Panama Panama Presented By: Kadell James Carl Krimminger Monica Washington
Dec 24, 2015
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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United States
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