Discuss about the case study International Business for Culture and Leadership.
Singapore is a multi-ethnic society consists of different communities including Chinese, Malay, Indian and Eurasian (Chan & Tong, 2014). The rationale for choosing Singapore as a host country is due to its potential resources for enhancing the business opportunities in an effective manner. In recent years, Singapore has been experiencing robust industrial growth due to its enhanced infrastructure. By choosing Singapore as a host country, different business opportunities can be analyzed in an effectual manner. Singapore borders Indonesia, Malaysia, and Brunei. The main island is entirely urbanized with a dense commercial city center to the south (Gomez & Hsiao, 2012). Moreover, the city is surrounded with the new township. Singapore has 5 million populations. Most of the organizations chose Singapore as their primary business center because it has an effective Commonwealth based legal system (Chew, 2015). On the other hand, Singapore has adequate opportunities for fast traction and quick entry. The multinational organizations in Singapore can easily enhance their business opportunities by simply hiring smart and educated talent available in the country.
The ethnic society of Singapore consists of 77% Chinese, 6% Indian, 15% Malay and 2% expatriates (World Bank Group.com, 2016). Hence, it can be assessed that the country includes huge cultural diversity that facilitates in enhancing the industrial growth in an efficient way. Singapore has not only experienced radical business growth but also improved their innovation and technology (Witt & Redding, 2013). By analyzing the most significant accomplishments of Singapore, it can be assessed that the nation is very prosperous and comes close to the top in per-capita incomes. On the other hand, the amazing fact is that the incredible business expansion has facilitated Singapore to diminish unemployment issues (Low & Ang, 2012). Hence, the selected host country is an appropriate business domain for new and existing multinational organizations due to its enhanced infrastructure.
Singapore has world’s best labor force that facilitates the industry to experience enormous growth in recent years. Singapore consists of several religions including Buddhist (Chinese), Muslim (Malays), Christian, Hindu, Sikh, and Taoist. The population of the country is 5,567,301 as of 2014 (Forbes.com, 2016). Due to its diverse culture, Singapore has four national languages including Mandarin, Malay, Tamil and English. Singapore is a multi-ethnic society, and its culture depends on three prime traditions including Chinese, Malay and Indian (Geert-hofstede.com, 2016). The three main ethnic groups in Singapore are culturally and religiously diverse. The nation became an independent country on August 9, 1965. However, the economy of the country was in a very bad shape with 14% unemployment rate (World Bank Group.com, 2016). The cultural diversity has facilitated several multinational organizations to develop their business opportunities in a systematic manner. On the other hand, enhanced learning structure of the country produces skilled employees who provide adequate support in the business enhancement.
Singapore includes the areas of 248 square miles. The main island in Singapore is urbanized with a dense commercial city center to the south. The particular nation consists of 5 million of populations. Among 5 million populations, 3 million are the citizens and permanent residents (World Bank Group.com, 2016). The unique cultural component of Singapore is the economic prosperity and the political stability. Industrial development has facilitated the country to enhance its economic stability. After independence, Singapore has been facing unemployment issues for several years. However, the unique cultural diversity and the political stability have facilitated the nation in diminishing the unemployment issues in an effective manner.
By discussing the ethnic relations and the history, it can be evaluated that the country emerged as a nation after 1965. Singapore had been a British colony, which was linked with the entire Malay Peninsula (Yue & Zubillaga-Pow, 2012). Due to consistent industry development, Singapore has experienced a radical business growth in recent years. The country has no single dominant identity due to its diverse culture in the society. Different cultural links to China, Malaysia, India, and Indonesia provide loyalties and Singaporean orientations, which stretch far beyond the national borders (Crane, Kawashima & Kawasaki, 2016). By discussing the urbanism and architecture, it can be assessed that Singapore is a green city, and it involves much-groomed greenness. On the other hand, the architectural development also attracts new businesses to make an entrance in Singapore. The striking features of the landscape are the high-rise buildings (Kong, 2012).
The above-discussed unique cultural components have facilitated Singapore to develop its international industrial economy. The particular country heavily depends on imports because there are very few natural resources available on the island. On the other hand, there is a large degree of state control on the national economy (Chhokar, Brodbeck & House, 2013). With the involvement of the skilled and proficient labors, the local industries have experienced profitable outcome. On the other hand, the diverse cultural background of the country has contributed to enhancing employee’s skills in an effective manner (Skoric & Poor, 2013). The manufacturing industry is the most important economic sector followed by business and financial services, transportation, commerce, and communication (Mangan, 2013).
Business culture in Singapore:
The most important factor for the industrial development in Singapore is the cultural diversity. However, it is quite difficult for the newly arrived organizations in Singapore for doing business in an efficient manner (Tan, 2012). There are different kind of social rules and protocols. Hence, organizations need to abide by those protocols for executing the business without offending their business partners. For executing business in Singapore, organizations are required to follow different protocols such as follows:
Exchanging business cards:
Business cards indicate simple necessity in the business culture. Most of the industries in Singapore follow the same process for executing business in a systematic manner. The perfect timing for exchanging the business cards is after the initial introduction. For doing any partnership businesses in Singapore, both partners need to provide their description on the business cards (Gwynne, 2013). For example, if any organization is doing business with Chinese people, it requires having one side of the business card translated into Mandarin. After receiving the business cards for the business contacts, they need to analyze it carefully. The business relationship depends on how one partner treats other’s business cards. That is why the business culture of Singapore does not allow mistreating business cards.
