Business in South America
Cost of Living
The above concept refers to the sum of money needed to sustain a specific standard of living in terms of necessary expenses like food, housing, healthcare, taxes, among others. This approach would allow an entrepreneur to compare and identify the cheapest country that could create a balance between output and input. Recent statistics have revealed that starting a business in South America, especially in the U.S or Brazil, requires one to evaluate the following factors. In terms of the cost of living income, the United States the 15th most expensive nations globally whose value of the living index is 100.0, monthly income is $ 5, 257 while its purchasing power index is 100.0 (World Bank). On the other hand, Brazil is number 52 globally with the cost of living index showing 57.1, monthly income of $762 and the purchasing power index of 25.4.
Cultural Aspects and Geert-Hofstede Dimensions
An analysis of the American cultural patterns shows that this country thrives on an individualistic culture. This type of model creates an interactive design in which people could prefer direct communication. Americans, therefore, requires no “guidance in making their decisions towards achieving specific objectives” (Senosianin 14). In contrast, Brazilians embrace collectivistic culture in which people work and align themselves in groups to attain particular goals. Such a situation allows Brazilians to interact informally or in a friendly way hence have no systematic approach in their interactions. They relate with other people on the “interpersonal path, thus value human relations” (Senosianin 14). When establishing the initial conduct with people, Brazilians acquaint with their partners in a relaxed and friendly regardless of the time or work factors.
Hofstede’s cultural dimensions refer to Geert Hofstede initiative, which allows one to understand the best strategy of operating business in a multicultural setting. This perspective identifies that Brazil has a feminine-culture, whereas the U.S has masculine patterns. The feminine culture bars Brazilians from distinguishing between the societal sex roles. Moreover, this environment focus on both getting long-term profits as well as maintaining jobs (Senosianin 14). As a result, a Brazilian company could hire employees from a similar family to enhance family prosperity. Brazil has stronger “Uncertainty Avoidance as compared to the United States” (Senosianin 15). This feature also allows them to analyze the partnership trends with their partners until they could trust an individual before making a decision. In this context, one could see the American and Brazilian managers vary on how they perceive time.
Ease in Doing Business
The concept ease doing business is a World Bank initiative in which the higher rankings represents better or flexible business regulators as well as stronger projections of property rights. Through this ranking, the new business could optimize their productivity and profitability as it introduces new technologies in the business ecosystem. The concept of raking countries’ eases of doing business status depends on how the regulatory environment is favorable to business activities, and the protection of property rights. In this setting, economies ranked between 1 and 20 have flexible and more friendly business laws. Recent studies have shown out of 190 nations; Brazil is at position 124 in terms of ease in doing business and 134 for new entrants (World Bank). On the other hand, the United States stands at position 6 in ease of doing business but number 55 in starting a new business. With such critical statistics, one could easily select the most suitable economy for establishing the business.