Global Business Cultural Analysis: Singapore
What are the major elements and dimensions of culture in this region?
Singapore has four official languages that are used; Malay, Tamil, Mandarin Chinese, and English. These four languages are used due to the multiculturalism of the country. When it comes to international business, English is the common language. Many schools in Singapore use the English curriculum. Thus, the English language is well known throughout businesses and people do not have much trouble communicating (Warburton, 2017).
Verbal Communication. Indirect communication, refusals, and voice are three forms of verbal communication that Singaporean people use. Indirect communication is what they depend on. People in Singapore pay more attention to expression, tone of voice, and posture than they do on words. Singaporean’s rarely give a direct ‘no’ or negative, even if they do not agree with you. It is important to pay attention to hints of hesitation. Listen carefully to what they say and make sure you understand them by asking for their opinion. They may not speak up to give ideas but do give an honest opinion when asked to do so. In regard to voice, it is rude and overbearing when speaking loudly in Singapore (Evason, 2015).
Nonverbal Communication. Non-Verbal communication that Singaporean’s use is pointing, body language, physical contact, eye contact, silence, and disrespectfulness of touching someone’s head. It is rude to point at people with the index finger. Singaporeans point by using their whole hand of nod their hand in the appropriate direction. In Singapore, nodding of the head is common. Though, body language is usually modest in regard to gestures being uncommon. When it comes to physical contact, Singaporeans reserve touching, such as holding hands, hugging, or back-slapping for dear companions. That being said, Singaporeans are acclimated with coming into close contact with outsiders because of how swarmed the nation is. Open presentations of friendship are not generally valued. Eye contact indicates certainty and mindfulness in many situations. Certain Singaporeans, especially Muslim Malays and a few Hindus may deflect their eyes all the more regularly, especially while cooperating with those better than them. Holding eye to eye connection for a really long time can be deciphered as inconsiderate or testing. Silence is a critical and an intentional instrument utilized as a part of Asian correspondence. Pausing before giving a reaction demonstrates that somebody has connected suitable ideas and thoughts to the inquiry. It reflects respectfulness and regard. It is viewed as disrespectful and offensive to touch someone’s head (Evason, 2015).
There are 10 religions that Singapore has; Buddhism/Taoism, Islam, Hinduism, and Christianity are its principal religions. Judaism, Sikhism, Zoroastrianism, Baha’I, Jainism, and the non-religious frame the minority bunch. There are certain etiquettes that are to be observed at places of worship in Singapore. Do not wear footwear in mosques or temples; upon entering Hindus must wash their feet and hands. A few mosques and Sikh sanctuaries give robes and scarves to female guests. Hindu sanctuaries want ladies to wear long clothing below the waist. Flowers and fruits are brought along by Buddhists and Hindus as offerings for God. Eating and drinking is also usually not allowed (Guruswamy, n.d.).
Buddhism. Around three-fifths of Singapore’s population contribute to Buddhism. The most prevalent form is Chinese Mahayana Buddhism. Supporters of Buddhism rehearse lessons of Morality, Concentration and Wisdom. Fengshui, which is the craftsmanship and exploration of summoning positive vitality, is part of this religion. The biggest Chinese Mahayana Buddhist sanctuary in Singapore is the Kong Meng San Phor Kar See Monastery (Guruswamy, n.d.).
Taosim. Supporters of Taoism hold fast to the lessons of the old Chinese religious rationality of Lao Tzu. They believe in appreciating heaven, venerating predecessors and being humane to all under heaven. Followers make standard contributions of sustenance and consume joss stick/paper in memory of the individuals who have passed away. The idea of Yin Yang is gotten from this religion. Thian Hock Keng, or the Temple of Heavenly Happiness, was worked in 1842 out of appreciation for the Sea Goddess Mazu. It is the one of the most established Taoist sanctuaries in Singapore (Guruswamy, n.d.).
