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Running Head: CROSS- CULTURAL MANAGEMENT Cross- Cultural Management [Name of the Writer] [Name of the Institution]

Ikea Cross Culture

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IKEA AssignmentMarketing design and innovation is the most applicable course when referring to the latest market trend all around the world .everything is changing, as globalization is slowly consuming everything and consumption trend is speedily changing. As the information is exchanging on a daily basis there is more competition in the markets .As competition is more so is the profit. Consumers want more variety and quality products so day to day technology and other improvements are being done to offer them quality products according to their interest n needs.Learning from the ModuleConsumer interest is the most important thing so those companies focusing on consumer needs and interests are more profitable in order to stay alive cell phone companies had to keep up innovating, this was learned during this assignment. As until now the big cell phone companies are serving due to the latest technology they are innovating, for eg. Samsung & apple.Previously Nokia lacked due to not coping up with technology which now it has been able to do and have succeeded in research and development unlike previously where all of its costs was spend on being socially responsible towards the environment .Moreover innovation is not just focusing on innovation on the consumer product level but with businesses dealing in industrial products like Corning which mingles with its business partners to develop new products and improve itself.Innovation- a Pertinent ToolWhen studying this particular course one can really understand that innovation is not only coming up with new products, there is a lot more which has to be learnt. Innovation can also be used in our business processes, advertising products, and motivating consumers to be convinced.. This course was challenging as it gave an opportunity to think of examples of Nokia and Samsung which are one of the largest companies. The challenge was seen in communication, commoditization, consumerism and patents when we studies these concepts under innovation and marketing design. Innovation: Deep Analysis There was a new approach discovered when we learned these concepts. It was learned that communication plays as a very important role when designing new innovative products. An error in this during the day would halt the normal processes and lead to problems in prototype and delays in product release .this is not good for a fast changing market as all efforts ,money go to waste if competitor acts up fasts than you .we can relate this to a collage assigned assignment in which if failure of communication being passed on properly is not taken care then everyone in different teams will work differently according to their limited information and risk of same work being done twice .The concept of consumerism also tells a person to think what had happened in the past instead of realizing it has a name .Having a coffee cup leads to having another one and the when one becomes addicted to it becomes as a necessary part of his life. Our lifestyle is made is this way that we have this unnecessary and unneeded expense added in our lifestyle. After learning one becomes aware of this and becomes conscious when buying products ,trying to be free of this cooperate advertising ,gaining the power to say no when these cooperation’s try to get them .When learning importance of patenting we know things which seem easy to make or duplicate can’t be done this easily .companies spending so much money in order to protect the customers from paying excess money .companies should continue researching on this to make it easier to protect like apple has done to its I tunes giving its consumers easy access with affordable music.ConclusionLastly in closing remarks, I will say that I have learned various applications and practicalities which an organization deals with in their normal life. I understood that in order to win the customer satisfaction and the target market it’s highly imperative to un

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Cross-Cultural Management 10

Running Head: CROSS- CULTURAL MANAGEMENT

Cross- Cultural Management

[Name of the Writer]

[Name of the Institution]

Summary

The paper describes in detail the cross-cultural management issues when company seek to expand their business beyond the UK. In this report we have chosen, IKEA furniture manufacturing company starting their business in Nigeria. The purpose of this report is intending to understand how the diverse culture impacts on the operation of the company in the global business. Meanwhile, it is also aiming to come up with an effective solution of dealing with the cultural differences for managing the cross national activities. As HR Director, it is important to determine about the national culture and what is its impact on the way of doing business. In the most general sense of national culture can be defined as a system of norms and values of life of a people or ethnic group. As companys focus is on business initiatives that drive real value for our customers, including adapting proven technologies and developing capabilities critical to future success. IKEAs ability to succeed in the global marketplace requires a skilled, well-trained and dedicated workforce; a stable fiscal, tax, and regulatory environment; and the ability to export our products to Nigeria. IKEAs strengths are their efficient manufacturing process and low price strategy, and their weaknesses lie with their branding strategy. Right strategy can do well to their business as there are countless opportunities available. Thus, from analyzing the theories presented by Holfstede and Hall, one can say that they were able to more clearly study the similarities and differences. Their theories has analyzed in depth the various challenges faced by the companies due to different multicultural employees, apart from the issues coming in an organization as well.Cross-Cultural Management Introduction

