Panama Panama Presented By: Kadell James Carl Krimminger Monica Washington.

PanamaPanama

Presented By:Kadell James

Carl KrimmingerMonica Washington

Panamanian Flag

Coat of Arms

Panama

Panama is often called the Funnel of World Commerce connecting North & South America

It’s where cultures come together & the America’s meet

Demographics

• Capital: Panama City• Official Language: Spanish• Government: Constitutional

Democracy• In 2008, population est. @ 3,309,679.• Capital: Panama City Pop. 451,000• Area: 29,157 sq mi• Water about 2.9% of the total area• GDP in 2008 $42.446 billion• Currency: Balboa and US dollars

Ethnic Groups

• 58.1% Mestizo14% Black and Mulatto6.7% Amerindian8.6% White5.5% Asian7.1% other (2000)

• Religions:– Roman Catholic 85%– Protestant 15%

About 38% of the land is part of the Rain Forest. The Panama Canal is 50 miles long, dividing the country into eastern & western regions. And the once American territory was 5 miles on each side of the canal.The whole country is a little smaller than South Carolina surface wise.

Panama Firemen marching in a parade

Tugboat being repaired in dry dock

Occupations

Shop owner – most were Hindu descent

Power Distance Index

• Panama: High PDI– inequalities of power and

wealth have been allowed to grow within the society

• U.S: Low PDI– society de-emphasizes the

differences between citizen's power and wealth

• Highest PDI of all Latin American countries

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Panama

How PDI effects business…  Characteristics Tips

High PDI (Panama)

Centralized companies.

Strong hierarchies.

Large gaps in compensation, authority, and respect.

Acknowledge a leader's power.

Be aware that you may need to go to the top for answers

Low PDI(United States)

Flatter organizations.

Supervisors and employees are considered almost as equals.

Use teamwork

Involve as many people as possible in decision making.

Source: http://www.mindtools.com/pages/article/newLDR_66.htm

Individualism vs. Collectivism

• Panama: Collective– Strong group

relationship– Loyalty very important

• U.S: Individualistic– Individuals and their

immediate family

How individualism/collectivism effects business…..

Characteristics Tips

High IDV(United States)

•High valuation on people's time and their need for freedom.•An enjoyment of challenges, and an expectation of rewards for hard work.•Respect for privacy.

•Acknowledge accomplishments.•Don't ask for too much personal information.•Encourage debate and expression of own ideas.

Low IDV(Panama)

•Emphasis on building skills and becoming masters of something.•Work for intrinsic rewards.•Harmony more important than honesty.

•Show respect for age and wisdom.•Suppress feelings and emotions to work in harmony.•Respect traditions and introduce change slowly.

Source: http://www.mindtools.com/pages/article/newLDR_66.htm

Masculinity vs. Femininity

• Panama: Masculine/Feminine– Mixture of aggressiveness

and sensitivity

• U.S: Masculine– Aggressiveness and

assertiveness

How Masculinity/Femininity effects business…

Characteristics Tips

High MAS(United States)

•Men are masculine and women are feminine.

•There is a well defined distinction between men's work and women's work.

•Be aware that people may expect male and female roles to be distinct.

•Advise men to avoid discussing emotions or making emotionally-based decisions or arguments.

Low MAS

•A woman can do anything a man can do.

•Powerful and successful women are admired and respected.

•Avoid an "old boys' club" mentality.•Ensure job design and practices are not discriminatory to either gender.•Treat men and women equally.

(Panama)

Source: http://www.mindtools.com/pages/article/newLDR_66.htm

Uncertainty Avoidance

• Panama: High UAI– Low tolerance for

uncertainty and ambiguity

• Reasons– 94% Roman Catholic– Attitude: “There can only

be one Truth and we have it”

• U.S: Average UAI– More accepting of

change & opinions

How Uncertainty Avoidance effects business…

Characteristics Tips

High UAI(Panama)

•Very formal business conduct with lots of rules and policies.•Need and expect structure.•Sense of nervousness spurns high levels of emotion and expression.•Differences are avoided.

•Be clear and concise about your expectations and parameters.•Plan and prepare, communicate often and early, provide detailed plans and focus on the tactical aspects of a job or project.•Express your emotions through hands gestures and raised voices.

Low UAI(United States)

•Informal business attitude.•More concern with long term strategy than what is happening on a daily basis.•Accepting of change and risk.

•Do not impose rules or structure unnecessarily.•Minimize your emotional response by being calm and contemplating situations before speaking.•Express curiosity when you discover differences.

Source: http://www.mindtools.com/pages/article/newLDR_66.htm

Final Business Tips…. Men’s Dress: conservative suits Women’s Dress: non-revealing dress or shirt and

blouse Business cards: Spanish & English Dining: host at one end, guest of honor at other end Begin conversations with “small talk” Good conversation topics: family, sports, hobbies Bad conversation topics: race problems, Canal Zone,

politics

Why Bring your money to Panama?

Why come Panama?

• Open door policy on foreign investment• Economy based in U.S. dollar• Low inflation rate• No foreign exchange risk

Factors that Attract Business

• Government policies and ideas• Colon Free Zone• Panama Canal• Tax Incentives and Labor Cost

Government

• Democratically operated– Lends itself to capitalism

• President Torroijos– Plans to expand Panama Canal and increase

economic development

• Trade Liberization Program– Decreased tariff ceiling

Colon Free Trade Zone

• Re-Exports a wide variety of merchandise across Latin America and various areas

• No tariffs and quotas in “free zone”– no sales tax– no production tax– exemption on income derived from abroad– no tax duty on imports to re-exports from the free

zone to foreign countries

Panama Canal

• Currently undergoing improvements to area that are estimated at about $1 billion

• Opportunity for hotels and tourism• Business possibilities from canal expansion

– Transportation systems– Ship owners, repairs, etc.– New residential construction

Panama Canal

Tax Incentives and Labor

• Minimum Wage $1.22– $350 average monthly salary

• Labor force of 961,403• Investment Stability Law• Special Tax Incentives for Tourism

– 100% tax exemption on income and property for 15 years

Panama City

Panama City

New construction in Panama City

Muchas Gracias, Alguna Pregunta?

ReferencesHofstede, Geert (2005). Cultures and Organizations: Software of the Mind. 2nd ed.

Mitchell, Charles (2002). A Short Course in International Business Culture. 3rd ed.

http://www.businesspanama.com

http://www.cyborlink.com/besite/panama.htm

http://www.geert-hofstede.com/hofstede_panama.shtml

http://www.geert-hofstede.com/hofstede_united_states.shtml

http://www.mindtools.com/pages/article/newLDR_66.htm