The Changing Geography of International Business - Essay Example

?The Changing Geography of International Business Table of Contents Introduction 3 Culture and Language of Latin America 3 Politics of Latin America 4 Culture and Language of China 5 Politics of China 5 Culture and Language of Russia 6 Politics of Russia 6 Culture of Africa 7 Politics of Africa 7 Conclusion 8 References 9 Introduction Comprehending the environment where a business tends to operate; is quite significant for running the business unit successfully at any place. The concept of business environment denotes external forces, institutions and factors that are unmanageable by the business and thus may impact the functioning of business enterprises (Ward & et. al., 1999). Culture plays a vital role in shaping the business environment. The political, technological and economic changes lead towards cultural diversities in the 21st century all around the world. The main objective of the paper is to consider the most significant characteristics of four regions namely Latin America, China, Russia and Africa that have shaped the business environment and that outsiders need to be aware of when initiating a new enterprise or while establishing operation there. The two significant characteristics that have been chosen for the study are culture and language, and politics. Culture and Language of Latin America The word ‘Latin America’ is used to explain the collection of 21 countries in the continent of South America. The language that is spoken is Latin. It has been observed that Latin America enjoys components of historical experience, culture and language. Latin America is an ethnically diverse region and is also deemed as a mounting political and economic force. The main languages that are spoken in this continent are Spanish, Portuguese and French (Teegan & Doh, 2002). Conventionally, the Hispanic family is a cohesive group and the most vital social unit. They generally believe in extended family. It has been observed that in Latin cultures, the familial group is quite crucial. In a few of the Latin American countries, peasants might leave their workplaces during holidays so that they can meet their relatives in other parts of the country. They also tend to attend the funeral, weddings of their friends, or distant relatives. A manager may be faced with greater difficulties related to non-attendance impacting the workplace to a major extent (Martinez-Calimano, 2006). According to a study conducted by Geert Hofstede for Latin American countries, it was noted that there is high power distance in Latin America. In Latin America, the people in higher level of authority expect to gain respect from others and are familiar to make decisions without taking into consideration the viewpoints of their subordinates. Latin America has low individualism rate. In Latin America gender roles become quite different in comparison to the United States, men hold the greater authority. There is high uncertainty avoidance in Latin America (Geert Hofstede, 2012). Politics of Latin America Latin America enjoys neither total-socialism nor free-market neoliberalism. The region has been ranked as the third most unbalanced region in the world in the context of post-war period. Political unsteadiness has been one of the most persistent issues in Latin America. It has been noted that from the year 1971-2000, three nations belonging to Latin America were consistently democratic within the thirty year phase, while the other countries have changed from democracy to autocracy and vice versa at least once during the time period. It can be analysed that such political instability tends to obstruct the economic development via its impact upon the accrual of both physical and human capital (Blanco & Grier, 2000). Culture and Language of China China has a prolonged history of cultural competence. China is considered as globe’s oldest civilisation among the culture that subsists today. The Chinese have been capable of preserving the old values still today. It is identified that when the Chinese entrepreneurs are operating their businesses, their attitudes towards their customers are generally patient, inviting and kind. Since the people of China generally desire to be part of a supportive family, therefore in this context they prefer to make progression in a collective way. A majority of Chinese people are generally found to be conversant in speaking in their own native languages and therefore they are not capable of communicating properly and coordinating fully in their surrounding global community. According to Hofstede, China ranks quite high in terms of power distance and have strong degree of collectivism (Goodall & et. al., 2007). There are many ethnic groups in China and therefore numerous languages are spoken in this country. Putonghua or Mandarin is the official language of the country. Politics of China The prime political party of China i.e. Chinese Communist Party’s (CCP) main objective is to protect its monopoly on power. It is because of the transforming away from the extremism of Mao Tse-tung towards Deng Xiapong’s more practical policies, the CCP’s legitimacy has become based upon its capability to generate tangible economic benefits and protect China’s territorial veracity (Woodrow Wilson School, 2007). China is quite exclusive case in the context that while it has permitted the economy to be unlocked to Capitalists Multinational Corporations (MNCs), it is still monitored by the Communist Party with the leadership retaining the state power. Culture and Language of Russia The culture of Russia is quite rich. The culture of this country includes arts, literatures and traditions among others. In terms of Hofstede’s