IKEA is the world's most triumphant global enterprise. According to the statistics, in 2007, IKEA had established around 300 home decorating retail stores in 35 countries. It has been visited by around 583 million customers. IKEA's inexpensive, smartly designed products, exhibited in huge depot stores, made sales of 21.2 billion only in the year 2008 compared to 4.4 billion in the year 1994. Although IKEA has refused to issue statistics of its profitability, the net profit margins of IKEA were believed to be around 10% higher than an average retailer. Ingvar Kamprad, the founder of IKEA, is believed to be one of the richest men in the world.

IKEA was founded in 1943 in Sweden by Kamprad when he was only 17 years old. The young organization sold Christmas magazines, fish, and seeds of his family ranch. His primary business was trading matches (Boniface, 2002, 12-23).

Research Aims and ObjectivesThe purpose of this report is intending to understand how the diverse culture impacts on the operation of the company in the global business. Meanwhile, it is also aiming to come up with an effective solution of dealing with the cultural differences for managing the cross national activities.

The research leads to focus on studying the effectiveness of providing strong service focus, thus as an HR director of the company, my major responsibility falls towards expanding the business efficiently in Nigeria, Brazil, India, China. In the light of this aim, the study will accomplish the following objectives:

To highlight the challenges faced by the company

To determine the strategy of IKEA Company to choose such strategy that meets the national requirements of in Nigeria, Brazil, India, China. To understand the role of Human Resources in the recruitment and selection process by IKEA

Discussion and Analysis

The company is operating in around 41 countries, and the IKEA is globally destination store for home furniture, home accessories, kitchen, ready to assemble furniture product. It is one of the worlds largest furniture retailers with more than 301 stores. The largest market for the company is Germany with 44 stores. Now the company wants to expand internationally, and for this they are ready to develop certain strategies to meet up their requirement.

Our Vision and Business Idea

The IKEA vision is to improve the lives of many. Our business idea is in line with our vision to offer a wide range of aesthetic and functional furnishings at affordable prices to the greatest number.

The Concept and Creation of a National Culture

As HR Director, it is important to determine about the national culture and what is its impact on the way of doing business. In the most general sense of national culture can be defined as a system of norms and values of life of a people or ethnic group. At the turn of the century can say fairly stable cultural patterns prevailing in the national states and, on a larger scale, in some regions of the planet (Heather & Sarah, 2010, pp 67-89).Marketing Strategy before Entering In To the Market

IKEAs product ranges from various industries, which are based, on reliability and low cost. It has furnishing solutions for everyone from creative to business minds. IKEAs products are outdoor furniture, eating tables, Desks, Mirrors, childrens IKEA, cooking, Bathroom storage, Beds & mattresses, chairs, clothes storage, Decoration, flooring, Kitchen cabinets and appliances, Lighting, small storage, sofas and armchairs, storage furniture, Tables, Textile and rugs, tools and fittings and TV and media furniture (Ishmael, 2005, pp 56).

Within the broad framework of strategic management the aspects of culture blended with ethics coverage of group meetings on assessment of networks as well as their results including the modality of improvement vis--vis competitors.Doing Business in Other Countries

Before entering into Asian market, the company needs to deeply analyze their trends and demand. As Research and development is one of the most important elements of any business. It also incurs much of the cost, but effective research and development can deliver positive results. Thus, as a HR Director of IKEA Company, my responsibility was to analyze the market situation in prevailing in Nigeria, India, China and Brazil. As a multinational company we need to expand our company globally and for that one must put emphasis on the laws and regulations of these countries (Baum & McGahanm, 2004, pp 34-67).

Business strategy is concerned with creating and nourishing a competitive edge for the products that are produced and services that are rendered. Business strategy deals with:

locating the business against competitors

predicting changes in technologies and demand

manipulating the competitive nature with the help of strategic actions.

