THE WCO

Learning Objective To discover the global environment in which the World Customs Organization and its Memberâ&#x20AC;&#x2122;s customs authorities operate in order to facilitate their decision-making.

I.1. Unit introduction. Background Within the global context of foreign trade in 2014 the WCO has turned its Columbus Program into a high-level leadership policy, taking advantage of the strategic boost from: innovative tools (such as the Revised Kyoto Convention, the WCO Safe Framework of Standards to Secure and Facilitate Global Trade (Safe Framework) and the WTOâ&#x20AC;&#x2122;s Bali Declaration); administrative reorganization of the WCO itself (with the creation of the Department of Capacity Building); a number of financial benefits (financial donations by Members earmarked for capacity building); and the exploitation of resources (donor coordination and staffing) to become the main driver behind customs capacity building. Phase II of the Columbus Program devotes several chapters to strategic management and planning, strategic mission and vision, and performance management; all concepts we discuss in this and subsequent modules of the course.

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The political, social and economic challenges that customs authorities face worldwide make strategic management an essential element for building a modern organization in accordance with its purpose. To find out more see the World Customs Organization documents at www.wcoomd.org Custom authorities have played an important fiscal role for years as the agency responsible for the collection of import and export duties. While this is still its main role in many countries, the responsibilities related to border management in all customs authorities are rapidly increasing. The globalization of international trade and the relative ease of international travel are changing the traditional relationship between traders, the public and the authorities responsible for border management. Furthermore, there is growing pressure for governments to adhere to the regional and international regulations in effect concerning the movement of persons and goods. More specifically, customs authorities seek to meet the standards that the United Nations, WTO, WCO, as well as developing and developed countries require in terms of security and facilitation.

Technological progress has downplayed the importance of border crossing points. It has thus become necessary for customs authorities to develop the capacity to implement rules for monitoring people and goods at all points of the international supply chain and on all routes of travel. All points of the supply chain are affected with regard to goods, from loading at the place of production to delivery at the distribution point, and, in terms of people, from the point of departure to the point of arrival Not surprisingly, customs authorities today are expected to fully endorse government policy, especially in traditional areas, from revenue collection, economic development and security to those related to the protection of society, the environment, national heritage, and data collection. Figure 1 below illustrates the evolved role of customs.

Revenue Collection of Import Taxes (duties & excise) (domestic industry)

Protection of Society <health, safety>

(drug trafficking, firearms, environment, etc.)

Economic Development <trade, investment> (trade facilitation)

Security <terrorism>

(shifting focus to the entire supply chain)

Trade Statistics

Figure 1 of I.1: The Evolved Role of Customs

Customs functions

Protection of Economic Interests

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National customs services are required to play a central role through the development of operational policy and suitable regulations and the implementation of customized controls to ensure the implementation of government strategies and policies. Customs must also develop a service-based approach in regard to monitoring the movement of goods and people, one that rewards compliance and identifies and punishes offenders.

I.2. Government strategies and policies in the context of the twenty-first-century customs authorities At the strategic level, government policies generally require the promotion of economic growth and the funding of social development, attracting investments to create wealth by correctly applying taxes and ensuring a safe and healthy environment. Policies need to be developed in many areas of government (such as finance, trade, agriculture, immigration, foreign affairs, tourism, environment and health care) to turn these strategic requirements into actions. The development of these policies in such a wide range of fields requires the adoption of consistent strategic management and suitable legislation, regulation and controls. Developing government policies is a complex task and involves a strategic risk, namely, the possible rise of various operational needs which are sometimes contradictory. It is therefore important that managers ensure that national customs services are involved in the development stage of these policies and strategies. Managers also need to monitor results in order to ensure that government requirements are efficiently and effectively met. To achieve economic efficiency, the historian Alfred Chandler in his seminal work in 1977 researching strategic decision making, argued that structure follows strategy. Organisations must decide on the optimal structure needed for attaining strategic objectives. That is to say, all aspects of the organisationâ&#x20AC;&#x2122;s structure, from the formation of divisions and units, to the designation of reporting relationships, should be made keeping in mind the organisationâ&#x20AC;&#x2122;s strategic priorities or strategic intent. Figure 1 of I.2 below illustrates. Trade management Revenue collection Social protection / security Statistical Information

Government priorities

Organizational structure

Author: Alberto GÂŞ Valera

Figure 1 of I.2. Decision-making aspects of the organizational structure In the policy making process customs authorities may also ensure the introduction of international customs standards, such as the facilitation program proposed by the WTO, the WCO Revised Kyoto Convention and the SAFE Framework. The participation of customs in adopting proposals and negotiating positions in regional and international forums such as the WTO and the United Nations is also required.

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The involvement of customs authorities in the policymaking process mandates, therefore, that the organization understands the chosen policies and influences them, thereby placing customs in the best position to implement these policies. Note that Customs Authorities do not have the option of operating independently of other official agencies, traders and service users. In regard to other agencies, customs authorities must ensure that the implementation of policies and reform in a given area are not cancelled out by a contrary policy and lack of reforms in other areas. Figure 2 of I.2 illustrates.

10 Figure 2 of I.2. Policy Formulation and the Importance of Stakeholder Engagement Consultation must be carried out with internal stakeholders, other government agencies which may be directly or indirectly impacted by such policies, as well as with other key external stakeholders.

I.3. Strategic demands required of customs authorities Today there are a number of common requirements, important from a strategic point of view, which Customs authorities must meet: 1. Transparency: companies and the public demand clearly published rules and procedures which are comprehensively implemented within a common framework. This means receiving support from a complete information service to communicate the necessary clarifications to users before travel, but also from a resource system that would help to fairly resolve differences and misunderstandings. Legal certainty is essential for both the economic operator who participates in the logistics chain and the investor who decides to devote financial resources in the same country or fiscal environment as the customs authority.

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2. Minimal involvement: customs can be reasonably expected to have a basic involvement in legitimate trade and passenger transit. This is achieved by simplifying rules and procedures, the use of advance information, the speed of dispatch and ease of payment and recovery of amounts paid.

This responds to the traditional balance that all customs authorities should seek between trade facilitation and the fiscal and parafiscal control of goods that cross the borders of an economic region.

3. Security: in addition to meeting the international need to protect society from terrorism and organized crime, customs must protect legitimate trade, the environment and national heritage and become a visible presence that inspires the publicâ&#x20AC;&#x2122;s confidence. 4. Cooperation: customs should be encouraged and supported in building effective internal and external relationships that enable other public administrations, businesses and the public to influence their operations. In addition, they should be sensitive to the legitimate demands from economic operators and act in coordination with all agencies responsible for border management. These provisions eliminate the duplication of tasks and reduce unnecessary bureaucracy.

As clarified in the WCO SAFE Framework, the relationships of customs authorities should be based upon two pillars: the customs-customs pillar between customs authorities and the customs-business pillar between customs authorities and operators.

5. Professionalism: it can also be reasonably expected that legitimate trade and the circulation of travelers receive proper treatment by specialized customs staff willing to provide highly professional service with the utmost integrity. We understand that training civil servants who work in customs is a sine qua non in order for the system to operate properly.

I.4. Capacity building for organized border management A modern, efficient and competitive customs authority must have or need to develop structural elements that ensure proper management that benefits the citizens of that country (customers in a broad sense) and operators travelling through the country (customers in a strict sense). In our view, these elements can be summarized in the following eight (8) concepts: 1. Clear objectives to transform the governmentâ&#x20AC;&#x2122;s strategy into a strategic plan for customs. Specifically, the strategic objectives of the regionâ&#x20AC;&#x2122;s government must be included in an action plan that responds to and achieves those objectives. 2. Precise data collected on Gross Domestic Product (GDP), trade flows, potential and actual income, threats and responses to the same, and other data expected

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from customs. The capacity for data analysis enables the interpretation of this data and the definition of a policy that transforms strategic requirements into operational plans that provide clear objectives and measurable results in all management areas. The collection, management and disclosure of this data requires the existence of strategic and tactical information roles within customs. If the Management Plan tells us what to do (defines the objectives in point 1 above), the Objectives Plan must set out how much must be done with a view to achieving the intended results. Figure I of I.4 illustrates. Objectives Plan

How much we want to do

Tax Control Plan

What we want to do

Author: Alberto GÂŞ Valera

Figure 1 of I.4. What and how much to do. Measuring planning: management and objectives plans

3. An effective administrative structure capable of efficiently and profitably achieving objectives by allocating and managing resources to meet priority needs.

A modern customs must have the adaptive capabilities required to devote human and material resources to priority objectives.

