Operating a Goodwill in Ukraine

Abstract
The Ukraine is currently experiencing a crisis which started when former President Viktor Yanukovych disregarded a deal with The European Union for strong relations with Russia. Riots have been going on for over a year and gangs have formed. The number of deaths occurring are increasing, while The Happy Planet Index scored The Ukraine a 37.6 and is ranked number 100 out of 150 countries. There are many influences regarding business in The Ukraine including: cultural, economic, legal, political, and government. The Ukraine is involved in some international organizations including The United Nations. When trying to open and operate a Goodwill in The Ukraine there will be many importing, exporting, and marketing strategies. By opening and operating a Goodwill in Ukraine, there is an opportunity for the company to help the citizens who are effected by the crisis which may help bring The Happy Planet Index for the country up.

Operating a Goodwill in Ukraine The Ukraine has a long historical background. From the beginning of The Ukraine’s creation to the year 1712, there has been four significant periods. “During the Miocene Period in Tertiary Age of Cenozoic Era, some 12 million years ago, most of Ukraine was covered by sea” (Hrushevs'ky, Skoryk, "History of Ukraine"). Between the years 879 and 1913, The Ukraine had been dominated by several groups. Originally, The Ukraine was divided between three Princes who were brothers. PriceVolodymyr defeated his brothers and created The Ukraine State with Kyiv as its capital. From 1360 to 1599, Lithuania and Poland both dominated The Ukraine.
Between 1599-1711, a democratic military style group called The Cossack’s over took parts of Moscow and gained alliances with Poland. During this time period some of The Cossack’s rebelled and forced Poland to sell The Ukraine to Russia. The Ukraine Statehood was declining in 1712 and lasted until 1783.The Ukrainian’s were bothered by The Russian Military and The Cossack’s were being taken over by Russia. Eventually Russia and Austria completely took over The Ukraine. During the years 1783 to 1913 there was a Ukrainian Renaissance, in which children began learning The Ukrainian language and people were embracing The Ukrainian culture.
In 1918, Ukraine became an independent country. In 1921, Russia took over two thirds of The Ukraine, while Poland took over the other third of the country. Between 1931 and 1938, under Stalin’s collectivism campaign over seven million people had died. During World War II, the Nazi’s took over most of the country and the majority of the Jewish population were killed by the Nazi’s. Between 1944 and 1991, The Ukraine is ruled by the Soviet Union although there were numerous attempts to regain independence. In 1991, The Ukraine was again an independent country, free of the Soviet Union by the population voting ninety percent yes in a referendum.
Currently in Ukraine there is a crisis which began in November of 2013 when former President Viktor Yanukovych and his government deserted an indenture with the European Union for better relations with Russia.
Ukraine has been torn between east and west since the collapse of the Soviet Union in 1991. Ukrainian is the main language in western regions - where there is also a long-standing aspiration for integration with Europe. However, Russian is predominant in parts of the east and south (British Broadcasting Corporation, "Ukraine crisis in maps”, 2015). Anti-government protesters started in the capital city of Kiev and spread throughout the country by early 2014. On May 25th 2014, Petro Poroshenko was elected President. Violence and battle are still currently on-going.
In 1902 a Bostonian named Rev. Edgar J. Helms established the first Goodwill. Rev. Edgar J. Helms would gather used clothing and houseware items from the upper class neighborhoods and hire people from lower class neighborhoods to repair the items and he would then sell the items or give the items back to the workers. This system worked well and it created the philosophy of Goodwill “a hand up, not a hand out”. The mission of Goodwill is “Goodwill works to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.”. The vision of Goodwill is “We have courage and are unafraid. With the prayerful cooperation of millions of our bag contributors and of our workers, we will press on till the curse of poverty and exploitation is banished from mankind” (Goodwill Industries International, “About Us”, 2015). Over ninety cents of every dollar made at Goodwill goes back to charities, training, and helping the community.
In 2013, 261,857 people gained employment with the help of Goodwill. There are 165 community based Goodwill’s in The United States and Canada. Each one of the Goodwill’s offers training for people who want to find a job, earn a degree, or earn more income. The Goodwill will pay for a GED or a two year Associate’s degree for any employee or their immediate family after ninety days of employment. Each Goodwill must be accredited and become a member through Goodwill Industries International.
Culturally, when the Ukraine was part of the communistic Soviet Union there supposedly were no social classes. In an ideal communistic society the lower class has the ability to have the same social status as the middle class. The wealth of the state is equally distributed and all production is controlled by the state. When The Ukraine became independent in 1991, the former Soviet leaders became of a higher status. Education workers, Research workers, and Health care workers are considered lower class. Similar to the United States a symbol of status are materialistic items such as: cars, houses, and clothing. The Ukraine is located between Asia and Europe so there is a mix of both Eastern and Western Culture. The Soviet Union did not like speedy decisions and believed when conducting business with a Westerner they were always getting the lesser part of the deal.