Another business strategy used by IKEA is that when a rival introduces similar commodities into the market at a comparatively cheaper price, IKEA goes for a stripped-down and even cheaper policy to compete with its competitors (Capron, 1987).

Profile of India: see appendix Porters Diamond Model

Firm StrategyIndia is worlds largest technologically advanced nation therefore technology and innovation is highly recommended for international firm to operate in Indian market.

Demand ConditionsIndian customers have high demand for cheap electronics due to high rate of poverty and low wage rate in the country.

Related Supporting IndustriesInternational technological firms supply electronics material for the production of electronic items.

Factor ConditionsThe three main factors include skilled labor, capital and infrastructure. India is full of highly qualified and skilled labor which usually requires low investment on labor cost and infrastructure of electronic market is not really good compared to other countries.

Profile of Brazil: see appendix Porters Diamond Model

Firm Strategy Brazil is more dependent on its export because the country itself is not technology oriented. The major competitors are Chinese companies.

Demand ConditionsBrazilians have high demand and purchasing power therefore; the company can increase their sales in Brazilian market.

Related Supporting IndustriesMost of the electronic companies are international exporters therefore; the country has limited access to technological materials.

Factor ConditionsHighly qualified labor are costly in Brazil so most of the companies outsource their operations and infrastructure is relatively good as compared to India.

Profile of China: see appendixPorters Diamond Model

Firm Strategy Chinese are technology oriented people and has largest economy in the world. China has unlimited access to technology and has variety of technologies ranging from cheap to most expensive electronic products in the market.

Demand ConditionsChinese are high competitive and focused on innovative products. Customers have high demand and low purchasing power due to low income.

Related Supporting IndustriesChina has huge market for the local suppliers who support local companies to produce electronic items with cheap labor.

Factor ConditionsChina has poor quality labor and has large skilled labors that are focused on working hard for long hours. The most attractive factor is the infrastructure of the country and capital required for the investment is comparatively low than other countries due to cheap factors of production and low wage.

IKEA in Nigeria The reason why the company choosing Nigeria to be strong manufacturing focus is that Nigeria business culture places a great value on hierarchy. Nigeria businesses therefore follow a strict hierarchical structure, where decisions tend to be made at the top and communication is usually vertical. As an Hr director, I need to perceive the procedure and policies for excessively creating a greater impact o the business. Strong Manufacturing Focus

IKEA has an intricate corporate structure, which means the company is not likely to go public. IKEA has modern equipment and technology that enables the manufacture of high quality furniture for customers with large volumes. While most of the designs of IKEA products are made in Sweden, manufacturing has been outsourced to China and other Asian countries. As a manger it is the responsibility to manage change in organizations that often seems more complicated than their design, planning and quality control and the degree of benefit from their implementation. Changes in the company are accompanied by painful processes, which include adaptation by the personnel (Robert, 2007, pp 56-90). In many cases, this adaptation can successfully manage by reducing the degree of resistance to change, speeding up these processes and getting a better return on their implementation.Need of Human Capital

As our focus is on business initiatives that drive real value for our customers, including adapting proven technologies and developing capabilities critical to future success. IKEAs ability to succeed in the global marketplace requires a skilled, well-trained and dedicated workforce; a stable fiscal, tax, and regulatory environment; and the ability to export our products to Nigeria. IKEA and many other companies will do everything in our power to ensure that we can continue to be leaders in advanced manufacturing that helps states and communities thrive in furniture industry. We are aware of the fact that now people are getting more and more aware of interesting and appealing design. Also the design and making sides of the industry are getting increasingly professional and imaginative (Boniface, 2002, pp 12-23).Thus, one of the main intentions of any business society is to reach a position where it is able to invite more consumers than its challengers. To achieve such a modest benefit, Ikea is trying to identify their different competencies. The appearances of a company's operations purposes are vital in creative its choice of products and markets, and the basics of its competitive strength.

