EXPLORING LATIN AMERICAImplications for German Companies

using Spain as a Springboard Country

Ofiar Murwanti | Rohit Prabhudesai | Ang Boon Chuan | Eka Prawijaya

Agenda

• Introduction to Research Topic

• Cultural Models

• Methodology

• Findings

• Recommendations

Can Spain be a Springboard Countryfor German companies entering Latin America?

?(Koeppen 2012; Pavoncello 2011)

?(Winiecki 2012)

Cultural adaptation issues

(Ewing and Bajaj 2011; Parnell 2002; Rygl 2012; Selmer 2001, Selmer 2005, Zimmermann, Holman and Sparrow 2003)

Eurozone ties

Cultural proximityGrowing influence

Opportunities in Latin America(Long 2013; Molinski 2013)

Need for Springboard Country

(Penny 2013; Pla-Barber and Kamps 2012)

Cultural ModelsDimension Description

Power distance Extent to which individuals are separated by power, authority and prestige

In-group collectivism Extent to which individuals are proud and loyalty towards families, organizations and employers

Institutional collectivism Extent to which individuals are identify and work with groups at the expense of individual freedo

Uncertainty avoidance Extent to which individuals value structures, rules and consistency

Future orientation Extent to which individuals look towards future benefits at the sacrifice of immediate gratifications

Gender egalitarianism Extent to which individuals support gender equality

Assertiveness Extent to which individuals are confident, confrontational and aggressive

Humane orientation Extent to which individuals treat others with fairness, care and kindness

Performance orientation Extent to which individuals value and reward performance

Hofs

tede

Mod

el o

f Nati

onal

Cu

lture

(Hof

sted

e 19

80)

Global Leadership and O

rganizational Behaviour Effectiveness (GLO

BE) Study(Javidan, et al. 2005)

Lewis Model of Cross-Cultural Communication(Lewis 2013)

Multi-Actives

Re-ActivesLinear-Actives

Discourse oriented

Listening oriented

Information oriented

Methodology

13

1

13

1

ii

iii

Latin

n

nPDIPDI

13

1

13

1

ii

iii

Latin

n

nIDVIDV

13

1

13

1

ii

iii

Latin

n

nMASMAS

13

1

13

1

ii

iii

Latin

n

nUAIUAI

Formulae to compute Hofstede dimensions

Country Weighted Total w (x- μ) 2

PDI IDV MAS UAI PDI IDV MAS UAIArgentina South America 40,117,096 49 46 56 86 1,965,737,704 1,845,386,416 2,246,557,376 3,450,070,256 Bolivia South America NA Not available - - - - Brazil South America 201,032,714 69 38 49 76 13,871,257,266 7,639,243,132 9,850,602,986 15,278,486,264 Chile South America 16,634,603 63 23 28 86 1,047,979,989 382,595,869 465,768,884 1,430,575,858 Colombia South America 47,252,000 67 13 64 80 3,165,884,000 614,276,000 3,024,128,000 3,780,160,000 Ecuador South America 15,580,300 78 8 63 67 1,215,263,400 124,642,400 981,558,900 1,043,880,100 Paraguay South America NA Not available - - - - Peru South America 30,475,144 64 16 42 87 1,950,409,216 487,602,304 1,279,956,048 2,651,337,528 Uruguay South America 3,286,314 61 36 38 100 200,465,154 118,307,304 124,879,932 328,631,400 Venezuela South America 28,946,101 81 12 73 76 2,344,634,181 347,353,212 2,113,065,373 2,199,903,676 Cuba Caribbean NA Not available - - - - Dominican Republic Caribbean NA Not available - - - - Haiti Caribbean NA Not available - - - - Honduras Caribbean NA Not available - - - - Puerto Rico Caribbean NA Not available - - - - Costa Rica Central America 4,667,096 35 15 21 86 163,348,360 70,006,440 98,009,016 401,370,256 El Salvador Central America 6,183,000 66 19 40 94 408,078,000 117,477,000 247,320,000 581,202,000 Guatemala Central America 15,438,384 95 6 37 101 1,466,646,480 92,630,304 571,220,208 1,559,276,784 Mexico Central America 118,395,054 81 30 69 82 9,589,999,374 3,551,851,620 8,169,258,726 9,708,394,428 Nicaragua Central America NA Not available - - - - Panama Central America 3,405,813 95 11 44 86 323,552,235 37,463,943 149,855,772 292,899,918

Country Region Population

(Gelman 2007; Kish 1990)

Results

Data Validation

Translate quantities to description

Verify against qualitative descriptors

Generalization

Based on 3 countries with close values in 4 cultural

dimensions

Compare against descriptors in GLOBE

Study and Lewis Model

Descriptions converged across all models

Findings and Analysis

Culture Po

wer

Dist

ance

Indi

vidu

alism

Mas

culin

ity

Unc

erta

inty

Av

oida

nce

Asse

rtive

ness

Hum

ane

Orie

ntati

on

Perf

orm

ance

O

rient

ation

Inte

racti

on S

tyle

German Low High High High High Low High Information oriented

Spanish High Low Low Higher Low High Low Discussion oriented

Latin American Higher Lower Varied High Low High Low Discussion oriented

(Antshel 2002; Cuéllar, Arnold and Gonzalez 1995; Delgado 1994; Gupta, Hanges and Dorfman 2002; Johanson and Vahlne 2009;Lenartowicz and Johnson 2003; Soyez 2012; Varela, Salgado and Lasio 2010)

Legend

Cultural leap

Cultural bridge

Cultural equality

Organization Report Structure

German HQ

Colombia Country Manager

Mexico Country Manager

Spain Country Manager

German HQ

Spain Country Manager

Colombia Country Manager

Mexico Country Manager

Decentralized channel of communicationLatin-centric communication of corporate objectivesBetter local receptivenessEnhanced relational day-to-day liaisonRisk of miscommunication

Staffing StrategyPioneer Intelligence

Trader Defender

Roles of Country Manager

Global integrationBetter communication

Talent and deployment not always available

Intercultural training minimizes expatriate failure(Domsch and Lichtenberger 1991; Osman-Gani and Rockstuhl

2009; Qin and Baruch 2010; Waxin and Panaccio 2005)

Little effect on German expatriates(Puck, Kittler and Wright 2008)

Expatriation

Local responsivenessLower cost

(Reiche 2006)

Customized corporate culture training

(Harvey and Miceli 1999; Henze 2009)

Inpatriation

Management Mindset

Country Manager Fatherly FigureAuthority &

Organizational Control

Social gaps

Limited individual feedback to avoid conflictWorking group communication and dialogue

(Behrens 2010; Martinez 2005)

Soci

al in

tegr

ation

in

colle

ctivi

st a

nd e

galit

aria

n so

ciet

y

Building local association, teamwork, social identity and communitarianism(Höglund and Sundberg 2008; Jarvie 2003; Moss 2009; Perks 2007; Schlüter 2000; Stevenson and Alaug 1997; Tonts 2005)

Cerveza Sports Dance

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