Islam. Sixteen percent of the population of Singapore believe in Islam, the majority being Malays. The Majlis Ugama Islam Singapore (MUIS) is the preeminent Islamic religious specialist in Singapore. Other than building and overseeing mosques and organizing the yearly journey to Mecca, it takes care of all the religious, social and welfare needs of Singaporean Muslims Masjid Sultan is one of the most established mosques in Singapore. The most unmistakable Islamic face of Singapore is Mr Yusof canister Ishak, the principal President of Singapore, whose picture is engraved on money takes note of that are still generally utilized today (Guruswamy, n.d.).
Christianity. Christians take after the lessons of Jesus, the Son of God. The life of Jesus, his message, enduring, passing on a cross and revival are recorded in the Bible. Adherents acknowledge Jesus as their Messiah. The Armenian Church, the most established Christian church in Singapore was finished in 1835. Christian holy places of all groups including Catholics and Protestants can be found in Singapore. Administrations are directed in numerous dialects amid the day for the advantage of different nationalities (Guruswamy, n.d.).
Hinduism. Hinduism is the oldest religion in the world and believe that the highest God takes various forms as ‘Vishnu’ the Preserver, ‘Brahma the Creator, and ‘Shiva’ the destroyer. Ganesha, Krishna, Murgan, Rama, Hanuman, Lakshmi, Durga, and Mariamman are the most famous manifestations of God worshipped in Singapore. Sri Mariamman Temple, established in 1827, is the oldest temple in Singapore that Hindu’s use (Guruswamy, n.d.).
Other Religions. There are around 15,000 Sikhs and seven Gurdwaras that are in Singapore. Jews are numbered around 300 and have two synagogues (Guruswamy, n.d.).
Singapore’s ethics is described by a dutifulness to someone of authority, powerful dependability to groups, and a subservience of individual personality to aggregate character. It is intriguing to take note of the cultural factors, such as Asian Values clash with the western goals of universal human rights and democracy. These Asian Values are presented from Confucian Ethics, which is used by citizens and the government. The government depends on Confucian Ethics and Asian values to stay away from the real notion that the government is tryant. Conversely, the government in Singapore’s subscription to Confucian Ethics is recent and campaigns within the government to promote have been met from minority groups such as Malays and Indians. Since Indians and Malays are generally Hindu and Muslim, separately, their qualities depend on their religions. All things considered, most of the Singaporeans are ethnic Chinese, they command the legislature, and utilize Confucianism to impact the strategy of the nation (Englehart, 2000).
Values and Attitudes
Singapore’s values and attitudes are very similar to their ethics. It is Singapore’s attempt to bring its people together through the vision of a “shared fate.” They develop this by conceptual and institutional contexts. This is where distinct communities can foster ties and shared practices while additionally conserving cultural and religious differences. Due to multiracialism in Singapore, Gho Chok Tong, Deputy Prime Minister made a dream of “Our Shared Values” which are planned to be shared by all Singaporeans, regardless of religion, ethnicity, and other differences. The Shared Values consist of the following five broad principles: “nation before community and society before self”, “family as the basic unit of society”, “community support and respect for the individual”, “consensus, not conflict”, and “racial and religious harmony” (Tan, 2012).
Dining and Entertainment. In Singapore, all hosts are to order all the dishes while in a restaurant. When eating with a Chinese, allow the host to invite you to begin your meal. Also, after eating it is appropriate to place the chopsticks on the chopstick rest. If this does not happen and they are left on your plate it indicates that you are still eating. In a Malay home, do not be late. The dinner is most of the time served immediately without appetizers or drinks beforehand. Indians wash their hands before dinner and after. Guests will be given a small bowl of water and a towel to wash their hands with. After meals with Indians, it is expected that a guest stays for around one hour of conversation. It is not polite to deny initial offers of food or drink. If a guest would like to refuse seconds, they need to put their hand above their plate and say, “No, thank you.” After one is finished with their food, they will place their spoon and fork together on their plate. If this is not done, more food will be offered (Bosrock, n.d.).