4. An information management system that provides information on the performance of administrative and human resources which, when interpreted, contributes to decision-making and ensures ongoing improvement. The analysis of the effectiveness and efficiency of our activities will allow us to make the necessary decisions to comply with the objectives stated in this section and in section 3 above. 5. Modern management techniques: organisations should also take a more inspired approach to customs management, which requires managers with the skills and expertise necessary to understand and implement strategic management, prioritization, delegation of authority, communications, change management and management of the program or project. 6. Modern information and communications technology: the variety and speed of trade and travel cannot be managed on a fully-papered documentary basis. Automation is fundamental to organize and manage the information required to effectively implement controls as quickly as possible and with minimal interven-

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tion. Technology also offers the possibility of limiting the scope of the actions of corrupt officials. 7. Commitment to cooperate with businesses, economic operators, the public and other publicly-owned organizations. The signing of Memoranda of Understanding, the proliferation of authorized economic operators, the Global Network of Customs that the WCO is developing, and agreements developed by Ministries of Finance with other government agencies to improve information exchange are examples of steps that have been taken in the right direction. 8. Periodic external audit involving independent evaluation of strategy, plans, direction and performance. In Spain, this audit is developed both internally (through an International Auditing Service) and externally through financial monitoring carried out by the General Intervention Board of the State Administration. In conclusion: The development of these capabilities will be a major challenge for many customs services, as they may encounter other challenges related to a changing environment, with the demands of businesses and public expectations, which could arise during the process of change. Performance along the various dimensions will not be achieved successfully without strong government support. The benefits, however, of such an investment are: increased revenue, a more favorable investment climate, a marked efficacy in trade flows, increased security and strong economic development, as illustrated below in Figure 2.

EFFECTIVE TRADE MANAGEMENT AND EFFECTIVE SOCIAL PROTECTION AND SAFETY

GENERATE AN INCREASE IN FISCAL REVENUES Author: Alberto GÂŞ Valera

Figure 2 of I.4. Higher earnings, the direct effect of efficient management

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SUMMARY Compared to the historical and traditional fiscal role of customs, the following factors necessitate a rethinking of strategic objectives: the globalization of international trade and the relative ease of international travel. the development of ICT (Information and Communications Technologies). the necessary protection of citizens, the environment, data and a fair economy. In this context, it is important that customs be involved in creating public policies and strategic objectives. Customs authorities do not have the option of operating independently of other official agencies, traders and service users. In regard to other agencies, customs authorities must ensure that the implementation of policies and reform in a given area are not cancelled out by a contrary policy and lack of reforms in other areas.

To do so, as well as from a strategic perspective, customs must act based on principles that can be summarized as follows: acting transparently; simplifying procedures (by implementing ICTs) while providing the maximum legal security; protecting the public in all aspects (not only traditional border control) in cooperation with companies and other international customs authorities and with well-trained professionals who work with complete integrity. In terms of government objectives, customs should establish measurable action plans through specific and quantifiable objective plans, and strive to make use of information technologies for improved external control (risk analysis of business operations) as well as more efficient internal control (to make informed decisions based on data).

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UNIT II

CONCEPT AND CHARACTERISTICS OF THE TERMS “MISSION” AND “VISION” USED BY THE ORGANIZATIONS

Learning Objective Identify the concepts of mission and vision in organizations and their importance in setting strategic objectives.

II.1. Unit introduction Regardless of the size of the company there are two fundamental concepts in strategic business planning: strategic vision and mission, which currently constitute the pillars upon which modern companies base their business strategy, define their goals, and plan objectives in the short, medium and long term.

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II.2. Mission The mission is considered by Kotler and Armstrong (Marketing, 2004) as “an important element of strategic planning” because detailed objectives are developed based on the mission that guides the company or organization. An organization’s mission “is its general purpose.” It answers the question: what is the organization supposed to do? The mission statement also “states the type of customers it serves, what needs it meets, and what types of products it offers” and, in general, the scope of its business activities. It is important to consider that companies today establish a customer-centric mission that reflects the needs the company strives to meet and the benefits it provides. The company’s mission serves as the foundation for all major decisions the management team makes. Its definition includes the following main elements: Our company concept. Our nature. Our purpose. Our potential customers.

Our principles and values. Thus, the mission provides consistent guidance for management when making important decisions. The mission inspires and motivates all those who have a deep interest in the future of the organization or company. The strategy sets the direction in which the organization or company must go, its driving force and other factors that help determine what future products and services should be developed and what markets show the greatest potential. Based on these concepts we can define the mission as follows: “The mission is a statement that defines the fundamental purpose of the company or organization and which should include the type of customers it serves, what needs it meets, what types of products it offers and, in general, the scope of the organization’s business activities; therefore, it is something that motivates everyone in the company or organization to work now and in the future towards making the company’s vision a reality. This mission becomes the framework that guides actions, links what is desired with what is possible, determines current and future activities, provides unity and a sense of direction and serves as a guide when making strategic decisions.” The following are examples of the mission statements of two private sector companies. The mission is broken down to highlight the key market served, contribution and how the organisation aims to distinguish itself from its competitors.

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Figure 1 of II.2. Example Mission Statements

II.3. Vision. Characteristics of vision The concept of vision, as defined by Jack Fleitman in his book “Successful Businesses” (McGraw Hill, 2000), is “the path the company will take in the long term which serves as the route and incentive to guide strategic growth decisions alongside competitiveness”. The simple fact of clearly establishing what it is you do says nothing about the future of the company, nor does it imply the sense of a necessary change and long-term goals. There is an even greater administrative imperative to consider, that of what the company must do to meet the needs of its customers in the future and how it should evolve its business structure in order to grow and prosper. Consequently, managers are forced to look beyond the existing business and to think strategically about the changing needs and expectations of citizens and customers (whether in the public or private sector), the impact of new technologies, the emergence of new market conditions, etc. Ultimately, a company’s management should consider a number of fundamental questions about where they want to take the company and develop a vision of the kind of business they believe the company should become.

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In short, vision can be defined as a clear statement indicating where the company or organization is headed in the long term and into what type of company or organization it intends to become, taking into account the impact of new technologies, the changing needs and expectations of customers, the emergence of new market conditions, etc. It is an intellectual process in which a specific person, as part of his/ her central role in strategic activities, formulates or presents a possible future. Metaphorically speaking, strategic vision is a kind of projection of or reflection on the future that the organization or company makes today. The purpose of strategic vision is to define expected strategic scenarios in the future in line with the companyâ&#x20AC;&#x2122;s interests and objectives with the aim of obtaining evidence to determine the steps needed to achieve objectives by safeguarding the companyâ&#x20AC;&#x2122;s freedom of action. Broadly speaking, strategic vision is developed by designing hypothetical scenarios based on the projection of the main trends in the contextual situation or through other subsidiary techniques.

VISION states where the company or organization is headed in the long term and into what type of company or organization it intends to become. It is the big picture perspective, the projection of or reflection on the future that the company or organization makes today.

18 Below we describe the characteristics of vision to provide greater detail on how a company manager should be responsible for determining company visions: Integrative: vision should reflect the expectations of everyone in the organization. Participation by company leadership is required along with ongoing support from the entire organization. Far-reaching: a vision should be far-reaching according to the view of the future (long term). Attainable: it must be a possible and measurable aspiration. It cannot be a futile and immeasurable dream. Overly broad vision statements provide no practical guidance in strategy-making. In setting a vision, managers need to consider what is possible in light of external conditions, against what the organization is capable of achieving when pushed. It must be a team effort based on the experience and knowledge of organizational know-how. Active: it should include and encourage action, arousing a strong sense of organizational purpose, inducing employee buy-in. It should not be a lyrical vision. Realistic: it should be based on the management of reliable information and take into account the environment, technology, organizational culture, resources and competence. Encouraging: it must be positive, incentive, inspiring, encouraging and motivate action, leadership and institutional success. Timeframe: it should clearly state the timeframe for achieving the objectives stated in the vision.

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Consistent: it should be in line with the organization’s principles and true possibilities. Widespread: it should be known and understood by all members of the organization; as well as external audiences and reference groups. Flexible: it should be able to take on challenges and adjust to the demands and dynamics of change, including shifting customer needs, emerging technological capabilities, and changing international trade conditions. Simple language: it should be written in simple, uplifting and graphic language. Accountability: it should be created by leaders who have the ability to influence its implementation, projecting dreams, hopes and incorporating the values and interests of all members of the organization. Note that whilst it is not recommended frequent changing of the vision (and mission) statement, this is not cast in stone. A vision statement can evolve over time to reflect changing organizational and market conditions. Figure 1 of II.3 provides such an example. The Vision statement is detailed to the extent of explaining key words and qualifiers.

Figure 1 of II.3. Example Vision Statement

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II.4. Differences between mission and vision An organization’s mission is a concise statement with an internal focus, the reason the organization exists, the basic purpose that guides its activities and the values t hat guide the activities of the organization’s employees. The mission is linked to core values; it also identifies how to compete and generate value for customers. An organization’s vision describes medium and long-term goals. The vision is external, oriented towards the market, customers or citizens, and should express how the organization wants to be seen by the world in a vivid and visionary way. The main differences between mission and vision are: The mission looks internally or inward at the organization and gives it meaning; the vision looks externally or outward. The mission looks at the short and medium term, emphasizing aspects that must be changed; the vision is aimed at the long term, in the sense of safeguarding the organization’s identity, its essential unchangeable aspects.

