PEST-C aspects of Italy - Assignment Example

Italy Country Profile 1. Introduction Italy is a nation that sustains the beauty of its environment and preserves the traditional aspects of life. The president of the Council Ministers Silvio Berlusconi himself delineates that “Italy is the country of sky, sun, and sea . . . Italy is a magic. Explore it” (“Beautiful Italy,” n.d.). With this notion, it can be perceived that Italy must be a paragon of a paradise in the contemporary perspective. The concept of this paper has been created as to depict the PEST-C aspects of the country, including the Hofstede's perspectives of analyzing the culture of Italy as compared to Canada, and depicting the feasible business venture in the country. Lastly, a conclusive remark will be inscribed. 2. PEST-C Aspects Political/Legal. When it comes to dealing with weak pecuniary locus of the country, Italy has announced to cut its budget amounting to €26bn from the period span 2012-14. In accordance with the Transparency International’s Corruption Perception Index 2011, the country is placed at 69th among 183 nations (“Italy Country Profile,” 2012, p. 4). In the context of European Union, Italy is deemed as having the highest aggregate tax rate. In accordance with Paying Taxes 2012, the nation’s aggregate tax rate was 68.5%, which is notably above the average of EU of 43.4%. Such taxes may comprise of profit and labor impositions. Dismally, the nation’s aggregate piracy rate is 49% that has eventuated to procure detrimental losses of €1.87bn; such piracy issues are associated to business and entertainment softwares (“Italy Country Profile,” 2012, p. 5). However, the Senate has strengthened the legal structure to instill live competition in the country (“Country Intelligence: Italy,” 2012, p. 31). The information was the outcome of BSA’s Global Software Piracy Study that was conducted last 2010 (“Italy Country Profile,” 2012, p. 5). Economic. The notion of financial turmoil is a very significant factor in analyzing the economy of a country. In the case of Italy, it has become vulnerable to the financial turmoil because of its detrimental operations. The banking system of the country has experienced a pace of difficulty because the lending institutions of the country are tainted with sovereign debts. Furthermore, non-performing loans, such as substandard, restructured, bad, and past-due loans. In accordance with the International Monetary Fund, these loans have incremented to 11% in 2011 from about 6% in 2008. The debt turmoil has become the triggering factor for organizations to be exposed to short-term debts, which are dependent to the lending institutions. Otherwise stated, organizations are doomed to fail because of the potential risks of high interest rates and be liquidated. The worst case is that forty percent of these organizations are exposed to interest rates that are payable within a period of less than twelve months (“Italy Country Profile,” 2012, pp. 4-5). Social/Cultural. It is significant to consider the demographic profile of a country when it comes to depicting the generality of its social aspects. Therein, cultural aspects will be delved as well in the light of fathoming the demographic facets. In accordance with the CIA World Factbook, the average life expectancy of Italy last 2012 was at 81.86 years--comprising of men ages 79.24 years and women 84.63 years (“Italy Country Profile, 2012, p. 5). That record is notably one of the highest in the world. In the light of macroeconomics, the nation’s aggregate workforce is mitigating (“Country Intelligence: Italy,” 2012, p. 16) and such a situation will deem as detrimental. In fact, Italy’s unemployment rate was about 8.40% in 2011, which was considerably higher than that of the developed countries. This implicates that Italy’s work environment may be the cause of weakening social aspects that will lead to impact the economy of the country. As a matter of fact, Italy’s employment rate of 56.9% was lower compared to that of the EU average of 64.2% (“Italy Country Profile,” 2012, p. 5). Technological. Technological aspects are very significant in the country, and most especially to the industry where it can substantially develop and become the driver of economic. Technology is an aspect of change, modernization, and inclusively, innovation. Innovation is not without the efforts of individuals that spend time fathoming the contemporary setting, considering the needs and wants of the people. This development is solely accounted to the researchers who develop one notion into becoming a more succinct concept. In Italy, in accordance with the European Commission’s Innovation Union Competitiveness Report 2011, there were only 3.8 researchers in every 1,000 labor force in 2009. Notably, the EU depicts an average of 6.3 per 1,000 workforce. Furthermore, EU average on business disbursement of research and development is 1.25%; dismally, Italy’s R&D was only 0.64% of gross domestic product in 2009 (“Italy Country Profile,” 2012, p. 5). 3. Hofstede's Country Characteristics Hofstede has a five-dimension model that will depict the certain characteristics of a particular country. This model includes five nations: power distance, individualism, masculinity or femininity, uncertainty avoidance and long term orientation (“Definitions of Dimensions,” 2005). Power Distance Index (PDI). This dimension is defined as the scope wherein small sized entities or organizations of a certain nation believes that there is disparity in the distribution of power within the country. This notion focuses on the reality that every entity in the community is unequal or equal (“Definitions of Dimensions,” 2005). This expresses the behavior of the culture on these inequalities among the people living in the country (“Italy,” n.d.). Individualism (IDV). The significant concern addressed by this locus is the notch of interdependence a community sustains among its limbs. The country has to perform such conduct