Theories Related To Cultural Issues and Challenges

Dimensions of Trompenaars

There are areas or cultural difference that may be the source of misunderstandings. This is particularly the case in relation to the contract. The Universalists, whose contracts are characterized by their completeness, consider the contract in effect as an indispensable element of the business relationship. The particularistic them attach more importance to personal contact and the relationship that formal contract (Cole, 2011, 90-123).

According to Trompenaars, in individualistic cultures, people often place the community after the individual as it is contrary in the communitarian culture. He believes that people in an efficient culture shows up three emotions and their feelings (Baum & McGahan, 2004, pp 34-67). It is often analyzed that Trompenaarss system basically appeared to be more focus oriented, and its investigation basically lies under the surface of investigation of the persons culture.

Geert Hofstede and His Theory of Cultural Dimensions

According to Hofstede (2001) culture is the software of mind or a collective programming of the mind that differentiates people from one group to another. Hofstede theory is based on the idea that value can be assigned to six cultural dimensions. This is power (equality against inequality), collectivism (versus individualism), uncertainty avoidance (tolerance against uncertainty), masculinity (versus femininity), temporal orientation and indulgence (vs. containment). Power distance index: According to Hofstede, power distance refers to the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally.

Individualism against collectivism: The degree to which individuals are integrated into groups." This dimension is of no political connotations; refers to the group rather than the individual. Cultures that are individualistic attach importance to the achievement of personal goals.

Index uncertainty avoidance: A society of tolerance for uncertainty and ambiguity. This is a dimension that measures how a society deals with unfamiliar situations, unexpected events and stress change.

Indulgence against containment: This dimension measures the ability of a culture to meet immediate needs and wants of its members.

Long-term orientation against short-term orientation: This dimension describes the horizon of a society. Cultures with a short-term orientation value the traditional methods, devote a considerable amount of time to develop relationships and generally consider time as a circular dimension (Heather & Sarah, 2010, pp 67-89).

Hall's Theory

The work of Hal basically led to cover the issues of cultural and hegemony studies. His point of view stets that people are producers and consumers for culture at the same time. As hall mentions that culture is something that simple study or appreciate.

It is a fact that Hofstede's cultural dimensions are merely a framework to help assess a particular culture and, thus, better targeting decisions. Other factors should be considered, such as personality, family history or personal wealth (Chung & Amber, 2009, pp 45-67). The proposed dimensions not predict individual behavior, nor take into account the personality of each. Thus one can often say that the Trompenaars, Hall and Hofstede cultural dimensions are more useful tool for various themes, within the organization and also for the structure of the company while trading with other countries (John, 2009, Pp 93128). Thus, those that are involved in working for international business are important to know regarding the difference between culture and countries.

Can IKEA sustain its success?

IKEA achievement in the retail commerce can be attributed to its huge expertise in the retail market, merchandise differentiation, and cost leadership. Over all IKEA is managing differentiation and cost leadership (Baum & McGahan, 2004). In addition, they are a cost foremost in periods of the cost of their goods are lower in evaluation to other retailers.

