Most of us know Africa. It’s a land of haves and have nots, fertile plains and arid deserts, a place where human life began and raging wars continue. But did you also know that Africa has 6 out of the 10 fastest growing countries in the world? That the U.S. import and export business has tripled over the last decade? That the International Monetary Fund (IMF) projections show sub-Saharan Africa (the region south of the Sahara) could grow up to 6% each of the next two years? This sounds like the perfect place to put into action our learned leadership skills while understanding the culture and people who live there.

According to Hofstede’s Dimensions of culture, in both East & West Africa Individualism is much lower than that of the United States while Power Distance is much higher. This could pose a hurdle to managing a group or you could use it to your advantage. If you are the person in charge then the African people will respect your agenda. This actually works well with the low sense of individuality. You should be able to form a great team of workers who can harmoniously work together. While this is a lot of pressure on the person in charge, believe in your business model and forge ahead. While this style of management is not for everyone (I know it’s not my milieu), it maybe the best way to succeed.

While the whole of Africa has been seen as much more corrupt than the United States, the perception of North Africa and Sub-Saharan Africa tends to be a tale of two very different economical views. In North Africa corruption seems to be rampant while in Sub-Saharan Africa, business was viewed as less corrupt. For example, the United States ranked 17^th out of 175 countries in a poll of global perceived corruption by Transparency International (2014). Countries in Northern Africa such as Morocco, Egypt and Libya scored 80, 94, and 166 respectively. According to the same study, Sub-Saharan countries came in much lower. Some included in this study were Botswana (31), South Africa (67), and Senegal (69). I must admit that I found the South African number a little shocking considering I think of it as a more European philosophized country. The good part about this perceived corruption is that the Sub-Saharan countries are making a big push to lower these numbers. The countries are involved in reforming there regulation and currently are responsible for 75 of 230 regulatory reforms going on in the world (World Bank, 2015).

In conclusion, I would fully expect a westernized business to thrive in Africa. The vast expanse of the continent provides many different opportunities for growth and profit. Growing economies in both natural resources and industry should lead toward stability in the region. The African people’s desire for trust, friendship and family can make them wonderful business partners. I’ve had the occasion to work with several folks who hailed from various African countries and I have always enjoyed it. They are hardworking, knowledgeable, warm and engaging. It not only makes them wonderful teammates but also loyal and giving workers. This makes them a dream to manage

So you’ve decided to do business in Russia. What do you need to know and what are the economical hurdles? What about geopolitical influences? These are great questions to explore prior to entering into a partnership with a Russian counterpart. I’d like to examine these questions and give you a logical conclusion on whether or not now is a good time to enter into an agreement with the former Soviet Union state. It’s certainly an interesting question given the strained relations between the respective governments and their philosophies.

To begin with, Russia for lack of a better term is massive (albeit a large portion of it uninhabitable). According to the CIA World Factbook, its 17 million plus square kilometers make it the largest country land mass in the world and is bordered by 14 different nations. It is almost twice the size of the United States but only boasts less than half the population. While in today’s global economy it’s expected that there’s going to be freight involved, when dealing with a country that is as large as Russia, this can pose some extra complications with on time delivery. Weather and mileage can hinder some deliveries but the good news is that the Russian rail system is one of the largest in the world behind only the United States (Wiki). You should also be knowledgeable of the Russian monetary system and the Ruble its currency. In the last 2 years, the Ruble has been cut in half in the exchange rate with the U.S. dollar largely due to sanctions imposed by several countries including the United States. But we’ll get to that..

Russia is largely homogenous in breakdown with 81% of the population being of Russian decent with no other ethnic group making up more than 4% of the population according to the 2010 census (Wiki). This should help with streamlined philosophies in how business is to be done. This isn’t necessarily a good thing for a startup business owner trying to get permits on Russian soil. According to Transparency International pole that shows perceived corruption worldwide, Russia ranked in the bottom 25% of countries and 112 out of 185 in “ease of doing business” (http://www.cnbc.com/id/100805382). There are laws though. According to the same CNBC report, an undisclosed Finnish company reported that they were going to turn the tables and sue any would be extorter taking 44 cases to court until they were finally left alone. While this is a relief to know there are such laws, it is certainly a drawback that there would be so many lawsuits in order for your company to be left alone to operate.

Now for the really big hurdle of geopolitical economics.. First off let’s describe the new “Cold War” between the U.S. and Russia. Since the U.S. stepped up economic sanctions due to Russia’s involvement  in Ukraine’s separatist movement,  the relations are beginning to become a bit frosty between two of the world’s Super Powers. It’s been highly suggested in many news reports and articles I’ve seen that Russian President Vladimir Putin and United States President Barack Obama just don’t see eye to eye on a lot of things. Ukraine, Syria and political refugee (or traitor depending on which side of the ocean you sit) Edward Snowden just to name a few. This has resulted in increased and somewhat devastating sanctions in Russian international business by both the U.S. and European Union. As I stated before, the Russian Ruble had been cut in half over the course of under 2 years. This has also seen their economy shrink 9% and also forced increased interest rates in order to combat these sanctions and protect its economy (http://money.cnn.com/2015/08/04/news/economy/russia-sanctions-impact-imf/). While this has not crippled the Russian economy yet, it hasn’t done it any favors. This is on top of other issues since the fall of the Soviet Union which included widespread unemployment, corruption, crime and increased alcoholism (Moran, et al 2014).