MISSION

VISION

The mission is the fundamental purpose of the company or organization and which should include the type of customers it serves, what needs it meets, what types of products it offers and, in general, the scope of the organization’s business activities

It aims to describe assumed future strategic scenarios according to the interests and objectives of the company

Looks inside the organization

Looks outside the organization

Short and medium-term goals

Long-term goals

Highlights the organization’s identity and its unchangeable aspects

Focused on the organization’s aspects to change

For a summary of key differences in the meaning of the concepts of vision and mission, their conceptualization and formulation, watch the following YouTtube video: https://www.youtube.com/watch?v=NSwjNm9imwg (5 mins)

II.5. Strategy map An organization must know its mission and vision in order to determine its strategy. A strategy involves choosing a set of activities in which the organization will excel to make a sustained difference.

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“Strategy maps” are related to a global view of an organization’s strategies. The concept of strategy maps in the business arena was developed by Kaplan and Norton and discussed in their book Strategy Maps, under the initial principle of “if you can’t measure it, you can’t manage it”, further developed under the idea that “you can’t measure what you can’t describe”. Strategy maps (Balanced Scorecards) are important for strategic management and provide a variety of opportunities to help organizations structure and manage their strategic process. They can provide support for strategic analysis and the strategy’s development phase. In addition, visualization of the connection between tangible and intangible assets facilitates the assessment and selection of strategic options based on quantitative and qualitative criteria. However, the greatest benefit offered by strategy maps is in their ability to clarify, describe and align the individual strategies of a company’s different departments, functional areas, regions, etc. A strategy map is a graphic and simplified representation of an organization’s strategy that serves to define the organization and the direction it is headed. It provides a graphic understanding of the link between strategic objectives and a visualization of the organization’s strategy. Strategy maps show the organization’s growth objectives (turnover in the case of private organizations); target markets where there will be an increase in profitability; value propositions that will lead customers to do more business at higher margins; the central role of innovation and product, service and process excellence; and the investments in people and systems required to generate and sustain projected growth. Overall, strategy maps show how an organization will transform its initiatives and resources, including tangible assets such as corporate culture and employee knowhow, into tangible results. A company’s strategy map is the link that connects its fundamental strategy (vision, mission and objectives) with achieved results. The map clarifies the outlook that keeps core strategy and results in line. The basic idea is to start looking at a higher strategic perspective (the mission and vision of the organization) to identify what is needed, and go down the list to understand what must be done to accomplish it (setting strategic objectives). The strategy map encodes this information. Improvement in terms of higher perspectives takes a long time to be seen, but is the only way to create dramatic and lasting change in how an organization operates. Lower perspectives strengthen planning. The organization’s mission, vision, core values and main goals are expressed in terms of higher perspectives. Detailed strategies are expressed in terms of lower perspectives. Perspectives are organized in descending order by:

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Commensurability: the ability to be measured, a characteristic that leads to a more objective perspective. The perspective becomes subjective to the extent that it cannot be measured, and is therefore moved down the list. Urgency in its implementation. Tangency: the number of contact points the perspective has with the direction the organization wants to take. Visibility: from more to less visible.

Source Kaplan and Nprton (2007)

Figure 1 of II.5. Translating Vision and Strategy: Four perspectives The Balanced Scorecard (BSC) is a strategic performance measurement model developed by Robert Kaplan and David Norton. Its objective is to translate an organizationâ&#x20AC;&#x2122;s mission and vision into actual (operational) actions (strategic planning). Kaplan and Norton developed four main perspectives that an organization should have, illustrated in Figure 1 of II.5 above. The strategic vision and strategy at the core of the diagram serve as the higher order perspectives. Lower order perspectives (where strategic intent is expressed in greater detail) are explained below: 1. Financial or result perspective: in for-profit organizations, this means shareholders (to whom the organization must answer in terms of growth and profitability), while in publicly-owned organizations this involves the governments on which they depend and to whom they must answer in terms of achieving the objectives. For customs that fall under the Ministries of Finance of different countries, this perspective is directly related to meeting the macroeconomic amounts in tax co-

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llection and reducing fraud rates assigned by the National Annual Budget or the anti-fraud training and plans for each region.

All actions and activities that are designed from other perspectives (customer, internal business or learning and growth) should be targeted at this main perspective, the achievement of the result the organization seeks, which in the case of customs is essentially the tax and customs collection cited above.

2. Customer (or market) perspective: companies should set the value proposition it offers to its customers based on a unique mix of the convenience, quality, price, service and guarantee the organization provides. The value proposition will determine the target market or target customer segment with which the organization wants to maintain a priority relationship.

Kaplan and Norton cite four broad classes of value propositions: Better buy or lower total cost: affordable prices, trustworthy quality, rapid service. Product leadership and innovation: cutting-edge products from industry leaders. Turnkey: solutions tailored to each customerâ&#x20AC;&#x2122;s specific needs and preferences. Acquisition: the organization strives to capture a large number of buyers who are in a position of being unable to continue purchasing from another supplier. For example, certain products that are sold very cheaply are not comparable with those of competitors. The customer acquisition strategy leverages the high switching costs for customers, making them dependent on the organization. Acquisition is related to the concept of coercive monopoly.

A public sector organization such as customs could address the ranking with which it handles the necessary and traditional balance between trade facilitation (for customers in a strict sense: foreign trade operators) and border control (for customers in a broad sense: citizens who rely on their customs organization to ensure their safety and that of their food, toys, pets, etc.).

The different ranking can (and should) result in customs attracting different types of customers in a strict sense (foreign trade operators) based on its effectiveness, simplicity, adaptation and innovation, and a different way of being perceived by citizens (customers in a broad sense).

It should also be related to the mutual acknowledgement and trust placed in operators through different mechanisms of customs simplification.

3. Internal (business) process perspective: the nature of the value proposition (determined from the customer perspective) determines the type of internal process that an organization can develop.

a. Operations management process

The operations management process in the private sector corresponds to the effort that must be made to reduce not only manufacturing time but the delivery

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time for the customer from the moment the order is received until it is delivered to the customer’s door.

We can differentiate four main types of processes: Develop and maintain relationships with suppliers. Produce products and services. Distribute and deliver products and services to customers. Manage risks.

In customs this could correspond to the clearance, import or export time, from the moment the merchandise is received at the border until –after compliance with customs and border control requirements– it leaves the facilities for distribution or consumption.

Customs must ensure that its internal process safeguard an optimal level of service quality, improving processes while preventing and combating customs fraud.

b. Customer management process

We can wholeheartedly say that a company in the private sector will want to rank customers based on the nature of the relationship they seek with the company.

This ranking can be based on different parameters: rate of use, benefits sought, loyalty, attitude, etc.

Indicators like demographic, geographic, lifestyle factors, etc. are used in practice, when customers are dispersed over a large consumer market.

Based on this classification, the company may decide on target segments and segments it does not want to pursue.

Customer retention is important because retaining a customer has a greater return on investment than acquiring a new one.

Customer development involves customer participation, which helps to create a sense of belonging.

In the public sector, and even taking into account the ranking that customs gives to potential customers in a strict sense (economic operators), we could extrapolate the customer management process perspective to simplifications in customs that quantifiably prove that greater customs performance efficiency is reported during the period in which facilities are granted to operators. A concrete example could be the authorized economic operator (AEO).

We could also relate it to the risk management that customs performs on said operators, through subjective filters which determine the red, orange or green channel for the customs clearance of a company’s foreign trade operations.

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c. Innovation process

In a global crisis, even more noticeable in Europe today, companies need an ongoing innovation process along with existing economic globalization, for which they must participate in four major processes: Identify opportunities for new products and services. Provide resources for research, development and innovation (R&D&i). Design and develop new products and services. Launch new products and services on the market.

This process is absolutely necessary in the public sector, and more so in customs â&#x20AC;&#x2039;â&#x20AC;&#x2039; authorities. Innovation in control processes, customs clearance and collection must be continuously under review to ensure maximum efficiency, as this process runs parallel to the definition of vision.

International collaboration and comparative studies of best practices in the customs community become even more important in this process, if possible.

d. Social and regulatory processes

Companies are trying to understand the impact of their activities in todayâ&#x20AC;&#x2122;s era of environmental awareness. This is important for two reasons: Companies need to comply with laws and regulations. Companies prefer a solid reputation as environmentally-friendly and people-friendly organizations to capture the favorable opinion of customers.

There are four dimensions to social and regulatory processes: a. Environment: topics such as energy and resource consumption and emissions into the air, water and ground. b. Health and safety: safety hazards to employees. c. Employment practices: employee diversity. d. Investment in the community.

The other side of the coin is precisely the performance of customs, whose regulations allow us to verify that companies are acting properly and in compliance with environmental law, health and safety law, etc.