Greetings. Greetings follow certain protocols based on both the age and ethnic origin of the person. The western concept of shaking hands has been adopted from most younger people or those who work in multi-national companies. The Chinese ethnicity shake hands and their grasp is light although the handshake may be prolonged. Men and women also do not shake hands, due to Muslim men not touching women in public. When first meeting someone, nodding the head and smiling is appropriate (Singapore Guide, 2017).
Singapore has many customs that relate to its culture. It is important that shoes are taken off before entering one’s house, Singaporeans also take off their shoes before entering any temple or mosque. Everyone calls older people aunty or uncle, this is a sign of respect to its elders. If sitting in a reserved seat, they give their seats up to the elderly, handicapped, pregnant women, or young children. It’s a big deal if one fails to give up their seat. They also do not tip in Singapore. It is not necessary and if extra money is left, waiters think you need change (Lee, 2015).
Social Structures and Organizations
Social Class. Singapore is more separated by ethnicity than by class, although there is a wide income and wealth differences. Occupational mobility has been experienced by all ethnic groups and there is a great focus on education. Their overall society is a meritocracy (Singapore, n.d.).
A recent study in December of 2017, determined that Singaporeans tended to socialize mostly within their own social class defined by its housing type and the school that they came from. It showed that social networks that were involved in private housing and from elite schools had more diversity than those in public housing and from non-elite schools were solely in their own class.
It was also determined that higher income households are more prone to live in private property. 60% of the top income households live in private properties. 38.9% of the top income residents live in public housing (Singapore in Numbers, 2018).
Family. The family is the center of the social structure in Singapore and has emphasize on unity, loyalty, and respects for elders (Singapore Guide, 2017). Filial Piety is the foundation for intergenerational support in Singapore. It is based on Confucian ethics, which implies that individuals that are raised by noble people must act the same if they want to become noble (Zakaria, 1994).
Crime. Crime is a very important thing in Singapore and is taken seriously. Due to the strong social controls from the police force, it allows for less formal justice systems. Singapore has one of the lowest crime rates in the world. The crimes are most of the time non-violent and non-confrontational. The most common types of crime are pickpocketing, purse snatching, and theft of unattended items. The low crime rates are a positive for Singapore and the police force stresses the importance of the private sector and general public in being able to effectively fight crime and terrorism (Singapore, 2018).
The Ministry of Education in Singapore’s purpose is to help their students discover their talents, to make the best of them, show their full potential, and to acquire a passion for learning that will through life. Singapore’s education system is strong and is recognized around the world. The students in Singapore aim to reach the top and, in the end, achieve good results. There are good schools, which have talented school leaders and teachers. The school facilities are amongst some of the best in the world.
The school system is working on building strengths as they prepare for the future and the next generation of Singaporeans. The goal is for the education system to become more flexible and diverse, which provides students with more choices to meet different interests and ways of learning. It is important to them to help the Singaporeans build a set of values, so they will have the strength of character and flexibility to deal with life’s setbacks. Therefore, students will work hard to achieve their dreams (Education system, n.d.).
How are these elements and dimensions integrated by locals conducting business?
The locals of Singapore are very informal and hence are very uncomfortable in environments where they have to monitor on what they say and do. The locals are proud of their achievements since their separation from Malaysia. Hence, they are fed up with hearing about westerners who preach about freedom of speech. The locals conducting business understand the distinct aspects of the Singaporean culture as well as the similarities between different communities under the Singaporean umbrella. Therefore, the communication is all about creating a good impression. Because of British influence Singapore still adheres to British practices. They believe the secret to a good business rapport begins with knowing each other personally before starting a business relationship. The locals begin a conversation with topics about health, family and family backgrounds. The locals abhor topics on marriage, religion, and politics. Hence, when doing business with the locals it is better to avoid such topics due to the diversity of religious and political views of locals in Singapore. The Singaporeans society prides itself on tolerance and integration of different cultures. Aware of such Singaporean locals are able to thrive and operate their businesses successfully without cultural conflict. Mandarin and English are the most common form of communication in dialects; however, English is the major communication language in business (Chua, 2003).
