Doing Business in South Africa

Doing Business in South Africa

Introduction

The South African culture compromise of: black Afrikaans , white Afrikaans, mixed-race Afrikaans, Asian-Indian, White Chinese-Taiwanese (Koopman & van Muijen 1994). The black Afrikaans are the majority race in South Africa. The Zulu nation makes up the majority in the black Afrikaans, The white Afrikaans are the minority race and have the majority of the power. The white Afrikaans are predominately from the English origin. The mixed-race Afrikaans are closer to the white Afrikaans but they are discriminated against just like the black Afrikaans.The Asian culture is predominantly of the Indian origin. The Asian culture keep the heritage of their home land. The Chinese culture is mainly immigrates from Taiwan. Because of Apartheid, the Chinese are classified as white instead of Asian (Koopman & van Muijen 1994). When doing business in South Africa, an individual, company or corporation have to understand the culture of the country. This paper will examine how an United States (US) executive will negotiate with South African executives. The paper will look at the power distance index, individualism, masculinity, uncertainity avoidance and long vs. short term orientation cultural dimensions and see how they factor into the negotiating styles of the US and South African executives.

Power Distance Index

According to Koopman & van Muijen (1994) power distance (PD) measures how the less powerful members of organizations and institutions acknowledge and assume power is disproportionately distributed. Countries with a high PD raking tend to have a greater separation between high level executives and subordinates (Cook & Finlayson 2005). Countries with low PD have more social mobility between high level executives and subordinates (Cook & Finlayson 2005). When a US business executive is negotiating with South African executives; they need to factor in how the different cultures respond to power distance.

When a US executive is negotiating with black Afrikaans there rankings are similar. According to Hofstede’s ranking the US is 38th and black Afrikaans are 35/36 (Hofstede 1996). This shows that both US and black Afrikaans distribute there wealth evenly. US executive should not expect black African executives to treat them with the usual respect or deference. Black African executive will want to get to know the executive in an informal manner. Being loud will be interpreted poorly by black African executives. US executive should not be judgmental of the black Afrikaans appearance, demeanor or privileges.

When the US executive is negotiating with white Afrikaans there scores are also similar. Because the majority of white Afrikaans originated from Britian; the figures from Hofstede’s scoring will reflect Great Britian. According to Hofstede’s ranking the US is 38th and white Afrikaans are 35th (Hofstede 1996). This shows that both US and white Afrikaans distribute there wealth evenly. The US executive should use the same negotiating style with both black and white Afrikaan executives.

The color of the US executive will also constitute a shifting between the two executives. If the US executive is of African-American decent; then the white Afrikaans will see themselves as superior (Seidman 1999). If the US executive is of Caucausian decent; then the white Afrikaans will see themselves as equals (Seidman 1999). US executives need to remember to shake hands and call the white Afrikaan executive Mr. or Mrs. White Afrikaan executives hold meetings at there homes and they are casual. US executives should not bring gifts to a meeting with white Afrikaan executives. When US executives meet in public arenas they need to be dressed in suits.

When a US executive is negotiating with Asian Afrikaans there rankings are different. According to Hofstede’s ranking the US is 38th and Asian Afrikaans is 10th (Hofstede 1996). Asian Afrikaans has a high level of inequality of power and wealth. US executives should give Asian African executives clear and explicit directions. Asian African executives will not want to get to know the executive in an informal manner. Asian African executives stress meeting deadlines. Asian African executives are more authoritarian in their management style. Asian African executives will show respect and deference to the US executive.

Individualism

According to Cook & Finlayson (2005), individualism is the degree to which individuals are integrated into groups. In individualist countries the bonds between individuals are loose. In collectivist countries people are integrated into strong and united groups. Countries with high individualism rankings are personal goals and achievements are encouraged