4. Learning, growth and technological perspective This involves the development of human, organizational and information capital. This perspective is considered crucial in any modern customs organization: without the training and continuing education of public employees and without sufficient investment in ICTs and telematics platforms a twenty-first-century customs cannot be sustained.

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This should join the need to encourage employee motivation and sense of belonging to the organization, which must be measured by efficiency and effectiveness criteria. Although an organization’s intangible assets are the most powerful way to make permanent changes in the organization, the idea behind strategy maps is to plan from the top down: start from the requirements of the highest priorities and work down to determine what is required at a human, information and organizational level. For a visual summary demonstrating strategic planning using the Balanced Scorecard, explaining how it relates to organisational functioning, see the YouTube videoclip: https://www.youtube.com/watch?v=M_IlOlywryw Figure 2 of II.5 below is a strategy map for a private sector construction company. The ovals in the figure are the strategic objectives, which are placed in the strategic perspectives (the rows) that they support. .The map illustrates how the pieces fit together to ‘tell the strategic story’. By following the “routes” of the map, the company’s value creation story can be seen and described clearly.

Author: Anonymous

Figure 2 of II.5. Strategy map of a private company The example above is based on a prívate sector business, however, the strategy mapping approach works equally well for governments and not-for-profits. For public and non-profit organizations, however, the strategy map logic is changed to reflect different desired outcomes. In a public sector organisation, the ultímate objective is generally not financial. Public sector organizations typically exist to satisfy a specific

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set of customers/stakeholders, so the hierarchy is a bit different. The ultimate objective is usually customer-related, with financial responsibility/sound cost management being but one means to achieve customer satisfaction. Figure 3 of II.5 illustrates the strategy map of a publicly-owned company. STRATEGY MAP OF A PUBLICLY-OWNED COMPANY (SPANISH TAX ADMINISTRATION AGENCY)

27 Author: AEAT

Figure 3 of II.5. Strategy map of a publicly-owned company. Unit II Summary Over the years, research as well as findings from organisational reviews have led to revisions to the original BSC model. One such modification is to the traditional customer perspective, which has been expanded to a “stakeholder” perspective – a multiple stakeholder approach which ensures that organisations are taking into account everyone and everything that impacts on overall performance. Figure 4 of II.5 below illustrates those entities included under the “stakeholder” umbrella:

Figure 4 of II.5. Balanced Scorecard Stakeholder Perspective

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All stakeholder groups are deemed equally important; with the environment being included as part of efforts to ensure sustainability (Kime, 2015). The World Customs Organisationâ&#x20AC;&#x2122;s Capacity Building Development Compendium 2009, in its discussion on Strategic Management Tools and the use of the BSC, argue that Customs administrations could make use of the strategic result ĂĄreas as illustrated in Figure 5 of II.5 below:

Source: World Customs Organisation (2009).

Figure 5 of II.5. Examples of Key Strategic Result Areas for Customs Administrations

The Learning and Growth Perspective; The Process Control Perspective; The Law Enforcement Perspective; and The Stakeholder Appreciation Perpective Whilst the first, second and fourth perpectives are basically aligned with the original BSC model and the objectives as described on pages 22-26, the proposed Law Enforcement Perspective directs our attention to:

Figure 6 of II.5. Balanced Scorecard Law Enforcement Perspective Whilst practice has highlighted challenges in full implementation of the BSC model, the WCO maintains that the permanent feedbck loop between strategy and concrete results and effects can be applied quite well and are very useful for Customs administrations in the build-up and performance of a Strategic Management system.

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SUMMARY The MISSION is the fundamental purpose of the company or organization and which should include the type of customers it serves, what needs it meets, what types of products it offers and, in general, the scope of the organization’s business activities; therefore, it is something that motivates everyone in the company or organization to work now and in the future towards making the company’s vision a reality.” The mission looks internally or inwards at the organization and gives it meaning; the vision looks externally or outwards. The mission looks at the short and medium term, emphasizing aspects that must be changed; the vision is aimed at the long term, in the sense of safeguarding the organization’s identity, its essential unchangeable aspects. VISION states where the company or organization is headed in the long term and into what type of company or organization it intends to become. It is the projection of or reflection on the future that the company or organization makes today. Both enable the development of the organization’s strategy, which is defined in a strategy map. To this end, we start from the most basic perspectives that underpin planning and move towards more specific perspectives, using the strategy to draw the path towards meeting the organization’s goals as defined in the mission and vision. Strategy maps for Customs administrations stand to benefit from a primary focus on learning and growth, process control, law enforcement and stakeholder appreciation perspectives when focusing on the key strategic result areas.

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UNIT III

STRATEGIC CUSTOMS MANAGEMENT: “MISSION” AND “VISION” OF CUSTOMS ORGANIZATIONS

Learning Objective 30

Explain the tools required to design, implement, track and assess institutional strategies.

III.1. Unit introduction. Mission, vision and strategy in customs Strategic management may simply be defined as a process of creating a management strategy based on a mission and a vision, and on maintaining the direction chosen by the organization, which, as we have seen, is developed through a strategy map. For customs, this strategy is usually based on the strategic information available on national and international obligations. As we have seen in previous sections, an organization’s mission, vision and strategy are the foundation of strategic management and the basis upon which the organization’s subsequent evolution is supported. All three concepts should therefore be developed, or at least clearly defined, from the beginning of the organization’s development process (large-scale). Below is an example of these concepts, which the World Customs Organization included in its paper “The WCO Capacity Building Development Compendium – Columbus Programme Phase 2.”

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CUSTOMS MISSION STATEMENT “Our mission is to excel in the task of effectively and quickly collecting and accounting revenue, implement the government’s fiscal and trade policies and advise the government on the same, boost trade, ensure the protection of national society and generate precise and accurate statistical data, through the development of a professional management system that is transparent, implements best practices and fulfils the obligations established on an international level”. Our main task is to: 1. Collection and accounting of tax revenue Customs is responsible for the collection of customs duties and taxes and other expenses related to international trade. To date, customs duties and import taxes are a major source of revenue for Spain, after oil/income tax revenues. 2. Implementation of the government’s fiscal and trade policies and advice on the development of these policies Other than its own Tax Administration, Customs is a government’s main authority responsible for implementing and enforcing its fiscal and trade policies. It is also responsible for international obligations related to international trade, particularly those regarding the management of industrial measures designed to promote economic development. As the authority responsible for implementation, customs is uniquely positioned to provide advice, formulate ideas and put forward proposals related to the development of national policies on tax and trade. 3. Trade facilitation Customs supports economic development and competitiveness and also encourages direct foreign investment to promote trade facilitation. In performing this task, Customs: applies modern computer systems; streamlines and simplifies customs procedures with a view to the rapid clearance of goods without compromising national security; uses effective risk management tools and makes use of scanners; respects best practices and international standards; and fosters compliance.

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4. Protecting citizens, health and the environment, and a fair economy Customs is the main authority responsible for monitoring all cargo and goods coming into or leaving the country as well as those in transit. In this regard, Customs plays a role in protecting national society and the security of international trade. Specifically, Customs supports the fight against: infringement of intellectual property rights; illegal business activities and illicit goods (for example, the importation of counterfeit or substandard goods); trafficking of illicit drugs; illegal trade in arms and ammunition; importing pornographic material; money laundering; and illegal trade in cultural objects and elements that are part of cultural heritage.

In addition, Customs plays an important role in the security of the international supply chain and implementing international obligations related to this role. 5. Production of precise and accurate statistics Customs is the main authority responsible for identifying and providing, in a timely manner, statistical data on domestic production and international trade for the compilation of the balance of payments with a view to supporting government planning policy.

III.2. Customs organizational structure The structure of customs authorities may vary depending on the priorities of the government and the people it serves; in any case, it must be organized to fulfil the aims it strives to achieve as efficiently as possible. Thus, some organizations will focus primarily on safety and have a structure with this aim. This is the case of the United States Customs and Border Protection (CBP), integrated into Homeland Security (National Security Agency) along with about 80 other publicly-owned companies; while for others the focus will be trade facilitation or revenue collection, as is the case of European Customs to date.

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Regardless of the structure, customs is often relied upon to collect economic data or trade-related data.

