The Business Environment in Argentina - Assignment Example

 The Business Environment in Argentina Introduction Global business environment is the prevailing business condition in any sovereign country that may influence decision making on use of resources and capabilities (De Soto 5). Global business environment exists in both internal and external environments. These may include legal, regulatory, tax, cultural, technological, social and political environments. For any multinational company to function effectively it must understand the business environment in the host country. They have to get acquainted with the language and cultures of the country they are operating in. Firms do not have control of the external business environment. This in essence means they have to adapt to the external business of the environment they are located in. The success of any multi-international firm will be determined by its ability to realize and take advantage of opportunities existing in the external business environment combined with its ability to control the threats existing in the same environment (De Soto 8). The business environment in Argentina Argentina is one of the countries in the Latin America where Brazil is considered as having the strongest growing economy. But Argentina is seen as the country leading with the best environment in terms of business. In a research carried out in 2008, all the countries in Latin America were categorized in terms of infrastructure, political, corporate, macro and globalization environments. Of all these factors, Argentina emerged as the leading business destination. Several factors contributed to Argentina being the leading candidate in terms of business attraction. Argentina has a very strong corporate environment. This is the key area where it scored the highest mark. There is a high degree of capital freedom in Argentina. This finally means there is easy access to capital for entrepreneurs wishing to set up business ventures. Labor supply is adequate at all levels; be it skilled, semi-skilled and un-skilled. In terms of taxation, Argentina corporate tax is the second lowest in the region after Paraguay at 17%. In the region, Argentina rate of tax as a percentage of returns is the lowest. The hours need for a business or start-up to comply with tax rules is still the lowest in the region. This component of corporate environment has greatly helped Argentina to become a preferred business destination for multi-national companies. In technology terms, Argentina has gone a step forward, it is among the top among the Latin American countries. It has the highest penetration of internet and personal computer interconnectivity. Broadband connectivity is highly accessible to businesses. This means communication is cheaper and reachable to majority of international companies trying to set base in Argentina. The political environment in Argentina is also the most favorable compared to its Latin America counterparts (De Soto 26). Argentina is considered to have very low levels of corruption amongst its political related offices. This explains why the processes involved in business registration and taxation take very limited periods. The country is also characterized by very strong civil rights and Argentina’s is considered to be the best in Latin America. Argentina has a population of approximately 17,134,708. This is according to the last census carried out in 2011. It is classified as an upper level income category country. It has 89,940GM per capital. In the year 2011, the overall business ranking increased which reflected higher scores among three business growth indicators. The security laws were amended to strengthen investor protection. 79% of the businesses in Argentina had a line credit in a financial institution. This is in comparison to 34% and 48% in other Latin America countries surveyed. Argentina ranked as the 11th freest country out of a total of 183 in economic freedom with a mark of 77.4% in the whole of the central and South America region. Argentina enjoys the highest economic freedom degree (De Soto 30). Business in Brazil Brazil is one among the Latin America countries which is seen as a very promising emerging market (De Soto 39). It has a very vibrant agricultural sector. Of great importance is that it will be hosting the 2014 world cup. This is the first world cup to be held in southern America. The upcoming Olympics in 2016 will also be held in Brazil. These two events are expected to give Brazil a major economic boost. Brazil is set to be a major economic destination for multinational companies over the upcoming period. This is due to the fact that with the hosting of these two events, it is expected that there will be growth in infrastructure. Many institutions will improve and ways of doing business will be made easier for foreign investors. We expect to see growth in infrastructure. These include development of roads, rail system and airports. These are the three key things investors look at. The Brazilian culture is a blend of Portuguese heritage with black African orientation. There are a variety of immigrants in Brazil. This has created an exceptional culture in Brazil that really blends well. There are a variety of local cuisines that have preserved the regional differences. This vibrant culture has created an environment