Due to the multi-religious nature of the countries, the locals are tolerant of other religions. Most locals have Christians and Buddhists living in the same family. Discussions about religion are not incorporated in a business rapport. The locals by understanding the multi-religious nature are able to maneuver through the strange myriad of behaviors of the typical Singaporean. Respecting the religious standpoint of others enables them to conduct business smoothly (Mani, 1992).
In Singapore, work ethics are very important to business owners. By attracting a lot of high quality talents, a company will have a good ethical program. Business ethic is beneficial to create good image in front of clients. It is important for business owners to keep up the brand awareness for its company. This business ethic has been proven to be one of the best ways for creating positive public image. Partnership is also an important thing in Singapore. When individuals want to be successful, they should learn how to create connections with other business partners. Workers in Singapore want to avoid ethical problems within the workplace, therefore, it is important to deal with these complications immediately. In order to create good ethical practices for a business, individuals should learn how to incorporate company in Singapore (Why does business, 2014).
Values and Attitudes
Singapore work culture is a mixture of Asian and Western cultural influences. The cultural themes convey the unwritten cultural rules and regulations that oversee the way Singaporeans act within the workplace. Larger western companies located in Singapore often show mainly western-style work culture. However, most of the local government and private companies have more of an influence of the traditional Asian culture. Singaporeans mainly have a strict attitude to life, linked to clear authority structures and distinct social status lines (Guide to Singapore, n.d.).
Manners and Customs
The locals are quite reserved and prefer handshakes as the only form of touching until you are good friends. They respect women and no indecent touching is allowed. Public affection for opposite-sex couples is common. However, public outburst of anger is rare among the locals and all arguments are settled behind closed doors. Even though public affection is acceptable, it is not among professionals because of the importance of maintaining decorum in social situations than losing credibility. The locals are very friendly and hence laughing out loudly is not considered rude nor does it attract attention. The locals address colleagues depending on the corporate culture they find themselves in. They are time conscious, but the importance of deadlines and punctuality depends on the company they are working with and their attitudes. Professionals are expected to behave more responsibly especially when working in supervisory positions (Baker, 2008).
Social Structures and Organizations
Business Hierarchy. Singapore is recognized for its global business culture. Many businesses have its corporate office in Singapore for the Asia pacific region. In regards to business friendliness, it ranks very high. Singapore has a system that promises simplicity in beginning the business, dealing with permits, registration procedures, tax payments, and protection of creditors. The business hierarchy in Singapore is known for its composite structure and efficiency. In the business culture, senior level management has sole power of decision making. Networking is also an important concept of Singapore business culture. Training events, workshops, and conferences are well known networking venues. The business culture is a great mixture of Singapore’s history, geography, past, tradition, and climate. The traditional business hierarchy is changing with change of time and adopting new methods (Singapore Business, 2017).
White Collar Crime. Non-business and violent crime is low in Singapore, however white-collar crime is still major in this nation devoted to business. There are four elements of white collar crime in Singapore. Prosecutors of white-collar crime in business, first off must be directors, officers, and employees. The crime must be committed in a business or corporate setting and the reason must be for economic gain or business advantage. Lastly, the offenses must relate to a component of dishonesty or fraud (Anparasan, 2009).
There are two vital differences in regards to white-collar crime. White-collar crime is not expressed by judicial decisions in Singapore. It is defined from academics to express illegal, but non-violent acts with the focus on obtaining money, property, or business advantage through disguise. Also, due to the low poverty and swift response by the government, violent and non-business crime is low (Anparasan, 2009).