III.3. Strategic information To achieve the organizationâ&#x20AC;&#x2122;s mission and vision and even to set government policy in this regard, customs authorities require high-quality information in order for the organization to determine the obligations and challenges it face. Strategic information requires an active involvement in meeting the needs of the main parties affected, an active analysis of the management information available, a commitment to international partners and a targeted search to identify current and future needs. After effective analysis this information makes the identification of trends and patterns possible and can also anticipate changes. A healthy organization has a strategic information department that works closely with the management team. The role of this unit or department is to support customs in its strategic decisionmaking based on the six main sources below: 1. The Government While customs authorities may fall under the responsibility of various ministries, particularly the Ministry of Finance or the Ministry of the Interior, these ministries are not always responsible for defining operational objectives. There are other government agencies, especially the Ministries of Trade, Transport, Regulations, Health and Agriculture, which often influence the tasks assigned to Customs. Negotiations carried out by the World Customs Organization on â&#x20AC;&#x153;the trade facilitation programâ&#x20AC;? are perhaps the best illustration of these obligations. In this context, representatives from Ministries of Trade negotiate customs procedures and seek advice and guidance from their national customs services. Customs organizations which actively collaborate with the Ministries are able to ensure that their needs are understood. They can advise the Ministries on the impact their policies have at an operational level. To this end, it is necessary to establish a system of regular meetings and information exchanges. This will enable customs to cover current needs and receive early warning about possible changes or developments. 2. Commercial operators Commercial operators are important customs collaborators. By nature, this sector must remain vigilant and be sensitive to changes at the same time. The information and knowledge these operators provide are of vital interest to a modern customs

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organization. It is important to build relationships with business operators based on mutual trust and the encouragement of cooperation for development. Likewise, to the extent that modern control methods largely fall between enforcement and facilitation, it is important that customs use this relationship with commercial operators to understand their operations. Control systems that companies require to ensure cost effectiveness and performance efficiency can and should be the basis for implementing a tracking policy. Understanding these systems may allow customs to fully understand the risk and establish controls based on audits which are more efficient and reliable than traditional methods of intervention and verification. Regular contacts with traders are essential for the proper management of a modern customs organization. Numerous customs services regularly hold trade forums and stakeholder meetings. These contacts are not necessarily established through representative bodies and contacts can be established directly with the private sector, from multinationals to SMEs and owner-operators. The WCO wishes to encourage and support these two trends by underscoring, for example, the WCOâ&#x20AC;&#x2122;s latest calls for meetings (held in Sao Paulo and Seoul) to discuss Supply Chain Security, in which logistics and trade operators as well as customs directors were invited to participate. 3. The Public

Public opinion often shapes public policy. Based on this premise, understanding public opinion will also help customs to anticipate and prepare for changes. This type of information could be collected in the form of periodic feedback from the operating staff and occasional public forums or open days. Customs authorities should also ensure that the public is aware of the importance of the role that customs plays in protecting the economy and society in general. The effective use of modern media and communication technologies, as well as the organization of open days and participation in trade shows by some customs services, have significantly helped to improve compliance, increase revenue and generate valuable information. 4. Customs regions and unions The necessity of grouping regional economics, especially in the management of trade and customs unions, imposes additional obligations on customs. It is often at the regional level where customs requirements regarding long-term development and the potential for joint development can clearly be determined. It is essential that a modern customs service be aware of this factor and be engaged at a regional level. This engagement should be considered strategic and constitutes one of the fundamental tasks of senior management. Besides the obvious identification of these needs, regional engagement can have two other advantages: First, the promotion of regional development often depends on a joint ministerial operation (Finance and Commerce). This provides the opportunity to drive

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the need for change in customs at a level that has the power to ensure that this change is supported. It also offers ample opportunity to promote the global role of customs. Second, many of the largest donors target aid policies, focusing on economic regions and not a particular country. Therefore, it is more likely that funding for regional development planning is obtained. 5. International Globalization and the growing movement of people are among the main challenges that customs face. Given the pace of international development there is a constant need to anticipate and adapt management techniques to ensure that each nation maintains its security and fiscal stability and remains economically competitive. International trade management programs are backed by international organizations like the World Bank, the IMF and the WTO, who provide advice and considerable help in this area. However, it is today necessary to realize that security programs backed by large trading nations will have consequences on the role of ALL nations in terms of customs and border management. Modern systems used by developed countries to strengthen security focus primarily on controls in place in exporting countries as a first line of defense. This tendency should be integrated into any strategic assessment role of customs in order to keep from adversely affecting the economy of the exporting nation. It is essential that Customs be able to access data in the developing international model. The information provided by the WCO should be the basis for identifying trends in this regard. Other major international issues affecting the role and requirements of customs include: Trade negotiations that take place in the WCO. The promotion of integrated border management by international institutions. The trend towards the creation of economic and regional cooperation areas, leading to the establishment of customs unions. The economic cooperation agreements supported by the European Union. The SAFE Framework. The SECURE Framework. Technological advances in customs control. 6. Staff While they represent an often underutilized source of information, customs operating staff and middle managers have useful information on trends and patterns that traders and travelers who travel between countries follow.

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Staff should have the opportunity to regularly communicate this information or the ability to use a measuring system as part of the management report method, which will identify trends. The possibility of assigning specialized staff to analyze this task should also be considered.

III.4. Strategic management for an organizationâ&#x20AC;&#x2122;s growth. Implementation Customs organizations, therefore, must be provided information under the terms stated in the previous section for the purpose of designing strategic management, which could be graphically reproduced as follows:

*Information gathering and analysis techniques are presented in subsequent modules of this strategic planning course Author: Alberto GÂŞ Valera

Figure 1 of III.4. Graphical representation of an organizationâ&#x20AC;&#x2122;s strategic management Many experts recommend an integrated approach when using the concept of strategic management. This approach is based on the classical rational approach, divided into the following stages: Analysis of environmental and stakeholders demands.

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Analysis of the strengths and weaknesses of internal organization. Mission statement. Vision and strategic objectives. Selection (order) of strategic action plans and specific projects. Implementation. Control, track and modify action plans. Bearing in mind the need for ongoing analyses in the forms identified above, Figure 2 of III.4 highlights the five tasks of the strategic management process normally identified in the strategic management literature. THE SIX TASKS OF STRATEGIC MANAGEMENT

Source: Adapted from Thompson and Strickland (2006)

Figure 2 of III.4: The Five Tasks of Strategic Management Important elements should be taken into account for this approach to be truly integrated into the daily practices of a customs organization. Strategic management is an ongoing process Strategic management is not a “tool” or a “plan of action” to be implemented at a specific time. Customs authorities should be aware that strategic management should be an ongoing process. While it is useful to regularly redefine strategy (once a year, for example), the organization must continually manage strategy. In daily practice, this involves tracking and adjusting the organization’s processes and launching of new processes; The required combination of learning-based and rational perspective

One of the main challenges is to engage the various stakeholders within the organization and discover their perception of reality in order to use these elements in the process of developing strategy. The process of creating a common and re-

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cognizable language is fundamental for obtaining the best results from the strategy applied. The importance of the role of all employees at all levels of the organization

While the primary role of an organization’s senior management is to define and manage strategy, the role of the staff from the other hierarchical levels of the organization is equally important in this process. In general, upper and middle management are responsible for ensuring that strategic guidelines are reflected in the objectives and plans of the various units and teams. Operational management is concerned with ensuring that strategy has an effect on the actual work processes. Ideally, strategic management is a continuous process of interaction between the different hierarchical levels. Middle management plays an essential role in this regard, as it is responsible for communicating feedback from the operational staff to upper management, and vice versa. Thus, strategic management is not just a top-down process but a bottom-up process as well. Updated information management through the use of information technology is essential

To apply strategic management in the best possible way, it is ideal to have correct and updated information on the organization’s results. An important aspect in this regard is to make information easily accessible for the user, information that is neither too much nor too little nor too complex. Furthermore, information must be adapted to the users for which it is intended. In other words, senior management needs information that provides them an idea of the overall strategic results, while middle managers should have more detailed data, etc. A data system related to this type of management must be supported by modern IT infrastructures. The presentation of the process and the interpretation of management-related information require the fundamental intervention of many other people within the organization (authorized inspectors, accountants, employees).

III.5. Visualizing the organization as a strategic element Not long ago having a mission and vision was essentially a business trend for trendy businesses. Gradually, the trend led to a set of tools which, like a compass, are used to guide organizations in the right direction. The process of establishing an organization’s mission and vision is called the “Process of Visualization” and projects the image of excellence the organization wants to create. Both the mission and vision must be clearly stated, both outwardly (potential customers) and internally (all staff should know and share them), in a manner which is exciting and inspiring As mentioned, the mission is the company’s purpose, what allows it to exist, achieve sustainability and profitability. The mission statement describes the organization’s

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overall purpose. The mission is what the organization is TODAY; it is the central purpose for which an organization is created. The mission projects the uniqueness of the organization, regardless of its size. Ideally, the mission statement should consist of three parts: Description of what the company does. Who the company works for: target market. Presentation of what makes the organization unique: the differential factor. The mission should not be confused with the company slogan. A slogan can state a principle, but it does not project the same things as the mission, which is permanent and durable. Could a company have both a mission and a slogan? Yes, they can have both. Slogans have been used for decades. It is likely that the slogan is derived from the mission and has the same spirit, but the two should not be confused. Another common mistake is for us to rest upon the assurance that we already have our mission and vision without realizing that these cease to be relevant with the passage of time. The problem is not only that they are no longer applicable, but that if we did not notice the situation it is because no one was living the mission and vision, which leads us to think that they were stated and forgotten with time. Mission and vision are useless if they are stated but never followed. Strategic vision is an image of the desired future we seek to create through our efforts and actions. It is the compass that will guide leaders and collaborators. It will be something that makes sense and coherence of everything we do. The organization in the FUTURE. Ask the question: What it is we really want? It should be possible to achieve; it should not be a fantasy. Vision motivates and inspires. It must be shared. It should be clear and simple, easy to communicate. The vision is a statement about what your organization intends to become. It should resonate with all members of the organization and allow them to feel proud, excited, and part of something bigger than themselves. A vision should enhance organizational capabilities and the organization’s image of itself. The vision gives shape and direction to the future of the organization. From this “process of visualization”, the setting of strategic objectives is the next step in the process, a stage that puts the organization’s objectives in line with its mission and vision.