Conclusion

After analyzing every situation we come to a conclusion that risk of entry by a potential competitor and competition in the industry is low which a good thing for IKEA. Bargaining power of suppliers is low due to the history of making wood related products. Bargaining power of buyers is high because of the fact that real estate is considered as an investment.One can conclude by saying that in reality Hall and Holfstese were able to study the cultural differences Thus, analyzing from many countries, they were able to more clearly study the similarities and differences. From their theories, we can observe that there were many challenges because of different multicultural employees, apart from the issues coming in an organization as well. The individual differences is one thing that can affect the entire organization, as culture plays a strong and complicated role, it has also led to failures for many organizations, however the ability for managing the cross culture and balance should be kept with the company.Political and economic factors are in favor of starting this new trend of real estate business because the opportunity is wide open. Social factor is also in favor of investing in IKEAs prefabricated houses because of the changing trend in the general population. Technology has not done any good to real estate yet because the technological process used in real estate industry is more or less the same as it was hundred years ago. This is the first step of evolution of this industry (Ishmael, 2005, pp 56). IKEAs strengths are their efficient manufacturing process and low price strategy, and their weaknesses lie with their branding strategy. Right strategy can do well to their business as there are countless opportunities available. It is important to avail opportunity for entering into the hotel market and improve their market strategy to make a good brand name in the industry. Although the industry is irrational, however by using different ways of advertising and reaching out to target market can ensure a stand in the industry (Ishmael, 2005, pp 56). In the near future, IKEAs sound expansion in the retail business emerges as the focal point of the organization, with strategies not likely to incorporate aggressive expansion into new markets, but would consider structuring and nurturing in the existing market (Boniface, 2002, 12-23). Yet, certain alterations may be possible with the introduction of information technology, which in the foreseeable future, will have unfavorable effects on the revenues of some IKEA warehouses, but will lead to the positive effects on revenue for the company as a whole. Therefore, this is the main illustration of the way in which IKEA is trying to align itself in order to face the potential threat to its conventional store (Brookhart, 2008, pp 45-67). Buyers may prefer shopping online, as IKEA has established its reputation for quality and craftsmanship in its goods, contrasting to the current principle of IKEA that quality of products should be felt by the buyers before the purchase.

References

Baum, J. & McGahan, A. (2004), Business Strategy over the Industry Lifecycle, JAI Press, Oxford, pp 34-67

Boniface, Ahunwan, (2002), Corporate Governance in Nigeria. Journal of Business Ethics, pp 12-23

Brookhart, Susan M. (2008)."Portfolio Assessment." , 21st Century Education: A Reference Handbook. SAGE Publications, pp 45-67

Byars, L. (1991) Strategic Management, Formulation and Implementation Concepts and Cases, New York: HarperCollins, pp 12-45

Capron, N. and Glazer, R. (1987), Marketing and technology: a strategic co alignment, Journal of Marketing, Vol. 51 Issue 3, pp.10-21.

Chung A. & Amber L. (2009), Establishing Organizational Ethical Climates: How Do Managerial Practices Work? Journal of Business Ethics, pp 45-67

Cole, G A. and Kelly, P, (2011), 'Management Theory and Practice', Ed. 7 Cengage EMEA, Pp 90-123

Heather S. & Sarah J. Freeman, (2010), Corporate Social Performance and Attractiveness as an Employer to Different Job Seeking Populations, Journal of Business Ethics, pp 67-89

Ishmael P. (2005). Differences in Research Ethics Judgments between Male and Female Marketing Professionals, Journal of Business Ethics, pp 56

James A. & David C, (1999), Ethical Work Climate Dimensions in a Not-for-Profit Organization: An Empirical Study, pp 112-145

John. Barlto, (2009), Business Ethics: A manual for managing a responsible business enterprise in emerging market economies, Pp 93128

Judith A, (2009), Dignity in the Workplace Can Work Be Delineated? Journal of Business Ethics

Koehn, D. (2008), Ethical Issues in Human Resources, In N. E. Bowie (Ed.), The Blackwell guide to business ethics, Oxford: Blackwell ISBN 0-631-22123-9, pp 225243Pinnington, A. H. and Lafferty, G, (2002), Human Resource Management, Melbourne: Oxford University Press ISBN 0-19-551477-7, pp 223-245

Robert C. Solomon, (2007), Ethics and Excellence: Cooperation and Integrity In Business, ISBN Number: 0195087119, pp 56-90

AppendixProfile of India

PESTELEuro money Country RiskEconomic Rating & Currency ExchangeCultural Aspects Hofstede ONDDEntry Strategies

Political

The political relationship of Japan with India has always been strong and friendly since Indias independence.

There are many Japanese companies including Honda, Sony and other big companies, have manufacturing facilities in India. With the steady growth of Indian economy, India has become an opportunity for many Japanese firms.

During the year 2006, the Indian Prime Minister signed an agreement called Joint Statement Towards Japan-India Strategic and Global Partnership. Other than that, Japan has funded and finances the infrastructure projects in India and the year 2007 has been the time of India-Japan Friendship Year.