cultural dimensions, it has been found that the culture of Russia in the mid-1990s appeared to be moderate in terms of individualism, masculinity along with power distance. It was ranked higher in terms of uncertainty avoidance and paternalism (Naumov & Puffer, 2001). More than 81% of the people in Russia converse in the formal language that is Russian as their first language (Kwintessential, n.d.). Politics of Russia The political power in Russia is mainly consolidated in the possession of the President along with the Presidential Administration within the Kremlin that has an impact upon all features of domestic as well as foreign policy. It is because of the technological, social and political innovations and because of the impact of globalisation the degree of change is growing in most of the Russia’s social as well as commercial fields. The political environment of Russia has been volatile till the early 1990s. However, there was significant improvement in the political environment of the country after 2000. It has been expected that there will be continued rise in the prosperity of the country although the country is highly dependent upon the prices of oil, raw materials and gas in the global market (Copenhagen Institute for Futures Studies, 2005). Culture of Africa It has been observed that Africa reports higher collectivist beliefs. The region ranks high in terms of power distance and uncertainty avoidance. It demonstrates higher feminine society. It is quite remarkable to note that there are more than 3000 languages spoken in Africa. A few of them are Arabic along with many other languages such as Afrikaans, Igbo, Hausa, Somali and Berber among others (Pittsbury State University, 2012). Politics of Africa In the modern times, it has been identified that African countries have become both democratic and liberalised politically. In all areas of politics, Africa is trying to become modernised. African governments are working hard towards economic development. The introduction of democracy in Africa has stimulated the involvement of stakeholders as well as the public in the formation of the policy. It has heightened the degree of public debate to endorse policy aimed at attaining sustainable development instead of serving narrow groups. International trade is one of the main drivers of the environmental policy in Africa (National State of the Environment Report - South Africa, 2012). Conclusion From the overall discussion, it has been recognised that Latin America has quite unstable political environment whereas the political environments of other three regions have been quite favourable to conduct business. Most of the regions have been ranked high in terms of collectivism. The economy of China is emerging and provides opportunities for tremendous foreign investments. Africa can also be considered as favourable place to work since it is becoming modernised and making use of the modern technologies offering greater opportunities for growth and investment. With rich culture, the political environment of Russia is also quite stable, therefore offering the new entrepreneurs to grow and sustain in the long run. References Blanco, L. & Grier, R., 2000. Long Live Democracy: The Determinants of Political Instability in Latin America. Introduction. [Online] Available at: http://www.ou.edu/cas/econ/wppdf/instabilityinla%20rg.pdf [Accessed February 28, 2012]. Copenhagen Institute for Futures Studies, 2005. Russian Prospects-Political and Economic Scenarios. The Future of Russian Democracy. [Online] Available at: http://lib.tsinghua.edu.cn/find/guide/russia.pdf [Accessed February 28, 2012]. Goodall, K. & et. al., 2007. Expatriate Managers In China: The Influence Of Chinese Culture On Cross-Cultural Management. Working Paper Series. [Online] Available at: http://www.jbs.cam.ac.uk/research/working_papers/2007/wp0701.pdf [Accessed February 28, 2012]. Geert Hofstede, 2012. Venezuela. Culture. [Online] Available at: http://geert-hofstede.com/venezuela.html [Accessed February 28, 2012]. Kwintessential, No Date. The Russian Language. Russia. [Online] Available at: http://www.kwintessential.co.uk/resources/global-etiquette/russia-country-profile.html [Accessed February 28, 2012]. Martinez-Calimano, E., 2006. “Culture As A Possible Factor Affecting The Productivity of Hispanic Employees Working Under The Supervision Of Non-Hispanic American Managers”, Inter Metro Business Journal, Vol: 2, Iss: 1, pp: 12. National State of the Environment Report - South Africa, 2012. Political Environment. Overview of the Chapter. [Online] Available at: http://www.ngo.grida.no/soesa/nsoer/issues/politic/index.htm [Accessed February 28, 2012]. Naumov, A. & Puffer, S., 2001. “Measuring Russian Culture using Hofstede’s Dimension”, Applied Psychology, Vol: 49, Iss: 4, pp: 709-718. Pittsbury State University, 2012. Hofstede's Dimensions. Culture. [Online] Available at: http://www2.pittstate.edu/mgmkt/culture.html [Accessed February 28, 2012]. Teegan, H. J. & Doh, J. P., 2002. U.S./Mexican Business Alliance Negotiations: Impact Of Culture On Authority, Trust And Performance. Abstract. [Online] Available at: http://www.gwu.edu/~clai/working_papers/Teegen_Hildy_04-02.pdf [Accessed February 28, 2012]. Woodrow Wilson School, 2007. Chinese Economic Growth and Political Influence: Examining PRC Relations with Australia, Indonesia, Malaysia and Singapore. Executive Summary. [Online] Available at: http://wws.princeton.edu/research/final_reports/wws591g.pdf [Accessed February 28, 2012]. Ward, P. T. & et. al., 1999. “Business Environment, Operations Strategy, And Performance: An Empirical Study of Singapore Manufacturers”, Journal of Operations Management, Vol: 13, Iss: 2, pp: 99-115. Read More