whether the society’s perception is defined as “I” or ”We” (“Italy,” n.d.). Individualist communities prefer to be alone in seeking their own selves. Moreover, collectivist pertain to those who prefer in clusters that take care of them just to bestow fidelity (“Definitions of Dimensions,” 2005). Masculinity (MAS) / Femininity (FEM). Achievement, control and power are the aspects associated with the country in the light of male dominance in this dimension (“Definitions of Dimensions,” 2005). Moreover, when femininity score subsides in this dimension, it depicts that caring for others and concentrating the quality of life is what the country values. Femininity community suggests that the quality of life is an emblem of triumph, and becoming famous is not desirable (“Italy,” n.d.). Uncertainty Avoidance Index (UAI). This dimension focuses on the uncertainty issues that may impede the country in its future operations. A high score in this locus signifies that the nation is highly concerned for uncertainty and ambiguity. This results of implementing state laws, rules, regulations, and administrative aspects to mitigate uncertainty. However, a low score of this dimension dictates that the nation is less concern for uncertainty and ambiguity, resulting in a community of less rule-oriented (“Definitions of Dimensions,” 2005). Long-term Orientation (LTO). This type of dimension concentrates on the perception of the society, especially in their adherence to traditional, proactive values (“Definitions of Dimensions,” 2005). Further, the community focuses on the aspect of value, wherein they prefer to perceive things in such a futuristic view rather than the conventional perspective (“Italy,” n.d.). A high score for this dimension will indicate that the community values tradition while a low score will suggest the rapid occurrence of alteration because the society does not embrace long term traditional adjustment (“Definitions of Dimensions,” 2005). 4. Italy vs. Canada Italy’s PDi is at 50, which means that the issue of inequalities is widely accepted. Age is, as well, a significant symbol of power as the nation’s most powerful people are ages 75-85 years. Italy is deemed as having an individualistic culture at the score of 76, where places are paradigms of seclusion, and people can really feel alone. Italy is a masculine society at the score of 70, which pertains to leveraging aspect of triumphs. At 75, Italy values uncertainties and ambiguities. The right mixture of masculinity and high score of uncertainties has created barriers to easy life and people have become stressful. At the score of 34, Italy enjoys concentrating on the short-term culture of the nation (“Italy,” n.d.). Figure 1. Italy vs. Canada (“Italy,” n.d.) Moreover, Italy’s PDI, as compared to Canada, is higher. The latter has only 39 PDI, which suggests that the nation perceives that parity of social status must be upheld in the country. Similarly, Canada is an individualistic nation, with 80 that is deemed as its highest dimension score. Further, Canada is a moderately masculine community, where Canadians prefer to have a work-life balance, but notably, life in its entirely. At the score of 48, Canada is reluctant to the uncertainties. The country’s culture is passive, not rules-driven, and non sentimental. At the score of 23, notably smaller than Italy’s LTO, Canada concentrates on its short-term oriented goals (“Canada,” n.d.). 5. Business Venture Italy, as viewed at its four corners, is a right locus for the tourism industry. Italy is rich in culture, tradition and classical. People living in the country value the historical panorama of the nation, having Italy as a nation full of art and beauty. The best venture to be made in Italy should be inculcated with historical events, involving traditional and classical perspectives, such as preserving the historical sites of the country and be open to the public for business purposes. One of the manifold best approaches in the act of promoting tourism is through environmental preservation. The state should promote tourism--attract foreign and local investors to invest on depriving contemporary aspects, or may be having one that is inculcated with traditional setting to preserve the beauty of the country. To develop these sites can attract more and more patrons from divergent parts of the world. As such, tourism will continue to grow making it the top driver of the country’s economy. As of now, tourism is the key driver of Italy’s economy (“Beautiful Italy,” n.d.); thus, organizations should concentrate on business ventures that involve preserving the natural beauty and tendency of the country. 6. Conclusion Italy’s status quo does not depict contingent doom of economic progress; albeit, in view of macroeconomic setting, Italy is still far riskier than many developed nations. Italy’s unemployment rate is leveraging but to describe too soon that Italy will fail is unfounded. Italy’s PEST-C analysis is incremental, except for economic aspects. However, in the light of Hofstede's judgment, Italy’s culture is far better than Canada. The former depicts that Italy is a nation that pays respect to traditional aspects, but is very dependent to short-term goals. Having such notion, Italy is best projected to excel in the tourism industry, supported with strong legal aspects and strong projection of uncertainties. References Beautiful Italy. (n.d.). In Global Village Encyclopedia online encyclopedia 2013. Retrieved from http://www.gvpedia.com/Italy/Top-Tourism-Companies.aspx Canada. (n.d.).Retrieved from http://geert-hofstede.com/canada.html Country intelligence: Italy. (2012). Italy Country Profile, 1-33. Definitions of dimensions in Geert Hofstede 5D model of culture. (2005). Retrieved from http://stanford-online.stanford.edu/apm06lcr1w/docs/Hofstede5DModelOfCulture. df Italy. (n.d.). Retrieved from http://geert-hofstede.com/italy.html Italy country profile. (2012). Italy Country Profile, 1-75. Read More