In Singapore, there are different kinds of white-collar crime. They are securities and futures misuse, companies misuse, forgery, and computer misuse. Singapore’s authoritarian government attempts to stay clear of white-collar crime since is it prevalent within its country (Anparasan, 2009).
Most locals are highly educated beyond high school either at home or abroad. Hence the local businessmen are open-minded individuals and small cultural mistakes are easily overlooked. There is nothing wrong with keeping a distance during a conversation.
How do both of the above items compare with United States culture and business?
Communication is an important component in all business dealings and especially in Singapore. It is a multilingual state and therefore English is widely spoken especially for business purpose. Mandarin Chinese, Tamil ad Malay are additional language that are spoken in Singapore. Similarly, English is the main language that is spoken in the US and therefore lack of language barrier makes it easier for business partners to carry out transactions successfully. However, there exist communications differences between the two countries namely; the Americans are considered to have a low-context culture because their communication is explicit and the message in every interaction is spelt out or defined. The association is short lived while the productivity is pegged on attention and adherence to procedures. The nonverbal aspect is not important and in case of disagreement, the differences are not personalized. They love to have their privacy and every event or task is scheduled. The Americans are labeled as loud, extremely friendly as well as very upfront in the way they speak. They are regarded as defensive about their ideas and can readily lead a confrontation when others do not agree with their reasoning.
On the other hand, Singapore is a high context country, thus their communication is implicit, and the nonverbal aspects are extremely important. Their relationships are built slowly and dependent of trust. Their space is communal, every disagreement is personalized, and everything has its own time, thus the events and meetings should not be scheduled. Therefore, although a huge difference exists between the two nations, with the interpretation of knowledge, successful business relationships can be established and maintained. More so, their greetings involve a bow in place of a handshake and it is common for people to nod even in situations they do not agree with in order to show respect and honor to others (Mason, 2015). Despite their differences in their communication styles, the two nations can have successful business partnerships.
Christianity is the main religion in the US while it is varied in Singapore. There four main religions in Singapore namely; Buddhism, Hinduism, Christianity and Islam. Despite the multiple religions in Singapore, the government has established important measures that are geared towards maintaining religious harmony. The churches have established missionary schools with an aim of nurturing the next generation of leaders. The business transactions can be carried out easily between the two countries because the Americans are tolerant with other people’s religious beliefs. More so, the freedom of religion is respected by the two countries. Nonetheless, it is important to understand or be familiar with the religious background of different business partners in order conduct business more effectively (Negus, 2013).
With individualism, the societal ties between individuals are loose and therefore every person is required to look after themselves and their immediate family. Since personal goals occupy the first priority, it encourages ambition that drives people towards success. The American culture revolves around this. Collectivism refers to societies where person’s integration is strong. The cohesiveness starts from birth and continues without interruption in exchange of indisputable loyalty. In the collectivist cultures, the managers are less likely to adhere to social norms like integrity, honesty or law. Thus, when a conflict arises between the business owners and the investors, the management will take sides with the earlier ones leading to a high agency cost.
The Singapore culture revolves around collectivism and shapes all activities including business dealings. For instance, in Singapore work place, the person with the highest authority makes the final decision. Conversely, many decisions are made collectively by team members in the US. Actually, in the American workplace step up, the lower cadre employees are more influential than they are in the Singapore workplace (Zhang, Liang ; Sun, 2013).
Values and Attitudes
The two nations have different values and attitudes systems. The Singaporeans have greater respect for their authority, they are group oriented and that is why the nation comes first followed by the community and lastly self. Americans on the other hand are opposite because they are more concerned about making a living for themselves. Their belief system is that liberty and justice is for all. They are happy to discuss their monetary achievements as well as their other successes.