So now that we have answered the questions about political, social and economics there seems to be a lot of issues with forming an alliance with a Russian counterpart at this point in time. Looking at the destabilized currency, the ease of doing business and the geopolitical backlash that is reverberating in the U.S. and European Union, I’m not sure I would take the leap into business with Russia at this point in time. I do have hope that in the future, and hopefully not too far into the future, a Russian investment will be a good one. Keep an eye out and continue to watch global economics for interesting emerging markets and maybe you’ll be able to see the Russian economic sunrise before it breaks the horizon.

Ellyatt, H. (2013, June 11). “Is Russia to Corrupt for International Business?” Retrieved November 29, 2015. http://www.cnbc.com/id/100805382

Moran, R.T., Abramson, N.R. and Moran, S.V. (2014) Managing Cultural Differences. Routledge, New York.

Thompson, M. (2015, August 4). “How badly have sanctions hit Russia?” Retrieved November 29, 2015. http://money.cnn.com/2015/08/04/news/economy/russia-sanctions-impact-imf/

(n.d) Retrieved November 29, 2015, from https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

(n.d.). Retrieved November 29, 2015, from https://en.wikipedia.org/wiki/Ethnic_groups_in_Russia

(n.d.). Retrieved November 29, 2015, from https://en.wikipedia.org/wiki/Rail_transport_in_Russia

(n.d.) Retrieved November 29, 2015, from http://www.xe.com/currencycharts/?from=RUB&to=USD&view=2Y

 

It’s Brazil. Largely known for its gorgeous beaches, soccer balls and party atmosphere, focusing on business might be a secondary thought. But the fact of the matter is that Brazil is the largest economy in Latin America. According to statistics by the World Bank, in 2014 Brazil was ranked 7^th in GDP in the world. While the numbers pale in comparison to the behemoth economies of the United States and China (ranked 1&2), they were still responsible for nearly $2.5 trillion in gross product (World Bank 2014). This can make them a desirable trading partner in the U.S. and worldwide.

In traveling to Brazil for business, you may notice some varying cultural differences. First of all, the people of Brazil are largely a religious bunch. In fact, 92% of the population claims to be religiously affiliated with 65% being Roman Catholic and nearly 90% being of a Christian denomination (Wikipedia). The native language is Portuguese but many different dialects exist as well as different languages may be spoken depending on what part of the country you find yourself in. Brazil is somewhat of a melting pot with strong Eurasian influences which includes German, Polish, Italian and even Japanese (Moran, Abramson, Moran. 2014) languages and dialects which are spoken in the country. In studying the culture, you can certainly get a step ahead with doing business.

This iconic image of Jesus over Rio de Janeiro in Brazil shows the Christian nature of the citizens (http://www.durhamchurchnc.org/2012/06/26/high-and-lifted-up/).

Now that you know the background, what does this mean for accomplishing business goals? It’s an interesting question for sure. I’ve taken the liberty of gathering what I think are a couple of relevant and important points.

• “Bribes” vs. “Gifts”: What is to be done here? In our learnings, there seems to be some question regarding the policy around this. In the U.S., ethics around the giving of gifts or money to secure a contract can be a fine line to follow. In Brazil, there is a certain expectation that you, as a business person, will be willing to pay out a certain amount (Moran, et al. 2014). While you may feel like this is not something you are comfortable with, you also have to remember where you are at in the world. Do you personal ethics allow it? Is this just learned behavior? Ultimately, that is something for you to decide.
• A local partner is critical: This is not news to people discussing International business. It’s always good to have someone local to let you know what to do and when to do it. In Brazil, this is an especially prominent need. According to Forbes magazine, the legal and tariff system understanding is vital. In a case study, connecting with a liaison is important. Mike Seppo, CEO for Major League Gambling (MLG) stated, “It’s really critical because of the political and tax environment in Brazil.” (Burg, 2014).

All and all, Brazil can be a profitable and contributing business partner. It really depends on what your business ideals and risks can withstand. And also your ethical tolerances. I guess this is something business needs to decide. Are the religious, cultural and political implications something that you can deal with? Do the research for your plan and decide.

Burg, N. 2014. July 15. Retrieved from http://www.forbes.com/sites/hsbc/2014/07/15/5-key-things-to-know-before-doing-business-in-brazil/

http://databank.worldbank.org/data/download/GDP.pdf

Moran, R.T., Abramson, N.R. and Moran, S.V. (2014) Managing Cultural Differences. Routledge, New York.

 

Hello all! My name is Aaron White and I am currently a Project Manager at The Vanguard Group in Malvern, PA. I am trying to finish up my Bachelors degree after a several year hiatus from classes. I attended Purdue University a while back and I’m originally from Indiana. My long term goal is to make as much money as I can and retire early. While finishing up my education will help me obtain this, I really am doing it because it’s something I want to accomplish on a personal level. Also, while I am currently an independent contributor, I’d like to move into people leadership at some point.

I don’t have children and I love to golf (not unusual). I did hike the Appalachian Trail from Georgia to Maine 10 years ago so I usually use that as an icebreaker.

Here’s me giving the “thumbs up” to all of you and enjoying learning about global leadership!