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Strategy

Vision

Values Author: AGV

Figure 1 of III.5. The interaction between Mission-Vision-Values-Strategy

III.6. Organizational values and culture In addition, for the purposes of visualizing our mission and vision, it is important that our customers and potential customers (operators and citizens for Customs) know the organization’s core values. Values are the foundations that give organizations their strength and power and reinforce the vision.

When your organization decides to state or rethink its values, it should work with at least five and a maximum of 10; more values are not recommended because they lose their impact. None of this will work if the organization’s mission, vision and values are not shared. Values are an organization’s ethical standards and determine how management acts. The values should not be developed solely by the General Manager or the person he/she designates and later announced to others: they should be the result of teamwork, although unfortunately this occurs infrequently in real life. Nor should values be simple statements, drawn up and printed on beautiful bronze plaques hung in reception or the director’s office, but should serve as true navigation charts that guide all efforts towards the company’s target direction. In its famous Arusha Declaration the WCO includes a number of ethical values that underpin customs operations and features a strong and sustainable political commitment to the fight against corruption. The WCO also states that the following key factors should be considered for an effective national program in customs ethics: 1. Leadership and commitment. The responsibility for prevention against corruption should principally lie with the head of customs and his/her management team. Also, the need for high ethical standards and an ongoing commitment to fighting corruption over the long term should also be emphasized.

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2. Legal security (regulatory framework). Laws, regulations, administrative rules and customs procedures should be harmonized and simplified as much as possible so that customs procedures can be performed without undue expense. 3. Transparency and predictability. The basis upon which discretionary powers can be exercised must be clearly defined. Appeal procedures and administrative resources should be established which allow users to challenge customs decisions or seek their review. 4. Automation. The automation and systematization of customs operations can improve efficiency and effectiveness and remove many opportunities for wrong doing. 5. Reform and modernization. Customs authorities should reform and modernize their systems and procedures to eliminate any perceived advantage that can be obtained by evading official requirements. These reform and modernization initiatives should be comprehensive and focus on all aspects of customs operations and performance. The revised Kyoto Convention provides a good reference point for these initiatives. 6. Internal audit (audit and investigation). The implementation of a range of appropriate tracking and control mechanisms such as internal reviews programs, internal and external audits, investigative techniques and judicial processes can help prevent and control corruption in customs. 7. Code of conduct. A key element of any effective ethics program is the development, publication and acceptance of a comprehensive code of conduct which sets in practical and unambiguous terms the behavior expected of all customs staff.

In the event of a breach of the code of conduct it should include the penalties proportionate to the seriousness of the offense, backed by the proper administrative and legal provisions.

8. Human Resources Management. The implementation of effective human resource management policies and procedures plays a major role in the fight against customs corruption. The human resource management practices that have proved useful in controlling and eliminating corruption in customs include: provide customs staff with a salary, other remuneration and conditions that ensure a decent standard of living; recruit and retain staff who have and seem to maintain high ethical standards; ensure that staff hiring and promotion procedures are merit-based and free of influence and favoritism; ensure that decisions on staff deployment, rotation and relocation consider the need to eliminate the chances of customs staff holding vulnerable positions for long periods of time;

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provide customs staff proper ongoing training and professional development to continually promote and reinforce the importance of maintaining high ethical standards; and implement adequate evaluation systems and performance management to reinforce good practices and promotes high levels of personal and professional ethics. 9. Organizational Culture and morale. Corruption is more likely to occur in organizations with low morale or “esprit de corps” and when Customs staff take no pride in the reputation of their organization.

Customs staff are more likely to act with integrity when morale is high, when human resource practices are fair, when there are reasonable opportunities for development and career advancement. Employees at all levels should be actively involved in the anti-corruption program and should be encouraged to accept an appropriate level of responsibility for the organization’s ethics.

10. Relationship with the private sector. The development of codes of conduct for the private sector, which clearly set standards of professional behavior, may be helpful. The penalties associated with engaging in corrupt behavior should be severe enough to deter groups of users from paying bribes or facilitation fees to obtain preferential treatment.

The set of corporate values brings corporate culture, also called organizational culture, to life. Culture is the set of values, customs, habits, beliefs, models and patterns in a society or community which serve to formally and informally regulate the behavior of its members. This includes practices, codes, standards, rules, characteristics, dress, religious tendencies, rituals, norms of behavior, stories, legends, myths and anecdotes passed down from generation to generation; the definition also includes a society or communities most important events and belief systems. This can be extrapolated to companies and is applicable in anything from small informal enterprises to large formal organizations. Additionally, culture is all the information and skills that humans possess and which affects their behavior, which can be defined as the way individuals act in relation to their environment and stimuli. Culture refers to a system of meanings shared by the majority of the organization’s members and distinguishes one organization from another. It is the particular way every organization has of doing things as a result of the interplay of six diverse factors, some of which are intangible and difficult to observe while others are expressed more explicitly as the organization’s internal documents and observable behaviors.

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SUMMARY A customs organization’s mission, vision and strategy are the foundations for strategic management and the basis upon which the organization’s subsequent evolution is supported. This organization will be structured according to the priorities of the government and the people it will serve and to most efficiently fulfill the public purposes it seeks in accordance with its strategic objectives. In order to define all these elements customs needs strategic information that should include the different areas in which the administration works, specifically the following: government, traders, the public, customs regions and unions, international relations and its own staff. After structuring and analyzing this information customs must design its strategic management approach, which should always consider the following steps: Analysis of environmental and stakeholders demands. Analysis of the strengths and weaknesses of internal organization. Mission statement. Vision and strategic objectives. Selection (order) of strategic action plans and specific projects. Implementation. Control, track and modify action plans. The visualization of this entire process allows for the projection of an image of excellence. In addition, for the purposes of visualizing our mission and vision, it is important that our customers and potential customers (for customs these are operators and citizens) know the organization’s core values, which are clearly discussed in the Arusha Declaration. The set of corporate values give life to corporate culture, also called organizational culture: culture being the set of values, customs, habits, beliefs, models and patterns in a society or community which serve to formally and informally regulate the behavior of organisational members.

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UNIT IV

ESTABLISHING STRATEGIC OBJECTIVES IN LATIN AMERICAN CUSTOMS ORGANIZATIONS

Learning Objective 44

Understand the application of the concepts of an organizationâ&#x20AC;&#x2122;s mission and vision within the context of Latin American customs authorities.

IV.1. Unit introduction After exploring the theoretical concepts of mission, vision, and strategic goals, and within the context of this planning module for customs organizations in the Caribbean, we now provide practical examples of how these concepts have been translated in real cases in Latin America. To do so we explore in detail the exemplary growth of the Chile National Customs Service, and that of other Latin American nations in less detail (but not because of a lack of quality).

IV.2. The practical example of the Chile National Customs Service The modernization of national customs services requires the review of all the elements of border management: culture, management and communications style, hu-

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man resources management, relations between management and staff associations and unions, processes, standards and procedures, organizational structure, design of work environments, equipment and technology used. This modernization also requires a new management style which incorporates, among other things, a widely shared and disseminated vision, clearly defined objectives, projects which are launched and completed and take the organization down the path it intends to go, performance standards to guide institutional efforts and incentives to promote participation, teamwork and excellence in individual and group performance. The vision of the future that customs services have may be developed from the recommendations of the World Customs Organization (WCO) cited in previous sections. This analysis will identify those elements that should be included in a modern customs and then highlight the challenges faced by a twenty-first-century customs service. Taking as an example the work of a Latin American Customs Service like the one in Chile, whose 2000-2006 Strategic Agenda, developed by the Chile National Customs Service, clearly sets out the organization’s vision and mission. This long-term perspective summarizes and represents the challenges that the Chile National Customs Service decided to face when implementing its modernization process. As a result of these studies the Chile National Customs Service determined and published the following mission, vision and strategic objectives:

IV.2.1. Mission of the Chile National Customs Service Safeguard the interests of the nation and support the country’s foreign trade through efficient and integrated oversight and facilitation of international trade operations, based on the principle of good faith.

IV.2.2. The Customs Service’s vision of the future Vision 1. The Chile National Customs Service of the future will be amongst the world’s leading customs authorities in terms of effectiveness and efficiency by using the best international practices. Vision 2. Customs will become significantly more technical and make intelligent use of the information the service generates in order to provide support to internal management and facilitate the relationship with users and external partners. Vision 3. Customs will have the capacity for intelligent oversight based on risk management. Vision 4. Customs processes will be simpler, faster and automated.