In Singapore, there a strong focus on relationship building in addition to social networking in all their business dealings. Prior to signing a business contract, they spend significant time getting acquainted with each other. Thus, the business deals may take longer than the American style, however, they get an opportunity to know their employees and colleagues more and this helps in building genuine trust among them. More so, the relationships and social networking are considered casual and not related to business (Zhang, Liang ; Sun, 2013). In the US, professional and personal relationships are regarded as two different aspects that should never be overlapped.
Manners and Customs
America is a mixture of culture and religions, thus, there is no broadly acceptable rules in regard to how a person should conduct themselves in a public domain. However, an individual is required to be reasonably polite and respectful of another people’s space. On the other hand, in Singapore a person has to be cautious of certain body language and gestures that could upset others. For instance, in the US, a person can comfortably pat a child on their head or even ruffle their hair. In Singapore, this is offensive because head is regarded as the home of the soul thus sacred. More so, speaking while pointing at an item with one’s finger or feet is rude being Singapore. Crossing of legs or resting them on the chair to such an extent the feet are in a visible level is also wrong because feet are considered as the lowest body part and no attention should be drawn to them.
In the US eye contact signifies personal interest and engagement in the conversation. Lack of eye contact is considered as insulting while wondering eyes shows distraction. In a business meeting eye contact depict self-believe and confidence. In Singapore, eye contact is considered offensive contact because the eyes should be cast down or away to signify politeness or respect especially when meeting a senior or a person of higher status (Negus, 2013).
Social Structures and Organization
The Singaporeans business organizations are strongly influenced by the social hierarchy, good mannerisms and reputation. On the other hand, the Americans have a fast-paced and cut-throat style is unacceptable to the business persons in Singapore. In an organization in America an employee who disagrees with his superior is an indication of a go-getter and ambitious attitude. These lead to a jeopardized work relationship between them. The same is applicable in Singapore because employees do not say what they mean to avoid confrontation. Therefore, they will never say No but may say I will try or simply agree. However, since both states take businesses seriously, there is sufficient evidence that the Singapore organizations use the western-style management in the organizations (Zhang, Liang ; Sun, 2013). However, despite their differences both countries’ business partners can do business together when each one learns these business etiquettes.
Education is mandatory in the US and those who do not attend school commit a communal offense. On the other hand, in Singapore, it is mandatory for the primary age students to attend school and failure to comply is regarded as a criminal offense. The both states have primary, secondary, high school, college and universities in their education system. Currently, the US government has been offering scholarships to the outstanding students from Singapore to study in its prestigious schools and universities such as Cornell, Stanford and Harvard. The offer has enhanced their qualifications thus making Singapore to be recognized for their achievement in science and mathematics (Mason, 2015). This relationship is clear indication that the two nations can work together and form excellent business partnerships.
The Hofstede’s cross-cultural analysis model is vital in understanding the cultural differences between the US and the Singapore. Geert Hofstede applied the subset of cultural dimensions between 1967 and 1973 with a goal of gaining adequate understanding in the field of business management. The IBM employee database for more than 70 countries was analyzed. Aspects such as Individualism, Long-Term Orientation, Power Distance Index, Masculinity and Uncertainty Avoidance Index, and Indulgence were measured (Hofstede & Hofstede, 2004).
Power Distance Index. Power distance has to do with the fact that individuals are not equal in society. Singapore has a relatively high-power distance rating of 74. Since the culture is based on the Confucian tradition, one of the basic principles of society’s existence is a stable social structure based on a strict hierarchy in society. The presumption of the world outlook in this culture is the inequality between people who are bound by well-regulated relationships. United States has a lower score of 40, which means its citizens believe in equality and that everyone should be treated with respect.
Individualism. Individualism is the extent of the linkage a society upholds among its members. The Americans performed better under Individualism with a score of 91 because they are mainly concerned about their individual’s welfare. The society is loosely-knit, where it is expected for people to look after themselves and their close family members. Authorities should not be leaned on for support as much. Conversely, Singapore with a score of 20 is principally a collectivistic society. This means that to them, “We” is important. People belong to in-groups and look after each other in exchange for loyalty.
