Global Business Cultural Analysis: Singapore - Research Paper Example

Global Business Cultural Analysis: Singapore 04-10-11 Global Business Cultural Analysis: Singapore Abstract: This Business paper utilizes the opportunity to take a deep look into the Global Business Cultural Analysis of Singapore. The paper encompasses the major cultural dimensions and elements and provides an insight on how these elements are integrated into business practices by the locals, in order to conduct successful business in Singapore. Furthermore, the paper provides detail information on comparison of cultural elements and dimensions between the Nation of Singapore and the United States of America. At the end, the paper provides information on US implications on establishing and maintaining business relations with Singapore. Introduction: The history of Singapore is very remarkable, the nation gained independence on 9th August 1965, following its succession from Malaysia. Soon after withdrawing from Malaysia, the fledging nation of Singapore had to face tremendous economic problems. The Buddhist country fought years in order to eliminate mass employment and to achieve economic stability. To make matters worse, the newly independent country had to face ingrained problems such as scarcity of houses, land and natural resources such as petroleum. The establishment of World Trade Organization has ensured economic globalization. To cope and stay abreast in this era of globalization, Singapore has drawn up an extensive legal framework for its economic policies. Major Cultural Elements and Dimensions in Singapore: September 11th events changed the world and since then Singapore has face terrorists threats posed by the Southeast Asian militant Islamic organization known as Jemaah Islamiyah, mostly abbreviated as JI. Singapore is a Southeast Asian island country, consisting of 63 islands accounting for a total land area of 712.4 sq.km. On the north of Singapore is the Straits of Johor which separates it from Malaysia and the island country is separated on the southern side from Indonesia by the Singapore Strait. Singapore is a highly urbanized country, which faces serious problems posed by land scarcity. According to June 2010 census, Singapore has an approximate population of over 5.077 million, including both permanent residents and foreign workers residing in the country. Singapore has an annual population growth rate of 1.8% accounting for both permanent residents and foreign workers. While the annual population growth rate of only permanent Singaporean residents and citizens is 1%. The increase in population is the major reason for posing problems such as unemployment and land scarcity to house more people. The country has a lowland terrain and has a tropical climate. Singapore has always promoted national identity among its immigrants since the earliest days of its independence. In accordance with this promotion of national identity concept, Singapore has adopted four national languages: English, Tamil, Malay and Mandarin. The major cultural dimensions in Singapore are namely: communication, ethics, religion, values and attitudes, manners, customs, social structures, organizations and education. (Lamont, D. F.1991). History and Development of Singapore: From 1959 to 1990, Lee Kuan Yew’s served his term as a prime minister and during this period he efficiently tackled many problems. His famous large scale public housing programme effectively lowered the problem of housing shortages. In addition, his administration raised the level of living standard by curbing the problem of unemployment. (Peebles et al 1996). Moreover, Singapore’s economic infrastructure showed a dramatic development, tensions between racial groups were reduced and a national defense system was established. (Dent, H. S. (1993). Towards the end of the 20th century, Singapore transformed from a developing nation into a strong country and gained a first world status. During the tenure of Prime Minister Goh Chok Tong, Singapore meticulously tackled various problems including, SARS outbreak of 2003 and terrorist threats posed by the Bali bombings and the Islamic Organization Jemaah Islamiyah. Furthermore, Singapore also efficiently handled the devastating economic impacts of Asian Financial Crisis of 1997. In 2004, Lee Hsein Loong succeeded Goh Chok Tong as Prime Minister. The Country has a parliamentary republic which is based on Westminster unicameral parliamentary government system consisting of various constituencies. Singapore’s representative democracy is recognized as the political system, established by the constitution. Singapore is ranked as ‘partly free’ by the Freedom House and the Economist designates the country as ‘hybrid regime’. The Cabinet has authority over executive power and is led by both the Prime Minister and the President. The permanent residents of Singapore elect the President through popular vote, who serves a ceremonial position. The President of Singapore has the power to veto decisions related to the use of national reserves and the appointment of judges. The legislative branch of the government is represented by the Parliament. The members of the Parliament fall into three categories: elected, nominated and non-consistency members. The English common law forms the basis of the legal system of Singapore. From 1970 onwards, trial by jury was abolished and so now the judicial assessment is entirely based on judgeship. According to a survey conducted in 2008, the International Business executives regard Singapore and Hong Kong as having the best judicial system in entire Asia. (Baker ET AL 1988). The highly developed state capitalist mixed economy of Singapore reflects the country’s immense talent and capabilities. The sovereign wealth fund Temasek and similar entities own approximately 60% of the GDP. The comparison between Singapore’s economy and the economy of other developed countries reveal that Singapore’s economy is relatively corruption free, transparent and has low tax rates. (Czinkota et Al 2004). The economy has an open business environment and has one of the world’s highest per capita gross domestic products. The economy has been nicknamed as Singapore Model due to its perfect combination of economic planning and free market. Large numbers of Singaporean companies are registered as private limited-liability companies and thus, are represented as separate legal entities. The major exports of Singapore are electronic and chemical goods and these generate a major part of revenue for the economy. Therefore, these exports enable Singapore to import natural resources from the world. In Singapore, the concept of Entrepot trade is