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Vision 5. Customs will have motivated staff that is highly competent in customs matters and management, able to work in teams, and whose service excellence and integrity are widely recognized both within the country and outside its borders. Vision 6. Customs staff will have the conditions and elements of support needed to perform their duties in a trusting work environment that contributes to professional development and the achievement of the organizationâ&#x20AC;&#x2122;s mission. Vision 7. Customs will work with a high degree of managerial autonomy within a framework of common policies and general regulations. Vision 8. To best achieve its objectives Customs will work closely with other customs authorities and related organizations, both public and private, at the national and international level, developing strategic partnerships and coordinating networks. Vision 9. Customs will continuously improve its processes, management and the quality of its services.

IV.2.3. Strategic objectives Course of Action No. 1: Oversight and sanctions

Objective 1: Strengthen Customâ&#x20AC;&#x2122;s oversight role based on risk management and strengthen oversight quality and the subsequent audit. Objective 2: Refine and streamline the sanctioning system to make it more efficient and effective. Course of Action No. 2: Computerization of management and automation of processes Objective 3: Simplify, automate and integrate new information technologies in key customs processes. Objective 4: Generate relevant and timely information and have intelligent processing capabilities to support institutional management. Course of Action No. 3: HR development and improvement Objective 5: Develop the skills and abilities of customs personnel in critical and deficient areas and establish clear and ongoing policies for staff development throughout their employment lifecycle. Course of Action No. 4: Improve management quality and evaluation Objective 6: Create a systematic capacity to assess and promote the continuous improvement of customs processes, management and service quality.

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IV.2.4. Strategy map and setting perspectives Once Customs has established its mission, vision and strategic objectives it must define a strategy map that will outline the way these should be accomplished and which, as we explained in previous sections, takes a perspective (from higher to lower) towards results, the organizationâ&#x20AC;&#x2122;s different customers, internal operations, and the perspective we call learning. The range of potential customers of a public organizations like Customs should engender a fivefold perspective based on the recipients of this public service, namely: a. The Treasury. The Treasury expects Customs to collect taxes, mainly customs duties, but also the value of seizures, abandoned goods, restitution of benefits unduly granted, the reimbursement of taxes that slipped through the cracks or the generation of information on foreign trade. b. Customs should ensure the following services to importers and exporters: Cargo shipping services. Recognition of benefits and exemptions granted to importers and exporters. Compliance with trade agreements. Due process to ensure fairness and accuracy of the processes of Customs Courts. Information on customs law applicable to importers and exporters. Information on exemptions or special regimes. Ensure fair competition. c. Customs should ensure travelers satisfactory services so that they can enter the country with or ship their goods and provide requested information. d. The domestic community trusts Customs to protect citizens by seizing controlled substances, ensuring compliance to protect endangered species (CITES) and act in compliance with various international agreements, as well as collect taxes for the Treasury e. Domestic producers and the trade sector trust that the Chile National Customs Service complies with trade agreements, generates information on foreign trade to assist them in their decision making, and ensure fair competition.

IV.3. Mission and vision of other Latin American customs authorities This last chapter of module 1 on the Mission and Vision of Customs Authorities seeks to provide examples of other Latin American customs authorities that have published and shared their strategic objectives.

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IV.3.1. Costa Rica The Republic of Costa Rica, through its Directorate General of Customs, has one of the better developed organizations of all the Central American customs authorities and has a clear visualization of its mission, vision, values â&#x20AC;&#x2039;â&#x20AC;&#x2039;and strategic goals on the website www.hacienda.go.cr. To this end, the organization begins by describing its mission in terms similar to those cited above (Chile), but setting a specific timeline: Mission Our commitment is to control and facilitate international trade operations, efficiently collect taxes by promoting voluntary compliance with customs requirements and generate timely information for decision making for the benefit of Costa Rican society. Vision We are committed to creating a Costa Rica Customs Authority that will become a world class model of excellence, transparency and honesty, staffed by highly trained personnel and equipped with cutting-edge technology, within the next four years.

A plan to review, analyze and validate or redefine the Strategic Objectives and Actions included in the National Customs Service Strategic Plan 2008-2011 was proposed. It is intended that this Plan guides the course of action to achieve the institutional mission and achieve long-term vision as part of the development of the Institutional Strategic Plan of the Ministry of Finance of Costa Rica. The new stage in international trade that Costa Rica faces requires a model of leadership and participation which makes it possible to visualize the short term, but more importantly a vision of the future that contributes to economic growth, the welfare of society, and reduces poverty and inequality. The National Customs Service wants to position itself as a modern organization that provides high-quality services, with a risk management and customs authority model that integrates information and communication technologies and seeks to maximize collection and control while contributing to economic and social development. MISSION: manage international trade operations, promote trade facilitation and voluntary compliance with a heavy reliance on information and communication technologies that benefit Costa Rican society by managing risk. VISION: be an efficient and effective organization with highly developed human potential, supported by technology and customs procedures to facilitate international trade and the management of customs operations; promote the countryâ&#x20AC;&#x2122;s growth and economic and social development within the framework of a modern management model. VALUES: Honesty: work and live in accordance with our ethical principles and good conduct in general.

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Commitment: positive attitude and identification with the duties and responsibilities assigned to us or that we accept as a means of achieving personal and organizational objectives. Responsibility: ability to answer for our actions and accept the consequences of our decisions, promoting specific actions that ensure compliance. Respect: acceptance of individuality and the right to speak and act freely while respecting the rights and responsibilities of others. Integrity: consistency between what I say and what I do, both at work and in public. Teamwork: attitude of sharing knowledge in the pursuit of efficiency and effectiveness, harnessing the potential of the group and promoting good interpersonal relationships. STRATEGIC OBECTIVES: The Customs Service outlined four strategic objectives, specifically: Improve customs processes through the use of information and communication technology. Improve the organizational culture. Promote a customs tax culture amongst citizens. Monitor customs operations and the activities of economic agents through risk management. The Costa Rica National Customs Service also defines each objective, and sets the strategy for its implementation and the areas of intervention: Objective 1. Improve customs processes through the use of information and communication technology This objective seeks not only the necessary continuity of the Sistema TIC@ (an ICT system that serves as a fundamental pillar in improving services and the positive impact for the external user, as well as in the overall performance of the Customs Management Program, in tax collection and in the simplification of procedures), and its extension to the export process, asset improvement, and free trade zones. Continuous improvement of customs procedures is a key ongoing challenge in a dynamic organization and requires constant updating and revision to achieve efficiency and effectiveness within the framework of a new economic climate and the requirements of international trade. STRATEGIES 1.1. Simplify customs processes. 1.2. Maximize the automatic exchange of customs information. 1.3. Optimize the use of automatic controls and validations.

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AREAS OF INTERVENTION 1.1.1. Adapt customs procedures. 1.2.1. Recommend the purchase of technology that promotes the exchange of information. 1.3.1. Propose the purchase of technology that streamlines processes. Objective 2. Improve organizational culture Strategic objective No. 2 is visualized from a holistic approach and aims for the development of resources and human potential in parallel with a service-oriented image as part of a specialized training plan, involving greater professionalism with more transparent processes, promoting values such as commitment, loyalty, responsibility, respect, integrity and teamwork. These three central focuses drive change in organizational culture by strengthening institutional values as part of the necessary process to renew the organization’s culture and organizational behavior. STRATEGIES 2.1. Develop human potential. 2.2. Create a service-oriented image.

2.3. Promote a value-driven management program. AREAS OF INTERVENTION 2.1.1. Promote the specialized training program. 2.1.2. Develop internal and external awareness campaigns. 2.1.3. Promote teamwork and a focus on values. Objective 3. Promote a customs tax culture amongst citizens A modern customs authority is dedicated to finding regularization processes and the promotion of citizens’ voluntary compliance with tax and customs obligations. STRATEGIES 3.1. Implement voluntary compliance policies. 3.2. Promote customs tax awareness and education programs. AREAS OF INTERVENTION 3.1.1. Promote programs of transparency, disclosure and customs tax education. 3.1.2. Arrange an agreement with the Ministry of Education to establish a “customs tax culture week”.

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3.1.3 Coordinate joint efforts with professional associations, promoting outreach and training in customs modernization. 3.1.4. Propose legal reforms. Objective 4. Monitor customs operations and the activities of economic agents through risk management The oversight and audit of customs operations is one of the core areas of the Customs Authority, as an inherent part of the exercise of immediate, ongoing and post hoc control granted by law. It is based on the risk management model, as a modern tool backed by the best international practices, which enhances the work of the supervisory bodies of the National Customs Service. STRATEGIES 4.1. Ensure the proper collection of taxes and compliance with the law. 4.2. Generate a culture of risk management. AREAS OF INTERVENTION 4.1.1. Strengthen customs control in places where customs operations are performed and of the actions of economic agents operations. 4.1.2. Implement, develop and spread the risk management model. 4.1.3. Promote a commitment to the implementation of risk management by the executing agency.