Business meetings:
For conducting any business meetings, organizations in Singapore need to schedule the particular process at least two weeks earlier (Chia, 2015). Moreover, it is important for the management to include a list of the team members and expertise along with making a formal request. On the other hand, if any business is trying to emerge with the other, it should accumulate adequate information on the existing business. Without collecting sufficient information on the existing business, the new partner will not be able to understand its business process management (Rui & Stefanone, 2013). Consequently, it will not facilitate them in enhancing the business profitability in an efficient manner. On the other hand, trust is another important factor that influences the partnership business to experience profitable outcome. The meeting cannot be executed on the public holidays in Singapore including Chinese New Year (Ferraro & Brody, 2015). Most of the industries in Singapore believe that the punctuality plays an integral role in business development. Every organization in Singapore follows a particular hierarchy structure for executing the business in a systematic manner. In the meeting session, the informative materials should always accompany the presentation so that it can easily highlight the challenges in the business (Skoric & Poor, 2013). It is important for the organization in Singapore to provide proper responses to the business partners for upholding a trusted business communication.
Negotiations:
Negotiation is one of the major factors for the business expansion. Most of the organizations in Singapore believe that the negotiation plays an integral role in the business development. By discussing the business culture of Singapore, it can be assessed that the business partners need to uphold different types of negotiations for executing a healthy business in the domestic and international market (Mangan, 2013). Business partners never raise their voice or get aggressive against their partner, as it can hamper the growth of the business. on the other hand, the management of the organization needs to pay attention to the business partner’s body language to figure out their responses. Without upholding the polite and professional nature, the hiring management in Singapore would not be able to maintain healthy workflow system at the workplace.
Business culture difference between Singapore (Host country) and Australia (Home country)
By analyzing the World Bank’s “2015 Ease of doing business report”, it can be assessed that Singapore ranked at the 1st place whereas Australia ranked at 10th position (World Bank Group.com, 2016). There is a significant difference between Australia and Singapore business culture such as taxes, investor’s protection, trading across the borders, registering property and dealing with the construction permits. According to the Forbes “2014 Best Countries for Business” list, Australia ranked at the sixteenth position, whereas Singapore ranked at eighth position (Forbes.com, 2016). The visible differences are seen in the areas of taxes, innovation, technology, and the investor’s protection.
Taxes:
By analyzing the comparison between Singapore and Australian tax system, it can be assessed that Singapore imposes one of the lowest taxes in the world. On the other hand, Australia includes the high tax system. Consequently, most of the manufacturing organizations face challenges to selling their products in Australia at a reasonable cost. In the 2009 Tax Misery Index, the Forbes has ranked Singapore at 11th position for having low tax misery. On the contrary, Australia was ranked at 28th position due to its high tax rates system (Forbes.com, 2016). Due to low tax rates, most of the foreign investors chose Singapore as their primary business center. Moreover, existing investors will enhance their investment in the business due to low tax rates. Consequently, it facilitates in enhancing the industrial growth within a short span of time.
Global competitiveness:
According to the world economic forum’s “Global Competitiveness Report 2014-2015”, Singapore is the second most competitive economy in the world while Australia was ranked at 22 in the business competitiveness (World Bank Group.com, 2016). Singapore delivers impeccable performance on most parameters including public trust of publications, the burden of government regulation, transparent government policy making, effective legal system, public trust of politicians, quality of infrastructure and quality of the educational system, etc (Chhokar, Brodbeck & House, 2013). On the other hand, there are some problematic areas for doing business in Australia such as access to the financing, tax rates, restrictive labor regulations, inefficient government bureaucracy and tax regulations. Singapore upholds an edge over Australia in many areas including fiscal freedom, business freedom, trade freedom, labor freedom and government spending (Crane, Kawashima & Kawasaki, 2016).
Labor force:
One of the major factors for the industrial development in Singapore is that the highly flexible and talented workforce (Low & Ang, 2012). Moreover, the enhanced workforce attracts most of the foreign investors to develop new business ideas in Singapore. On the contrary, most of the Australian organizations have been facing challenges in enhancing productivity due to their inefficient workforce. In a recent business report published by world economic forum, Singapore has the best labor-employer relations in the world, whereas the Australia has ranked at 43 in that particular area.
Openness to trade:
Singapore has a very open trade policy that facilitates new entrants to execute business in an effective manner. Most of the foreign investors select Singapore for the business due to several beneficial aspects including best customer services, least import and export paperwork, and excellent availability of transport infrastructure (Mangan, 2013). On the contrary, Australia’s tariff rates custom process, cost and documents requirements and complexity to the foreign participation are marked as its competitive disadvantages.