The mix of post of a post-Soviet state and Ukrainian culture creates a good and unique influence on business. Ukrainians are not punctual when arriving to appointments or meetings. Since Ukraine was dependent on Russia for many years, they do not work well individually. Due to the fact that Soviet leaders became a higher class, having personal connections within the Ukraine helps people get jobs. The majority of Soviet military stations were located in Ukraine which produced a large number of trained workers. The Ukraine is now only starting to realize that when doing business with a business from the west, the deal is fair for both parties.
When the Ukraine became independent from Russia’s Soviet Union in 1991 their economic system was very strong. The Ukraine had great fertile soil that produced much output to other Soviet republics. Soon after their independence, the Ukrainian government loosened restrictions on pricing and the government created a legal framework for making agricultural areas private. Most Ukraine did not like this idea and by 1999 output from Ukraine had fallen forty percent compared to 1991. The Ukraine still was depending on Russia for certain supplies like gas and fuel. “Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy” (CIA World Fact Book, "Ukraine Economy Profile 2014”, 2015). Since the Ukraine’s independence, they have created their own currency called The Ukrainian Hryvna. Due to the fact that the Ukraine is still trying to establish a stable economic system, there are still issues that is making their economic system unstable. One of these issues includes the citizens of The Ukraine using an informal sector to gain extra income.
The World Bank defines GNI as the Gross National Income converted to U.S dollars. In 2010 the GNI for The Ukraine was $2,990. The following year the GNI was $3,110. In 2012 it was $3,500. The next year the GNI was $3,760. Finally in 2014 the GNI for The Ukraine was $3,560 (The World Bank, "GNI per capita, Atlas method [Current US$]”, 2015). GDP stands for Gross Domestic Product. According to Trading Economics the GDP of The Ukraine makes up 0.21% of the entire world’s economy. In 2010 the GDP for The Ukraine was $117.23 billion. The next year the GPD was $136.42 billion. In 2012 it was $163.16 billion. In 2013 the GPD was $175.78 billion. In 2014 the GPD was at an all-time high at $183.31. Beginning in 2015 the GPD for The Ukraine had dropped significantly to $131.81 billion.
The narrow features of The Ukraine’s economy shows that the country is still very unstable. Although the gross national income has stayed roughly the same for the past 5 years, the figures are still very low. By putting a Goodwill into the country it may be able to help the citizen be able to buy clothes, furniture, books, and everyday needs at a low cost. The Ukraine’s gross domestic product only makes up 0.21% of the world’s economy. This number again is very low. It is an indicator that the country’s economic system is still fragile and needs to be worked on.
Since the Goodwill supplies its goods by donations the gross domestic product may not be needed to analyze regarding goods produced. The Goodwill provides jobs for people with barriers and for people who need training for the job force. By putting a Goodwill in The Ukraine this may be able to improve the gross domestic product in regards to services produced. It may been hard to operate an international business since the GNI is so low. The Ukraine currently relies on Russia for many of its resources which may hinder an international business.
The Ukrainian legal system is based around a law system that was created in Europe called Civil law or Roman law. The Ukraine’s laws are coded and put into a referable system of laws. The Ukraine became an independent country in 1991 so the country is still trying form a perfect legal system. The Ukraine joined the European Council in 1995 and created a new constitution in 1996.
In 1998 the Partnership and Co-operation Agreement (PCA) with the EU entered into force and an according action plan for legislative approximation was adopted 2005. Also a working party for accession to WTO has been established in 1993. The Civil Code has been reformed and the new law came into force 2004. Further towards market-oriented legislation also the Economic Code was adopted together with the new Civil Code (The European Union, "Ukrainian legal system overview").
The Ukrainian legal system is a mix between French Civil Code, Roman law, and Traditional Ukrainian customary law. Ukraine’s civil law deals with creating provisions between a citizen and legal groups. The Company Law is embedded with the Civil Code which some believes needs to be updated because there are too many loopholes. The Ukraine’s customary laws are laws that are to be abided by citizens. As of July 2014, The Ukraine has started using David Barton’s Theocratic law to help create their national law. Due to the fact that The Ukraine has only been an independent country for 24 years, they are still trying to create a perfect legal system. Their current legal system has many gaps which allows anyone trying to conduct business in the Ukraine to misinterpret the law. The Company laws contains loopholes which can affect businesses because competitors can use them to get a hand up.