Masculinity. Masculinity is what motivates people and how they are driven to succeed by competition and achievement. Singapore scored 48 and is said to be in the middle, but more on the feminine side. In their society, being modest and humble is very important but they do strive to be successful. United States has a higher score of 62. This score is reflected from American behavioral patterns. The society strives to be the best and it is taught at an early age in order to be successful, one has to work hard.
Uncertainty Avoidance. Uncertainty Avoidance is the degree to which members of a culture feel threatened by ambiguous or unknown circumstances. Singapore performed poorly with a score of 8 because they abide to rules due to the hefty fines in the country. In their society, their lives are expected to be laid out and structured. On the other hand, the Americans, have a higher score of 46. This is because they do not require numerous strict laws due to the fact that they believe in freedom of expression.
Long-Term Orientation. Long-Term orientation labels how each society has upheld some connection with its past while dealing with problems of the present and future. On this scale, the Singaporeans scored average, with a score of 72, which is a clear indication of an immense economic success. It also is reflected in regards to the cultural qualities, which support long-term investment such as perseverance, ordering relationship by status, being sparse with resources, and having a sense of shame. The United States has a low score of 26, which shows that Americans are prone to examine new information. They also like short-term solutions, which is why they work so hard to achieve quick results.
Indulgence. Indulgence is the extent to which individuals try to regulate their desires and wishes. Singapore’s score is at the middle of the scale at 46. The United States scores at 68 and is reflected by their contradictory attitudes and behavior. They believe in working and playing hard (Country Comparison, n.d.).
Overview. Both Singapore and the US have been close strategic partners for many decades. In fact, Singapore is it 15th biggest trading partner as well as the 11th export major market. On the other hand, the Americans investment in Singapore is approximately $116 billion while Singapore’s FDI in the US is the $22 billion. One of the benefits being experienced by the latter is that there is increased job creation and economic development. These are motivating factors for the future free trade agreement and military strategic partnerships. The United States-Singapore Free Trade Agreement (USSFTA) was founded because of factors such as economic conditions, immediate need of security as well as the apprehension caused by the diplomatic Isolation. FTA was signed because of the common frustration that had set in due to the failed multilateral trade liberalization as a result of the WTO’s initial decades. The regional economic integration progress between the two states was slow as well Singapore desire for the ASEAN partners to embrace the market opening and its ability to limit the political risk that dampen capital flight. The FTA agreement was signed in May 2003 has benefited the US because it is able to provide the economic stimulus needed due to the slow economic uncertainty and growth
Additionally, in 2012 the US limitlessly based the Littoral Combat Ships (LCS) in Singapore and requested deploy approximately additional LCS by 2016. The fact that Singapore allowed the US to deploy additional two ships from the initially agreed two ships is a clear indication that of the strong US engagement in the Asian region. They are useful in the antisubmarine and surface warfare as well as mine countermeasures against small boats. This was accepted by the military in Singapore and two countries navy will continue to work towards finalizing the process (Kassim, 2017). The progress indicates that both Singapore and the US can become business partners.
What are the implications for United States businesses that wish to conduct business in that region?
Singapore is one of the easiest countries to conduct a business in the world. Furthermore, it is a melting point of culture and commerce. It is the home of more than tree national distinct languages and several different cultures. The local businessmen integrate cultural elements through qualities such as competence and empathy with subordinate issues (Visscher, 2007). The locals are expatriates hence are able to hold a high standard. This research found that the locals regard leadership skills and education as paramount in Singaporean culture. The largest part of the business environment is based on top to down management style in which high-level managers make strategic decisions and the lower staff implements it (Choy, 1987). Hence, finding out how a local merchant thinks of you is a difficult task. The society is male-centric in some levels such as marriage. However, the attitudes of the locals have changed greatly in the past ten years and cultural perspectives have changed. Nevertheless, most locals have no religion and are very comfortable. Hence religion plays no part in their business venture. Being a meritocratic state the aspect of the class is of no essence even though those with academic qualifications form a privileged class. The local merchants integrate the cultural elements with much consideration of the diversity. Hence they are able to maneuver through the myriads of behaviors of the typical Singaporean.