Economic

According to CIA Factbook, the GDP (Purchasing Power Parity) of India during the year 2011 was $4.421 trillion.

Now a day, Indias economy is booming up and people are getting more opportunities in Indian market and now, it is one of the leading economies of the world.

The concept of globalization took place in 1990, which let many multinational corporations to invest in the country and thus, made it as world outsourcing center.

Social

Indians grow up in such a system where family relations and belongings are the top priority.

They take management system lightly and ignore the work pressure and management practices and thus, managers must give them job fear in order to make them serious about their work and working environment and it would be easier for managers to control them effectively.

Technological

New technologies produce new products and innovative processes.

Technological advances in India particularly upgrading different technology based products such as MP3 players, computer games, LCD TVs and mobile phones are increasingly growing in electronic market.

Technology reduces costs, enhance quality and make the product more innovative and attractive to end consumers.

Environmental

Environmental factors include weather conditions and climate of the country. Changes in climate have major effect on the performance of technological companies and farming activities.

With growing issues of global warming and greater environmental changes, international companies need to consider this external factor in order to perform more effectively in the market.

India is considered as highly polluted country and has many issues concerning the industrial and transportation pollution that may harm human health and his surroundings.

Legal

Legal requirement in India including the policies and legislation passed by the state government including licensing agreement and Trade mark act, equal employment opportunity etc.

In India, international firms are needed to operate according to the legal acts and legislation of the government. ECR of India in the year 2011 is 58.6 and is ranked 52nd state among 186 countries in the world.

It has been estimated that the year 2012, Indias ECR has been decreased to 52.95. Exchange rate: 46.67

Debt: $287.5 billion

Unemployment Rate: 10.5%

Credit Rating: BBB- Negative

Ease of Doing Business: 132

Starting a business: 173

Getting credit: 23

Protecting Investors: 49

Trading Across Borders: 127

Enforcing Contracts: 184

Paying Taxes: 152

(http://www.doingbusiness.org)Power DistanceIndia has achieved 77, the highest score in this dimension revealing that people encourage the hierarchy structure of organization.

Employees are highly dependent on the higher authority or manager for direction, guidance and supervision of work.

Individualism

With the score of 48, indicating that Indians are more collectivist and strive to have social bonds with coworkers and managers in the workplace environment.

Indians grow up in such a system where family relations and belongings are the top priority.

They take management system lightly and ignore the work pressure and management practices and thus, managers must give them job fear in order to make them serious about their work and working environment and it would be easier for managers to control them effectively.

They must also conduct training programs, family welfare schemes in order to get their attention towards their value in the organization. This would make them realize that they are committed to the company and thus, improve their productivity.

Usually, Indian companies focused more on people friendly management to increase the level of motivation.

Masculinity /Feminity

India has achieved 56 score on this dimension which shows that it is a masculine society with male dominated family structure.

It is considered as masculine in terms of power and success of men over women.

Uncertainty Avoidance

India got 40 scores on this aspect of culture and hence, represents that it has medium low preference for uncertainty avoidance.

Imperfection is acceptable for Indians as they believe that nothing is perfect. They accept change and complex situations.

Long term orientation

The score of 61 on this dimension shows that India has pragmatic culture.

The most dominated concept of Karma dominates Hinduism religion and it is considered as a philosophical thought.

According to them, time is infinite and practiced this concept in their daily lives (http://geert-hofstede.com).Export Transaction

Political Risk

Short term- 2

Medium/long terms- 3

Special transaction- 2

Commercial Risk: B

Direct Investments

War risk- 3

Risk of expropriation and government action- 3

Transfer risk- 3

(http://www.ondd.be)Franchising

Strategic alliance

Licensing Agreement

Joint Venture

Wholly Owned Subsidiary

Profile of Brazil

PESTELEuromoney Country RiskEconomic Rating & Currency ExchangeCultural Aspects Hofstede ONDDEntry Strategies

Political

Brazil is politically stable country.

The main focus of the government is to improve the economic conditions of the country.

The government has established strict rules and policies regarding controlling the inflation rate in the state.