practiced such as the oil refinery and the water fabrication industry. In the year 2006, the Country showed a dramatic economic growth of 7.9%. The opening of the Suez Canal dramatically eased transient trade and opened an era of economic opportunities for the Singaporeans. (Bjerke, B.1999). Dimensions of culture and their integration into conducting business: Analyzing culture is immensely important in understanding the desires and needs of a region. The ethnic makeup of Singapore is diverse and constitutes 76.7% Chinese, 14% Malay, 7.9% Indians and 1.4% others. (Donaldson at al 2008). Singapore is a multi cultural region and the major religion of the region is Buddhism. Singaporeans are very respectful and courteous and expect others to practice such mannerisms as well. Strict adherence to mannerism is practiced in all aspects of business. In regards with communication and business regulations in Singapore, an American firm seeking an opportunity to do business in this region will face minor obstacles because business in Singapore is far less informal and less verbal than in any of the western countries. Singapore has four national languages but for business purposes, the language of choice is English. Therefore, in terms of verbal communication, US firms will have no difficulty in doing business with the locals. Much of the communication among Singaporeans is non verbal and therefore any western firm seeking business opportunities is expected to respect the fact that Singaporeans are group dependent and rely heavily on facial expressions and body language of their coworkers to build trust. (Mühlbacher et al 2006). The study of cultural dimensions and its integration in business also includes the analysis of values and attitudes. Values reflect a society’s interpretation of culture while attitudes represent the manifestations of values, beliefs, feelings and state of mind. Singaporeans associate tremendous importance with personal dignity and are particularly very sensitive to the idea of retaining face in each and every aspect of their lives. For Singaporeans every business relationship should reflect proper network and this can only be established on long term personal cordial relations with their western coworkers or employers. (Smith at al 2008). Singaporeans are an egalitarian society but still they prefer strong hierarchical relationships with their family members, employees and employers. Singaporean affection with hierarchy reflects their Confucianism and group dependence (Ciulla et al 2007). According to a law passed in 1997, it is mandatory for young adults to undertake the financial responsibility of their elders if the need arises. This reflects the importance of the high status enjoyed by elderly individuals in Singapore. Therefore, when interacting with Singaporeans, Americans must be careful when conducting business affairs with the elderly population. Singaporeans consider family as the centre of their society’s social structure. The people of Singapore particularly dislike the ability of westerners to answer a question promptly, because they believe that hastily answering a question indicates rude behavior, carelessness and thoughtlessness. Singaporeans are very polite and will always pause before answering a question. Therefore, Westerners must remain cautious while conducting business with the locals because of the huge cultural differences between the two regions. On the other hand, Singaporeans associate great value with the idea that business relationships take time to develop. Therefore, American firms should exercise patience while dealing with Singaporeans as this indicates that the organization is not looking for short duration benefits but is here to conduct long term business.(Blenkhorn et al 2005). Singaporeans like conducting formal business and associate great importance with business etiquettes. American firms seeking business opportunities are expected to schedule meetings by writing formally to the person concerned. Singaporeans are very punctual and expect others to show punctuality as well. Moreover, business negotiations have a very slow pace in Singapore and American firms have to realize and respect this because they are normally used to fast pace business negotiations. Implications for US businesses in Singapore: US should consider employing the ‘High Intensity’ approach in initiating and maintaining business in Singapore. The two countries enjoy bilateral relations and US have been selling arms to Singapore since the very beginning of its independence. Furthermore, the signing of bilateral Free Trade agreement in 2003 between US and Singapore has opened new opportunities of American investment. The Port of Singapore has a strategic location and therefore, is the busiest in the world. In addition, the skilled work force of Singapore along with its port infrastructure signifies the easy access to importing and exporting business. This shows that Singapore is a land of opportunities waiting to be availed by the west. By respecting the culture of Singapore, Americans can successfully conduct business in this region. (Kaynak, E. (1993). References: Blenkhorn, D. L., & Fleisher, C. S. (2005). Competitive intelligence and global business. Westport, CT: Praeger Publishers. Kaynak, E. (1993). The Global business: Four key marketing strategies. New York: International Business Press. Ciulla, J. B., Martin, C. W., & Solomon, R. C. (2007). Honest work: A business ethics reader. New York: Oxford University Press. Bjerke, B. (1999). Business leadership and culture: National management styles in the global economy. Cheltenham, UK: Edward Elgar. Baker, J. C., Ryans, J. K., & Howard, D. G. (1988). International business classics. Lexington, Mass: Lexington Books. Lamont, D. F. (1991). Winning worldwide: Strategies for dominating global markets. Homewood, Ill: Business One Irwin. Donaldson, T., Werhane, P. H., & Van, Z. J. D. (2008). Ethical issues in business: A philosophical approach. Upper Saddle River, N.J: Pearson/Prentice Hall. Czinkota, M. R., Donath, B., & Ronkainen, I. A. (2004). Mastering global markets: Strategies for todays trade globalist. Mason, OH: Thomson/Southwestern. Dent, H. S. (1993). The great boom ahead: Your comprehensive guide to personal and business profit in the new era of prosperity. New York: Hyperion. Mühlbacher, H., Leihs, H., & Dahringer, L. (2006). International marketing: A global perspective. London: Thomson Learning. Smith, C., McSweeney, B., & Fitzgerald, R. (2008). Remaking management: Between global and local. Cambridge: Cambridge University Press. Peebles, G., & Wilson, P. (1996). The Singapore economy. Cheltenham: Edward Elgar. Read More