IV.3.2. Guatemala According to the information available on the Superintendent of the Tax Administration in Guatemala website (http://portal.sat.gob.gt/sitio/), Guatemala Customs has stated that its MISSION is to “raise the necessary resources for the State to provide essential services and better development opportunities to Guatemalans by obtaining maximum revenues; impartial and full implementation of tax and customs legislation; and facilitating citizens’ voluntary compliance with tax and customs obligations.” Its VISION is “to be a modern, prestigious and credible institution which effectively and transparently manages the tax and customs system, uses best practices in tax and administrative management, and produces value for citizens, taxpayers and its officials and employees.” Its VALUES are similar in part to those declared by the Costa Rica National Customs Service: Responsibility: all the functions and duties assigned to the Superintendent of the Tax Administration employees and officers are effective and timely and are performed with discipline and team spirit.

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Transparency: all the attitudes and actions of the Superintendent of the Tax Administration employees and officers meet the ethical standards of moral and social behavior; so that transparency is reflected in the performance of assigned duties. Productivity: all the attitudes and actions of the Superintendent of the Tax Administration employees and officers seek the optimal use of resources to ensure the proper use of labor inputs to obtain expected results. Integrity: all the functions and duties assigned to Superintendent of the Tax Administration employees and officers are performed with rigor, irreproachable conduct and consistency in what one thinks, says and does. Professionalism: all the functions and duties assigned to Superintendent of the Tax Administration employees and officers aim to timely apply know-how with skill and effort to achieve the expected results, with a passion for excellence.

IV.3.3. Honduras The Directorate of Revenue publicizes its information on its website http://www.dei.gob.hn.

The Directorate states one its core values, honesty, on its home page (“being honest is a business”, it says), a message that has a dual interpretation: internally (the Directorate’s staff) and externally towards the taxpayer. This also subliminally highlights the organization’s fundamental mission: tax collection is necessary to maintain hospitals, schools and police, which is graphically depicted by images of professionals engaged these professions. MISSION Efficiently collect internal taxes through the transparent and proper implementation of tax laws, providing quality service to the taxpayer in order to provide the Honduras Government the necessary resources to reach its social and economic development goals. VISION In 2014 the Directorate of Revenue will be recognized as a strong, transparent and competent tax and customs authority that is safe from political intrigue; it will be sustainable and actively contribute to social and economic development in Honduras. VALUES From the start the Directorate of Revenue developed a set of institutional values that stemmed from their daily activities; these values should lead the way for all employees to achieve the Vision and Mission. The Directorate of Revenue’s institutional values are:

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Service: we quickly and efficiently respond to taxpayer needs. Integrity: our employees are trained and empowered to make morally and ethicallybased decisions based in their respective areas of work. Responsibility: we understand and recognize the consequences of our daily actions. Efficiency: we make efficient use of available resources to achieve our aims.

IV.3.4. Nicaragua The General Directorate of Customs Services provides information on the mission and vision of Customs in Nicaragua: http://www.dga.gob.ni/ According to the website the Nicaragua Customs Authority’s MISSION is similar in terms to those of other Latin American countries: “Expedite and facilitate foreign trade, complying with and enforcing customs and related laws, raising taxes with efficiency and transparency, provide timely and efficient administrative management, contributing to national development.” The VISION is as follows: “To be modern and efficient, with high standards of excellence and technical quality, adherence to the law, continuously improve processes and streamline the customs service required by foreign trade, with professionalism, service, ethics, loyalty and fairness.” In a separate section Customs establishes its VALUES as basic principles of corporate conduct for all General Directorate of Customs Services staff: Ethics Transparency Compliance with the law Loyalty Excellent service Responsibility Equity Professionalism Teamwork

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IV.3.5. El Salvador In the case of the Republic of El Salvador the General Directorate of Customs includes its mission, vision and values on the Ministry of Finance website. MISSION Manage and administer public finances efficiently, honestly and transparently through responsible management, the impartial application of the law and the pursuit of fiscal sustainability; progressively increasing revenue, the quality of spending and public investment. VISION Be a modern institution that constantly strives for excellence and to provide outstanding service to its customers, an institution managed by results and which has ethics, integrity and transparency. INSTITUTIONAL VALUES Customer service: we are committed to meeting the needs and expectations of our users and contributors politely and with timeliness, professionalism and efficiency.

Teamwork: in order to achieve the institution’s objectives we encourage integration, collaborative work, communication and solidarity. Honesty: we behave ethically, respectfully, responsibly and with loyalty towards the institution, our co-workers, users and taxpayers. Transparency: we operate with efficiency, effectiveness and accountability and in such a way that our management’s adherence to laws and procedures can be established; Innovation: we strive for continuous improvement and creativity and we encourage factors for success in each of the activities we perform. Available at http://www.mh.gob.sv.

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SUMMARY As discussed in this unit all countries agree on the importance of defining the concepts developed in this module and almost all incorporate them into the definition of their tax and/or customs authority mission, the only difference being that it may be part of the Ministry of Finance, Department of Revenue, or more specifically a General Directorate of Customs. When defining their vision organizations generally coincidence in wanting to become a modern, efficient, and transparent organization that contributes to development. MISSION

COSTA RICA

GUATEMALA

VISION Be an efficient and effective organization with highly developed human potential, Manage international trade operations, supported by technology and customs promote trade facilitation and voluntary procedures to facilitate international trade compliance with a heavy reliance and the management of customs operaon information and communication tions; promote the countryâ&#x20AC;&#x2122;s growth and technologies that benefit Costa Rican economic and social development within society by managing risk. the framework of a modern management model. Raise the necessary resources for the State to provide essential services and Be a modern, prestigious and credible insbetter development opportunities to titution which effectively and transparently Guatemalans by obtaining maximum manages the tax and customs system, uses revenues; impartial and full implemen- best practices in tax and administrative tation of tax and customs legislation; management, and produces value for and facilitating citizensâ&#x20AC;&#x2122; voluntary citizens, taxpayers and its officials and compliance with tax and customs employees. obligations.

HONDURAS

Efficiently collect internal taxes through the transparent and proper implementation of tax laws, providing quality service to the taxpayer in order to provide the Honduras Government the necessary resources to reach its social and economic development goals.

By 2014 the Directorate of Revenue will be recognized as a strong, transparent and competent tax and customs authority that is safe from political intrigue; it will be sustainable and actively contribute to social and economic development in Honduras.

NICARAGUA

Streamline and facilitate foreign trade, complying with and enforcing customs and related laws, raising taxes with efficiency and transparency, provide timely and efficient administrative management, contributing to national development.

Be modern and efficient, with high standards of excellence and technical quality, adherence to the law, continuously improve processes and streamline the customs service required by foreign trade, with professionalism, service, ethics, loyalty and fairness.

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Manage and administer public finances efficiently, honestly and transparently through responsible management, the EL SALVADOR impartial application of the law and the pursuit of fiscal sustainability; progressively increasing revenue, the quality of spending and public investment.

Be a modern institution that constantly strives for excellence and to provide outstanding service to its customers, an institution managed by results and which has ethics, integrity and transparency.

Responsibility, integrity, teamwork and transparency are the most repeated values in Central American countries. Some focus on more specific and concrete values, compared to others which provide more vague concepts. Some define only four values, and others include eight.

COSTA RICA GUATEMALA

HONESTY

COMMITMENT

RESPONSIBILITY

RESPECT

INTEGRITY

TEAMWORK

HONDURAS

NICARAGUA EL SALVADOR

X X (LEALTAD) X

X (ETHICAL) X

PRODUCTIVITY

PROFESSIONALISM

X (EFFICIENCY) X

SERVICE

ADHERENCE TO LAW

FAIRNESS X

INNOVATION TRANSPARENCY

However, all countries without fail state a clear intention to establish and emphasize the importance of proper strategic planning in their respective regions. Similarly this course, and each and every one of its modules, aims to convey the importance of the concepts discussed for a twenty-first-century customs authority.

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References Kaplan, R. and Norton, D. (2007). ‘Using the Balanced Scorecard as a Strategic Management System’, Harvard Business Review, July.

http://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-management-system/ar/1 Kaplan, R. and Norton, D. (1992). Strategy Map. Ed. Harvard Business Kime, K.J. (2015), “The Balanced Scorecard: From Customer Perspective to Stakeholder Perspectives”, A Project Presented to the Faculty of Humboldt State University in Partial Fulfillment of the Requirements for the Degree Master of Business Administration. Kotler, P. & Armstrong, G. (2003). Principles of Marketing. Pearson. Ortiz, S. (2003). Visión y gestión empresarial. 1st ed. Madrid: Thomson. Thompson, A. and Strickland, A. (2006) (13th ed.), Strategic Management: Concepts and Cases, McGraw Hill/Irwin. World Customs Organization, Columbus Programme (2010). Implementation of Phase II.