Doing business in a foreign country requires an understanding of the cultural differences between one’s own country and the country they will be visiting. Geert Hofstede developed a system for classifying countries according to five dimensions. This essay uses Hofstede’s dimensions as the basis for making recommendations for a female manager who will be going to Nicaragua in hopes of beginning a partnership. It explores the potential points of cultural conflict and how they could affect the development of the partnership.
The Republic of Nicaragua is located in Central America. It is bordered by Honduras to the north and Costa Rica to the south. It is a tropical climate. The Nicaraguan economy is based primarily on the agricultural sector. It is one of the least developed and among the poorest countries in Central America (Heuvel & Wood, n.d.). As a female business traveler who wishes to strike a business alliance, there are several things that one should know. The following will outline the most important business dos and don’ts that one needs to know to be successful.
Using Hofstede’s cultural dimensions is an excellent theory from which to gain insight into the similarities and differences within the culture that may have an impact on business negotiations within the country. The four dimensions are power distance, femininity and masculinity, uncertainty avoidance, and collectivism versus individualism. Hofstede’s scale uses values from 0-100 to describe the trait.
Power distance is the willingness of less powerful members of society to accept the power of those above them. The power distance score for Nicaragua is 70 out of 100. This means that lower ranking members of the society ‘know their place” (Heuvel & Wood, n.d.).By comparison, The United States only scores a 40 on the power distance scale (Hofstede, 2004). Even though there is a divided between the wealthier classes of the society, the lower members of society have an expectation that they have the ability to achieve upwards mobility and that they have the ability to increase their social standing. They are less willing to accept one’s “authority” and place.
In Nicaraguan society, the perception of power between the individuals is important. If the Nicaraguan perceived the American to be lower ranking, they will expect to dominate the conversation. It this is not accepted by the Americans, a competition could occur. This could lead to a breakdown in communication. The American must always be aware of how they are being perceived by the other party. Children are taught to accept power distance in early childhood through strict obedience and acceptance of their place in society (Heuvel & Wood, n.d.). Religion, particularly that of the Catholic Church also plays a role in the power distance of Nicaragua (Heuvel & Wood, n.d.). Power distance is based on long standing cultural traditions.
Individualism versus collectivism is the degree with which the interests of the group take precedence over the needs and concerns of the individual. Nicaragua is a highly collectivist county, receiving a score of 15 in individualism (Heuvel & Wood, n.d.). By comparison, the United States is ranked as of the most individualistic cultures in the world. The United States is a 91 on Individualism (Hofstede, 2004). In Nicaragua, membership in a group is highly important. The nuclear and extended family is the most important group to which one belongs. They feel an extra sense of loyalty and concern for improving the wealth and standing of their family. This means that forming a relationship must happen first before business can proceed. One can expect a considerable amount of personal talk and that the other party will want to get to know the person before proceeding to the business part of the conversation. The US visitor should allow them to take as much time as they need, because rushing it can make the American appear untrustworthy or crass. Building personal loyalty is an important part of Nicaraguan business practices and on in which one cannot cut corners (Heuvel & Wood, n.d.).
Femininity versus masculinity is degree to which male and female roles are defined. This dimension could be problematic and a source of conflict in the ability to form bonds and forge relationships. As the representative from the US-based country will be a female, this will be considered outside of prescribed male/female roles in Nicaraguan culture. Females still play a subordinate role to men in the United states with a masculinity index of 62 (Hofstede, 2004), but it is not as prominent in the United States as in Nicaraguan culture. In Nicaraguan culture, the female is expected to submit to the male. This could be a source of difficulty if the other party is a male. The male holds all the power in the Nicaraguan family and has all of the decision making power in the family. The male is expected to repress any sensitive emotions and may not respect a female who they perceive as too emotional (Heuvel & Wood, n.d.). Males are expected to be assertive and females are expected to be passive. The United States will accept a female in board room. This is a rarity in Nicaraguan culture and could be a source of potential cultural tension.
Uncertainty avoidance is the degree of anxiety that society members feel about uncertain events in the future. They are often willing to accept more laws and regulations to avoid uncertainty in countries that have high uncertainty avoidance. United States is a 62 on uncertainty avoidance (Hofstede, 2004). Nicaragua ranks much higher than the United States, falling in the 17-22 percentile (Heuvel & Wood, n.d.). This dimension is closely related to power distance. The Nicaraguan people are willing to accept a high amount of government control in their lives. They prefer long term employment and consistent management (Heuvel & Wood, n.d.). This means that once a relationship is formed, the Nicaraguan company will be likely to be loyal for many years to come. According to Hofstede (2004), religion plays a key role in countries that have a high need for avoiding uncertainty. Religious practices can be a source of structure in Nicaraguan society.
In terms of future orientation, Nicaragua tends to be focused on short term rather than long term orientation. This is similar to the United States that only receives a 29 in this dimension (Hofstede, 2004). Nicaraguans tend to focus on short term rewards and immediate gratification. This is similar to the United States, but the United States will tend to focus more on the long term than Nicaraguan culture. It may be easier to draw up short term plans in this relationship and more difficult to devise plant far into the future. The Nicaraguan part will be likely to want to see some type of benchmark early on in the business relationship so that they can see progress early on.
The most important differences between doing business in Nicaragua and doing business in the United States is the importance of establishing or building a relationship first. Coming across as a powerful woman may hinder the ability to forge relationships. Nicaraguans prefer casual dress, as opposed to more formal attire. One should dress conservatively. Being overdressed could be taken as a sign of trying to assert too much power, which can be taken as an insult. They are a friendly and open people who will more than likely greet with a hearty handshake. When the relationship becomes familiar, a kiss on the cheek is not unusual (Heuvel & Wood, n.d.).
It is acceptable in Nicaraguan culture to arrive a few minutes late, but not more than 30 minutes late (Heuvel & Wood, n.d.). One should never appear to be rushing through a meeting or schedule too may back to back meetings. It is considered rude to rush out and leave business unfinished (Heuvel & Wood, n.d.). The Nicaraguan counterpart will expect to be the center of attention for the U.S. counterpart.
It is not impossible to form a business relationship in Nicaragua, but it is more difficult that male to male partnerships. This is due to the perceptions of sharply divided gender roles. Women who try to take on a man’s gender role are generally frowned upon. However, if one keeps this in mind and understands the cultural norms regarding gender roles, one can form a successful partnership.