Power distance:
Singapore scores high on this particular dimension. Singapore normally has a syncretism approach to the religion due to its Confucian background (Geert-hofstede.com 2016). It is also the dominant approach in Singapore. The key principle of Confucian teaching indicates the stability of the society. Hence, it can be assessed that the new business ventures need to follow the cultural dimension of the society for executing the business in an efficient manner. According to this dimension, the power is centralized, and the managers follow their bosses.
Individualism:
Singapore scores 20 in this particular dimension. Singapore follows the collectivistic societal culture where a group of people gets high priority. On the other hand, the communication is the indirect and harmony of the group needs to be maintained. Therefore, the Investors are required to avoid open conflicts with other existing businesses. Without upholding healthy relationship with other businesses, new investors are unable to fulfill their task in an efficient manner (Gwynne, 2013).
Masculinity:
Singapore scores 48 in masculinity. They respect the softer aspects of the culture including consensus, sympathy for underdog, leveling with others (Ferraro & Brody, 2015). Moreover, the conflicts are avoided in the private workplace. The management of the organization in Singapore needs to uphold proper leadership approach for experiencing high growth in the business.
Uncertainty avoidance:
Singapore scores low on this particular dimension. In Singapore, people need to follow different types of rules because of its high PDI (Geert-hofstede.com 2016). Singaporeans call their society a “Fine country”. New industries will obtain huge resources and support from the host country to execute the business in an effective manner.
Long-term orientation:
Singapore scores 72 on the long-term orientation. The diverse cultural qualities allow new investors for enhancing their business within the domestic market. With the engagement of the long-term relationship, organizations experience immense growth in the business. On the other hand, multinational organizations can expand their business by implementing long-term investment (Gwynne, 2013).
Indulgence:
The particular dimension can be defined as the degree to which people try to manage their needs and urges. Singapore scores 46 on this particular dimension. Hence, it is not possible to settle on a penchant on this aspect due to its transitional score.
Figure 1: HOFSTEDE Model on Singapore
(Source: Created by author)
Conclusion:
It can be concluded that the new investors and industries obtain a wide range of opportunities in executing business in Singapore. There are several beneficial aspects of conducting business in Singapore. These benefits include low tax rates, highly skilled workforce, and least paperwork for new ventures. On the contrary, most of the multinational organizations have agreed with the fact that Singapore maintains an edge over Australia in different areas including business freedom, fiscal freedom, trade freedom, labor freedom and government spending.
References
Chan, K. B., & Tong, C. K. (2014). Singaporean Chinese doing business in China. In Chinese Business (pp. 119-129). Springer Singapore.
Chew, M. (2015). Leaders of Singapore. World Scientific.
Chhokar, J. S., Brodbeck, F. C., & House, R. J. (Eds.). (2013). Culture and leadership across the world: The GLOBE book of in-depth studies of 25 societies. Routledge.
Chia, Y. (2015). Education, Culture and the Singapore Developmental State: World-Soul Lost and Regained?. Springer.
Crane, D., Kawashima, N., & Kawasaki, K. I. (Eds.). (2016). Global culture: Media, arts, policy, and globalization. Routledge.
Ferraro, G., & Brody, E. K. (2015). Cultural Dimension of Global Business. Routledge.
Forbes.com (2016). .Retrieved 2 August 2016, from https://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html
Forbes.com. (2016). Retrieved 2 August 2016, from https://www.forbes.com/places/singapore/
Geert-hofstede.com (2016) Singapore – Geert Hofstede. (2016). Retrieved 2 August 2016, available at https://geert-hofstede.com/singapore.html
Gomez, T., & Hsiao, H. H. M. (Eds.). (2012). Chinese Business in Southeast Asia. Routledge.
Gwynne, J. (2013). Slutwalk, Feminist Activism and the Foreign Body in Singapore. Journal of Contemporary Asia, 43(1), 173-185.
Kong, L. (2012). Ambitions of a global city: arts, culture and creative economy in ‘Post-Crisis’ Singapore. International journal of cultural policy,18(3), 279-294.
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Mangan, J. A. (2013). Imperial Singapore–Culture Imperialism and Imperial Control: Athleticism As Ideological Intent. The International Journal of the History of Sport, 30(11), 1193-1220.
Rui, J., & Stefanone, M. A. (2013). Strategic self-presentation online: A cross-cultural study. Computers in Human Behavior, 29(1), 110-118.
Skoric, M. M., & Poor, N. (2013). Youth engagement in Singapore: The interplay of social and traditional media. Journal of Broadcasting & Electronic Media, 57(2), 187-204.
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Witt, M. A., & Redding, G. (2013). Asian business systems: institutional comparison, clusters and implications for varieties of capitalism and business systems theory. Socio-Economic Review, 11(2), 265-300.
World Bank Group.com (2016) Ranking of economies – Doing Business -. Doingbusiness.org. Retrieved 2 August 2016, from https://www.doingbusiness.org/rankings
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