Economic

Brazils economy is one of the largest economies among South American countries.

The country is running towards global markets and achieved tremendous success in globalization. Since 2003, Brazilian government has tried to improve the macroeconomic stability by creating foreign reserves and reducing its debt.

Recently Brazil has faced two quarters of recession in terms of reduction in the demand for commodity based exports and external credit has gone up.

However, Brazil is considered as the fastest growing economy steadily recovered the phase of recession.

Social

Brazilian culture is difficult to define because it is a melting pot of different racial influences.

People with European, Asian, African and Middle Eastern background provide an enrichment of the Brazilian culture without taking the influences of the first inhabitants of Brazil, the Indians, to smooth out.

Brazilians are proud of their festivals and events such as Carnival and festivals in the Southern states of Brazil. Countries nationalities and cultural influences contribute to the diversity of Brazilian culture and social life.

Technological

Recently, Brazilian market has implemented many changes in its technologies and innovations.

Government is trying to improve the living standard of people and making it more developed nation in terms of technology.

Also, the government is highly focused on spending heavy investments in technology sector for the military field.

Environmental

Environmental factors have exceptional significance when it comes to the business performance of the company because the state in which a branch of the company is located will decide the companys ability to sustain in the environment, regardless of the governmental actions.

The company should operate in a manner that it must comply with the laws of each state, not deviating from the rules.

Legal

In todays corporate world, every company has to maintain its legal and ethical requirements.

If, it does not fulfill the requirements then the company is questionable for its ethical concerns.

The company is then accountable to the state and the public affected by its actions or policies. Brazilian government has not maintained their policies and laws on licensing and franchising which means that the country highly encourages foreign investments. ECR of Brazil is recorded as 63.22 in the year 2011 and is ranked as 41 among 186 countries.

It is estimated that during 2012, the ECR is recorded as 60.73.Exchange rate: 1.6728 USD

Debt: $382.5 billion

Unemployment Rate: 5.3%

Credit Rating: BBB Stable

Ease of Doing Business: 130

Starting a business: 121

Getting credit: 104

Protecting Investors: 82

Trading Across Borders: 123

Enforcing Contracts: 116

Paying Taxes: 156

(http://www.doingbusiness.org)Power Distance

With the score of 69, Brazilians believe in high power distance and encourage power and inequalities among people in the workplace.

The power holders have more benefits than the less powerful people in the society. Also, Brazilians tend to respect elders and status symbol.

Individualism

Brazil has achieved a score of 38 which shows that the people in the country are collective and family oriented.

They used to live with their extended families and respect relationships. This aspect is highly practiced in the workplace environment as well.

In the professional environment, the elders who are working in upper position are likely to hire their young nephew or niece for a job.

Masculinity / Femininity

Brazil scores 49 in this cultural dimension. As a matter of fact, Brazilian society is based on both masculine and feminine.

The culture of Brazil highly encourages gender equality, compromise and has sympathy for inferiors who are not achievers.

Conflicts are highly discouraged and avoided in both social and work environment.

Uncertainty Avoidance

Brazil scores high on this dimension. This shows that society needs to create proper rules and legal system in the country in order to make the proper structure of life.

The individuals in the state are obliged to strictly follow these rules and laws which are very weak among people especially youngsters in the society.

Safety is an important aspect which must be implemented in the country in order to make the environment safe from conflicts and violence.

Due to their high score on this dimension, Brazilians are passionate and expressive as their emotions are expressed and shown through their body language.

Long Term Orientation

The score of 65 has placed Brazil in the long term oriented society.

Like Asians, people in Brazil are followers and can believe more than one truth at one time.

They are highly flexible and understandable as they easily accept change in their life

(http://geert-hofstede.com).Export Transaction

Political Risk

Short term- 2

Medium/long terms- 3

Special transaction- 2

Commercial Risk: C

Direct Investments

War risk- 2

Risk of expropriation and government action- 3

Transfer risk- 3

(http://www.ondd.be)Joint ventures

Franchising

Direct Exporting

Profile of ChinaPESTELEuromoney Country RiskEconomic Rating & Currency ExchangeCultural Aspects Hofstede ONDDEntry Strategies

Political

China is considered as a communist society with economic power house.