Singapore is one of the least corrupt countries in the world. More so labor disputes that cause strikes and labor are significantly absent in the country and this may extend to the future. The economy is one of the freest in the world, which enforces a low amount of import duties- stout, samsoo, medical samsoo, and beer. The United States and Singapore have a Free Trade Agreement which is helpful by putting United States goods to the side in a special customs status. By doing this, shipments are able to be expedited to their final destination in the stores and shops of Singapore.
Singapore’s corporate tax rate is one the lowest, therefore it is a good thing for US-based companies operate with them. The economy is steady due to the stable government that has not had any major political issues since the nation was formed in 1965. There is also strong military presence and defense agreements with other countries such as Japan, New Zealand, Australia, and United States. Thus, companies based out of the United States are not worried because they know operations within business should not be disturbed (Pang, 2007).
One of the greatest challenge with the Singapore administration is that media is regulated and censored. The current situation will definitely limit the circulation of the foreign publications. Its economy is business friendly, but the real estate is not as well. Singapore does not have a lot of space, therefore there is not a lot of land for business development. The land that is available is usually marked up, which drives up the cost for operating a business. The lack of land available is one of the main reasons why someone may not be able to enter the Singaporean market (Kurowski & Sussman, 2011).
Although there is no progress at the World Trade Organizations (WTO), Singapore can sign bilateral free trade agreements with a number of trading partners. Another advantage is that the country has the top business operating atmosphere in the Asia region. Due to Singapore being a tourism country, it could potentially bring more buyers from the world every year. There are emerging markets and expansion abroad, which could lead to business changes and new business areas. If land disputes are solved with Indonesia and Malaysia it could help increase land (ADBI, 2016).
Singapore is mainly an authoritarian and has only one ruling political party government. In regards to nonconformists, strict censorship and liberal laws are strictly enforced against them. The country is at a risk of being targeted by the Islamist militants from the neighboring nations such as Indonesia and others. It is important that United States based companies pay attention to the strict civil laws, so lawsuits and fines can be avoided (Singapore Defence & Security Report, 2013).
FDI analysis of Singapore
Foreign Direct Investment (FDI) is an investment carried outside the economy with an aim of acquiring long-term returns. The investors plan to gain a significant degree of control in the management of the business enterprise. Although there is no defined percentage of ownership, most countries have set the threshold at 10-25 percent. The US Department of Commerce has capped it at 10 percent. Most organization invests in the foreign markets in order to get better returns than they are currently getting at their domestic market. The local market on the other hand is able to benefit from the spillover effects in terms of increased productivity and technological distribution from the international enterprises to the domestic economy. The FDI has positive impact in country and thus, states have adjusted polices to accommodate the foreign investors. They have changed from being hostile to encourage or attract the FDI in order to strengthen the local companies through technology and knowledge that spill over to them. For instance, the domestic firms benefit from the advanced knowledge of process and product techniques (Lee & Sermcheep, 2017).
When the multinational enterprises enter the local market, the local firms experience knowledge confusion in the areas of technical innovation. There is also movement of labor because the new companies provide training which is not available in the domestic market. This is an advantage because it builds human capital and after a certain period of time, the employees move from the foreign enterprises to the local firms thus transferring the gained knowledge that increased local productivity. Another benefit is that, there is increased competition in the market that forces the local firms to improve their efficiency because they have to both update and efficiently make use of the technology for them to become more competitive. Another aspect of the increased competition can result to loss of productivity in the local firms because of reduce in the market share due to the crowding that is caused by the foreign enterprises (Ito & Krueger, 2007).