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The Culture & Political Environment of International Business

Par   •  23 Septembre 2018  •  1 711 Mots (7 Pages)  •  473 Vues

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* No common currency (Euro/Peso)

* Not the same political kind of party

* Different legal system

* Corruption perception score for France is 69, for Colombia it’s 37

* Huge distance between the countries without land borders but geographic distances ar shortening due to the technology and cost improvements

* France is 643 801 km² while Colombia is 1 141 748 km²

* Time zone for France : UTC+1h and time zone for Colombia : UTC-5h

* Climate zone for France : Continental and for Colombia : Equatorial

* In Colombia, there is a huge income gap between the social classes

* In france the unemployment is high in comparison to Colombia

* Lots of foreign companies invest in Colombia

* Since the country is much safer than before, the GDP grow rate is quite high

* Lower labor cost in Colombia than in France

Internal Distance

* Opened economy (Fr & Col)

* High criminality (Col) and national security issues (Fr)

* Peso is much more weaker than Euro.

* Growing middle class

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b) Hofstede analysis

Capture d’écran 2017-01-31 à 03.26.12.png

Power distance

Both Colombia and France have a quiet high score (67 for Colombia and 68 for France). Nevertheless, in France this power distance starts since childhood with the way parents raise their children, how the relationship with their teachers at school are, and then how superiors in companies have more advantages than the average employee. In Colombia, the power distance have always been part of the citizen’s lifes, in fact, the inequality of income create a gape between the poor and the rich that put the ones that don’t have money at a lower place than the healthy people.

Individualism

On this point, France and Colombia are opposite. France, with a high score is an individualist society, in which you will always try to put yourself in the first place regardless of the other people. On the contrary, Colombians tend to be more collectivists, they give a huge importance to belonging to a group, most often depending on the social class. Most of Colombians want to be part of high society groups, since it gives lots of professional and social advantages. For my project, this could be interesting. In fact, in Colombia, condos have rankings so I would plan on focusing on the high rated ones, and on the “higher middle class” that is emerging in the country that would want to be part of a higher social class.

Masculinity

With a score of 64, Colombians are competitors, even though their collectivists there is a need to be seen as the elite by all the other social classes or groups. It is important to show off and again, if you want to show your success, you will need to get a nice apartment in a nice condo ! In France, the less you show, with the best quality of life, the more you will be respected. In Colombia, classes differences are much more obvious than in France.

Uncertainty avoidance

The score is high for both countries. 80 for Colombia where even if people are very expressive, it is combined with the power distance which means that the ones making decisions are the power holders, that try to avoid ambiguity in tasks or information. For France the score is even higher, French don’t like surprises, they’re into planning everything, and they will follow the rules but also take advantage of the benefits (example : Strikes).

Long term orientation

Colombia, with a low score of 13 are very normative people. With a very strong traditional background, they need quick results. France, with a score of 63 it means that french people want to invest, and save money in order to adapt to any kind of situation that would come in the future.

Indulgence

With a score of 48, France population are not very relaxed, happy and won’t enjoy the things in life as often as they should. It might be because of the weather, or some kind of cultural habit that make them complain about everything. Colombia’s high score of 83 means the people can enjoy lots of small things in life people from France won’t even notice but it also means they are more impulsive, and want to fulfill their desires. Life is not about working, but it’s about leisure, quality time and optimism. This is also a good point, real estate bets a lot on impulsivity and optimism.

With all these information, we can say that the major barriers for the project are cultural, because of the language it could be a problem to communicate and explain the service to the potential clients. Working with a cross-cultural is a real advantage, but can easily become a barrier too since not all the countries have the same “work culture”. The criminality in colombia can be a barrier too that can turn the potential investors down.

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Conclusion

The main objective of this study was to understand the differences between the two countries I chose in order to pick the cultural barriers that might affect our project. Colombia has bilateral agreements with Europe, and also did some research about the real estate market in Colombia and found a study made by Deloitte cabinet which shows that the economic situation is favorable to real estate investments and that the Colombian people

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