where a variety of arts flourish among its citizen. The Brazilian art of poetry, music, literature and cinema have been distinguished by their exceptional quality and passion. For a visitor, the full understanding of all these cultures and cultural dimensions will help analyze them at a great depth. Communication among citizens in Brazil is very unique among the countries in Latin America. For a visitor, it will be interesting to learn than the natives communicate by respecting other people’s views and trying always to keep a positive tone. A visitor should also learn that Brazilians avoid saying no or giving negative or bad news. They do his mostly by changing the subject or overstretching conversation that you may not notice the negative aspect in it. Their culture is always to try and keep things very positive and not to disappoint. A person who speaks with passion is regarded as an effective speaker. Such a speaker has a greater impact on an audience in Brazil. Failure for one to do this will result to your audience quickly losing interest and attention. Brazilians would always seek to understand a person better so that they may know how their idea has been conceived by one. By doing this, you will be taken as a companion and trust will be bestowed upon you. Brazilians prefer to be informal. Senior people and foreigners attract formality; hence suits are best preferred in such situations. Discussions that are dynamic and even chaotic are of typical Brazilian nature hence are best suited for informal situations. It will be important to know that the dominant religion in Brazil is Christianity; mainly Catholics. Brazil has a population of around 193.7 million. The main language spoken is Portuguese and is led by a president directly elected by the people. Business in Peru According to the results of 2009 microscope index, Peru ranked as the best country in having the best global business conditions for micro-finance ( De Soto 26). This was the second time Peru ranked in this manner. This effectively means it was the best ranked country in the whole of Latin America. Peru is one of countries in the Latin America. The country`s culture is mostly characterized by the relationship between Amerindians and Hispanic cultures. Like most Latin American countries, football is the dominant sport. The country has produced football players of international standards over history. Since time immemorial, the nation has developed a tradition cuisine. Most of these cuisines have potatoes, maize and tomatoes as the main ingredient. The Peruvian food is accompanied by traditional drinks. Some of these drinks are made from peanuts or purple corn. Peru has a very wide variety of exports and exhibitions each year from the country. They have excellent artisans who manufacture and design in minute portraits and weavings. They have fine carvings that are produced from Humana stones. The dressing of the natives is very colourful with a blend of their pre-hospice and European clothing. Their dressing varies according to the region. The country has been divided into regions. Each region has a unique mode of dressing that characterizes its locals. Peru has a variety of business opportunities just as other countries in the Latin America. There is a ready market for goods in the region. For prospective business entrepreneurs, it should be realized that the first correspondence should most probably be made via a letter done in Spanish. This is because their proficiency in English is lower and letters done in English will most likely be given a lower priority. An interpreter may be useful for people wishing to engage in business, the dressing mode in Peru is generally conservative hence a tie and suit for men and a skirt suit for women is generally acceptable. Corruption in Peru is on the decline and it should be noted that any person caught trying to bribe public officials will be convicted to a maximum jail sentence. Peru boasts of a population of about 23 million. This population is divided between the coast and highland regions; the coastal population is composed of poor farmers. In the river valleys there is a wealthier and more cosmopolitan culture. Some of the holidays in the country include the carnival, fiesta delacruz, inti-raymi and inmaculada Concepcion. Summary Research has clearly proven that the Latin America is increasingly becoming an attractive business destination for many multi-national companies ( De Soto 5). One trend noticed in almost all the Latin America countries in that they prefer doing business on face to face terms than on discussions over the telephone. The region has a good policy in protecting investors and has eased the steps required in one to register a new business. The Latin America countries share similar characteristics in their culture. The composition of their population is mostly of mixed races which make them blend well thus increasing the market for goods. This mixed population is also key for business as it expands the customer`s base. The region has also been seen to produce scholars who have written books that have truly helped to redefine the region better. Hernando De Soto was a Peruvian economist. He is recognized for his work in informal economy and property rights. Works Cited De Soto, Hernando. The Mystery of Capital. New York: Basic Books, 2000. Print Read More