The government is spending huge investments in product market and expansion throughout the country.

It is worlds largest economy and has highest population in the world.

Economic

Since 1970, China has been shifted from a closed system to the market oriented.

China is playing dominant role in international markets around the globe.

During the year 2010, it has become the worlds largest exporter.

The countrys interest rate is relatively high about 6.5% as compared to other developed western nations which are facing severe depression.

This interest rate encourages small business loan and low risk in repayment of loan.

Social

Lifestyle and trends keep changing the consumer attitudes towards the particular products and brands.

Since China highly encouraged its local investors and businesses to participate in the Chinese market, therefore, the exposure of consumers towards imported brands is slightly lower than other countries. People are family oriented and more into social gatherings within their relatives and family friends.

Due to low wage, people cannot afford expensive products and their purchasing power is relatively low than other countries.

Technological

Access to technology is the strength of Chinese companies operating in the technology sector.

The country is known for its advanced technology and electronics advancement and is the largest exporter of technology products in the world.

Since 1985, China has started expanding its production base and with the steady growth in investments, the production processes and capacity is technology based.

This way, Chinese companies are able to diversify their business in other related products.

EnvironmentalChina has a vast variety of forests and has good wildlife.

The climate and natural environment is highly affected by industries and factories with a waste material and products.

This also affected the wildlife and greenery of the country.

Due to technologically advanced nation, pollution is almost everywhere in the air which has affected human life as well.

Legal

The stability of China government is moderate and more stable because the administration has high control over the policies and laws of the country.

The government imposed strict laws against the publicity of Chinese products on internet and press.

However, these policies and laws are very effective in improving the economic conditions of the country.

During the year 2001, Chinese government joined World Trade Organization which has opened gates for foreign companies to invest in the Chinese market.

But still, some foreign companies are facing many problems in managing Chinese in the workplace and the diversity is low among them which lack the innovations and creative ideas. ECR of China is recorded as 63.55in the year 2011 and is ranked as 40 among 186 countries.

It is estimated that during 2012, the ECR is recorded as 59.64.Exchange rate: 6.4615 USD

Debt: US$1.66 trillion

Unemployment Rate: 6.5%

Credit Rating: A+ Stable

Ease of Doing Business: 91

Starting a business: 151

Getting credit: 70

Protecting Investors: 100

Trading Across Borders: 68

Enforcing Contracts: 19

Paying Taxes: 122

(http://www.doingbusiness.org)Power Distance

China has achieved 80 scores in this dimension which represents that inequalities among people is high acceptable in the workplace environment.

People who work under authority are highly influenced by the formal authority and are needed to supervise in every field work.

Individualism

China is highly collectivist society as its 20 scores shows that people are likely to work in a group or team.

Employees are not highly committed towards their work and organization whereas relationship with peers and coworkers are the great importance to Chinese.

In this way, social and personal relationships are more important over their job and company.

Masculinity / Femininity

At the score of 66, China is a masculine society and a male dominated culture.

Chinese are hard work but less innovative and they tend to sacrifice their family and leisure life for the sake of their family earning.

Uncertainty Avoidance

Chine scores 30 on this dimension which clearly shows low uncertainty avoidance.

Chinese are more comfortable and adjustable to complexity and their language is the most complex aspect of their culture which is difficult for others to understand.

They are more flexible and entrepreneurial than others.

Majority of Chinese companies are family based ranging from small to medium enterprises.

Long term orientation

The score of 118 shows that China is highly long term oriented society in which determination and firmness are common.

Relationships are recognized by its status. People are more likely to invest in long term business and are risk taker

(http://geert-hofstede.com).Export Transaction

Political Risk

Short term- 1

Medium/long terms- 2

Special transaction- 1

Commercial Risk: C

Direct Investments

War risk- 3

Risk of expropriation and government action- 4

Transfer risk- 2

(http://www.ondd.be)Licensing

Indirect Exporting

Joint Ventures