Cultural and Political Aspects of the US and Canada - Research Paper Example

The Political and Cultural Aspects of the US and Canada and Risk to Business

While assessing the risk of doing business in any nation, it is always needful to consider the cultural and political aspects and the way they compare with mother countries. For this case, there is a comparison of these two aspects in relation to the US and Canada. After such a comparison, this work will also proceed to assess the risks associated with them for investors in the US that would like to start businesses in Canada.

The Political Environments of the Two Nations Compared

Among the most significant differences in the political systems of the two nations is their heads of state and the governments. While the US is a republic (Clark, n.d), Canada is a constitutional monarchy (Gov.uk, 2016). The head of government of the US is the president (currently Barrack Obama) (Clark, n.d). On the contrary, the head of head of state of Canada is a British Monarch (Queen Elizabeth II) (Gov.uk, 2016). There is a need to note that in Canada, a governor general represents the queen (Gov.uk, 2016). There is a division amid the State and government’s head in Canada. While the head of state is only a representative of the Queen, the Prime Minister is the government’s head (currently Justin Trudeau) (Gov.uk, 2016). In Canada, the head of government is appointed by the head of state, who also has the ability of restraining the powers of the Prime Minister (Gov.uk, 2016). Therefore, while in the US the head of state is also the head of government, in Canada, there are distinctions. The president of the US is always elected to office on a four-year basis through national voting and not on appointment as in Canada (Clark, n.d).

In the US, there is the Congress, which is similar in functions with the parliament of Canada (Clark, n.d). However, there is a variation in the operation of the two institutions. Specifically, the congress has two organs: the House of Representatives and the Senate (Clark, n.d). Members that make up the Senate are usually elected on a six-year basis while those in the House of Representatives are elected after every two years (Clark, n.d). In Canada, there is also a dual division of the parliament into the House of Commons and the Senate (Gov.uk, 2016). It should be noted, however, that only members of the House of Commons undergo public elections (Gov.uk, 2016). The elected members in the Canadian parliament are always in office for a term of five years or until there is dissolution of the parliament (Gov.uk, 2016). However, the senate is made up of members appointed by the governor general and is always in office until they resign or after attainment of the mandatory age of retirement of 75 years (Gov.uk, 2016; Clark, n.d).

Like the president of the US, the Prime Minister of Canada is the head of government. Customarily, though opposed to the requirements of the constitution, the Prime Minister is an official that is elected (Forsey, 2016). The governor general appoints the Prime Minister and usually, they are leaders of political parties with the most representation in the House of Commons (Forsey, 2016). There is no limitation to the term of the Prime Minister and they could be in office up to the time when the party of the majority will change (Forsey, 2016). Contrarily, the President in America is in office for four years after which there are national elections. Additionally, a president is limited to only two terms of office and considerations are not made to the political party of the majority (Forsey, 2016).

Another notable aspect is that of division of power. Essentially, the governments of the two nations are not founded on similar principles. While the US is founded on division, the Canadian government is founded on consolidation of power (Clark, n.d). The US has three different arms of government that have equal authority, which makes no organ more influential on the others (Clark, n.d). However, in Canada, the Prime Minister is chiefly responsible for the decisions made regarding governance (Clark, n.d). For example, he can influence the actions of the rest of the parliament and the rest of the government unlike in America where decisions are consulted (Clark, n.d). The governments of the two nations also have different levels of control on their economies. For example, the US government controls 76.2% (Global Edge, n.d) while that of Canada controls 79.1% (Global Edge, n.d)

The Cultural Environments of the Two Nations Compared

Consideration is made for four aspects of culture of the US and Canada in relation to business; communications, the styles of management, dress codes and meetings. Foremost, there is a similarity relating to meeting business partners on an initial contact. For both nations, a handshake, and not a hug is acceptable. People are also addressed as either Mr. or Ms, which is then succeeded by last names (Newman, 2016). There are cases when the people being addressed will invite the addressers to call them by their first names. However, these similarities in communication stop after the initial contact. While Americans will always be direct because they consider tactfulness as time wastage, the Canadians will always take subtle approaches (Newman, 2016).

In relation to meetings, the variations in the styles of communication make the business meetings of the two nations different. Americans have a more egalitarian approach (Newman, 2016). Each person is encouraged to speak their mind and even disagree to opinions. From this case, passionate confrontations are not the style of Canadians. The confrontations, however, are not founded in animosity, but in the business culture. On the other hand, Canadian business meetings are conducted in more reserved approaches (Newman, 2016). There is a discouragement to expansive gestures. The meetings additionally target consensus and harmony while disagreements are respectful. Interruptions are considered rude because people take turns speaking.

There is a preference for general information approach of management in Canada (Newman, 2016). The building of consensus is always a priority, which forces managers in Canada to consult all involved parties. Such an approach is a guard against resentment and authoritarianism. There is also a value on decisiveness as opposed to flip-flopping. The style of management in the US is mostly individualistic (Newman, 2016). They account for the decisions made by managers. There is a general assumption that consensus could dissolve as the decisions become less fruitful. However, there are elements of confrontation and resentment if the junior workers feel less involved in decisions.

As much as the dress code for both nations is same for business, there are variations related to the corporate cultures of each company, the industries and the locations. For example, in Canada, rural-based companies are more informal in dress code. In addition, industries of the US that are more progressive like technology have a tendency for dress codes that are more relaxed (Newman, 2016).

Visual of the Differences

Aspect

The US

Canada

Political

Type of government

Head of state

Head of government

Principle of power

Level of government control on business

Democratic Republic

The President

The President

Division of power

76.2%

constitutional monarchy

British Monarch (Queen Elizabeth II) represented by Governor general

The Prime Minister

Consolidation of power

79.1%

Cultural

Meetings

Dress code

Style of management

more egalitarian approach

More progressing industries have more relaxed dress codes

mostly individualistic

conducted in more reserved approaches

Companies based in the rural areas are less formal in dressing

Preference for information approach with more consultation

Communications

More direct

More tactful

Risks to Business Related To Culture and Political Aspects of Canada

The Political Factors

Two main political parties define the political environment in Canada: the Democrats and the Liberals. As noted, the prime minister of the nation is habitually a leader of the majority party in the House of Commons. Additionally, the Prime Minister could be changed as soon as there is a shift in party leadership. However, as reported, there are signs of a weak governance, which stems from the fact that that political parties only function with interim leaders (Ljunggren, 2012). Because there is a greater control of business by the government in Canada than the US, there is a need for stronger governance to spearhead the growth of the economy.

Another risk related to the political aspect is that of the government interfering with policies of foreign investment. Because of a little higher level of government control on business, Americans that want to establish their businesses in Canada could meet with tougher tax policies, which could still be subject to further tightening. It is reported that the economy of Canada is largely reliant on export trade with the US (Ljunggren, 2012). From this perspective, the state of the economy could be affected by poor political relationships between the two states. In this extreme happening, the government in Canada could resort to tighter regulation on business, which could be a directive of the prime minister without with little consultation.

Another risk is if the political ground remain fairly stable and the majority political party‘s strong policies may remain unchanged for long. The reason is that the government is largely pushed to serve the interests of the political parties as opposed to the US. In this case, poor policies on business could last for long.

The Cultural Factors

The largest risk to business in this dimension is that of the style of management. While studies indicate that Canadian managers are less direct in their approach to issues, those in USA are more direct. Therefore, a business manager may find it difficult to manage their team of workers. In addition, the confronting aspect for consensus of the US managers could also be an addition cause to management wrangles. The approach to management picked by Canadians could mean that there is bureaucracy in leadership, which slows down the process of decision-making.