The Ukraine is considered a parliamentary-presidential democratic republic. Prior to Ukraine’s parliament called The Supreme Council, the Ukraine was operating on a legislature called Supreme Soviet. The Supreme Council, according to Ukraine Trek “It is a 450-person, single-chamber legislature. Ukraine parliament members are chosen to four year terms in free, multicandidate elections. The chief executive of Ukraine is the President, who is also chosen in free elections” (Ukraine Trek, "Ukrainian political system”, 2007). There is currently a political crisis happening in the Ukraine. In November of 2013 many protests broke out because the Ukrainian government did not sign an agreement with the European Union. Instead the Ukrainian government sought closer economic ties with Russia. There is a lot of violence and protests happening in the Ukraine. Their currency the Ukrainian Hryvnia is becoming worth less. The Ukraine is one of the top suppliers of grain, which if the political crisis continues can affect business globally. Ukraine’s political system is unpredictable at this point, which can be tricky when trying to establish a business there.
The Ukraine is a part of many international organizations. The Ukraine is a member of the United Nations. The United Nations supports peace within nations, develop friendly relations, and to solve international issues such as: social, economic, and cultural problems. “Ukraine was among the first nations to put its signature under the United Nations Charter, entering thus the group of the UN founding states of 51 nations. Today the UN membership stands at 192 nations” (Ministry of Foreign Affairs of Ukraine, "Permanent Mission of Ukraine to the United Nations”, 2012). The Ukraine is also a member of United Nations Economic Commission for Europe which their mission is to create economic integration between fifty six countries. The Ukraine also participates in The United Nations Educational, Scientific and Cultural Organization. The Ukraine is a member of The World Trade Organization who handles trades between nations. They are also a part of The International Monetary Fund, The World Bank Group, NATO Partnership for Peace, The Euro-Atlantic Partnership Council, and The Council of Europe.
The home country for the Goodwill in the Ukraine would be the United States. The Goodwill has affiliates in fourteen other countries including: Korea, Brazil, Panama, Mexico, Finland, Spain, Venezuela, West Indies, Philippines, Thailand, Italy, Taiwan, Uruguay, Costa Rica, and Israel (Goodwill Industries International, "Global”, 2015). When it comes to pricing the items sold “The Cabinet of Ministers of Ukraine has price-governing authority to determine which goods and services are subject to fixed or government-regulated prices” ("2014 Country Commercial Guide for U.S. Companies "). The Ukraine offers lower trade rates to most favored nations where goods originated from other countries in the World Trade Organization. The goods that are imported would be from the citizen of the Ukraine, since the Goodwill operates solely on donations. The exports would be the goods sold to the citizens of the Ukraine. By creating jobs for the citizens of the Ukraine, services learned would also be considered an export.
After compiling and comparing data about the Ukraine’s political, legal, and economical situation, it has been determined that opening and operating a Goodwill would not be successful at this time. The political and economical atmosphere is too unstable at this current time. The crisis that is surround the Ukraine is destroying the country and its economy. If the situation in the Ukraine does improve, opening up a Goodwill may be successful. The Goodwill provides jobs and training to those in need. The Goodwill operates on donations which could improve the Ukraine’s ecological footprint. For the company to expand Goodwill International would have to fund the project of establishing a business in the Ukraine. The Goodwill would operate with American procedures. An extensive 3 day, 8 hour a day training would be implemented to train the employees in the various areas of work. Although the political crisis is hindering the operation of a Goodwill in the Ukraine, if the situation becomes resolved, the future may look bright for a Goodwill in the Ukraine.

References
2014 Country Commercial Guide for U.S. Companies. (2010). Retrieved July 14, 2015, from http://www.buyusainfo.net/docs/x_5580707.pdf
About Us. (n.d.). Retrieved July 11, 2015, from http://www.goodwill.org/about-us/
Global. (2015). Retrieved July 13, 2015, from http://www.goodwill.org/global/
GNI per capita, Atlas Method (Current US$). (2015). Retrieved July 6, 2015, from http://data.worldbank.org/indicator/NY.GNP.PCAP.CD
Hrushevs'ky, M., & Skoryk, G. (n.d.). History of Ukraine. Retrieved July 10, 2015, from http://www.torugg.org/History/history_of_ukraine.html
Permanent Mission of Ukraine to the United Nations. (2012.). Retrieved July 12, 2015, from http://un.mfa.gov.ua/en/ukraine-un/general-information
Ukraine crisis in maps. (2015, February 18). Retrieved July 10, 2015, from http://www.bbc.com/news/world-europe-27308526
Ukraine Economy Profile 2014. (2015). Retrieved July 11, 2015, from http://www.indexmundi.com/ukraine/economy_profile.html
Ukrainian legal system overview. (n.d.). Retrieved July 11, 2015, from http://www.eu-shc.com.ua/en/ukrlegalso.htm
Ukrainian political system. (2007). Retrieved July 13, 2015, from http://ukrainetrek.com/about- Ukraine-overview-/Ukrainian-political-system