AMAZON AND GLOBAL BUSINESS

AMAZON AND GLOBAL BUSINESS

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Question one

According to the Hofstede cultural dimensions ranking, and Amazon’s operations in the United States, United Kingdom, China and Australia, the results are a portrayal of the subject countries’ cross –cultural communications analysis framework (The Hofstede Center, 2013). The choice of the four countries can be used as a representation of the main continents where the company has interests and runs active operations. The exclusion of Africa is to be considered non-vital in the course of trying to understand the main issue of cross-cultural communications from Amazon’s perspective since the concept of online commerce is relatively new and irregularly spread on the continent. However, this should not be taken to mean that the company is absent in Africa. Amazon runs successful offices and has profitable operations in South Africa, parts of Eastern, Northern, and West Africa.

From the perspective of Hofstede’s ranking, we find that the framework analyses cross-cultural communications using five dimensions. These are; Individualism (IDV), The power Index (PDI), Masculinity (MAS), The Uncertainty Avoidance Index (UAI), and Long Terms Orientation (LTO). IDV means the extent to which the society is willing to recognize individual and collective achievement. According to our choice of countries, China scored just 15, while United States scored 91. These examples show how the United States society reinforces achievements regardless of their being individual or out of collective effort. The second dimension, PDI, refers to the general degree of equality or inequality in a society. Asian countries such as China score very highly in this dimension due to a high degree of inequality in the otherwise communist state. On the other hand, the largely capitalist Western states score lowly on this dimension due to a level playing field and access to capital resources. The third dimension, MAS, refers to the degree to which a society is ready and willing to accept the traditional male model that exudes power, achievement and control. Herein, we find that, with the exception of the United Kingdom, the West and East scores are relatively equal.

The fourth dimension refers to the level of tolerance for uncertainty and ambiguity within the society. According to the ranking of our four countries, the Western countries score highly due to their liberal nature. However, the East is more superstitious and would like to be more in control of their future outcomes. Finally, with the LTO, or a society’s willingness to overcome obstacles with time, we see that China scored very highly, while the Western countries scored so low. This means that Westerners do not empower time to influence their actions as their Eastern counterparts do. A good example of this intolerance to time is Chinese delays in sealing deals.

Among the ways that a United States manager can modify his behavior to communicate better with foreign associates, especially those from Asia, is to adopt a cultural integration strategy. This would include attempts at trying to learn the other countries’ language cues, communication methods and dynamics as well as cultural practices. In addition, the U.S manager could also identify the differences that might bring clash between them.  For example, the Western style of communications employs liberal use of jokes, while the Eastern one is more respectful.  So, he might need to tone down on such destructive communication skills. There might also be a need to change the environment in which he communicates as this has a profound effect on the results. Europeans, for example, might be comfortable with an outside set-up, while Asians prefer more formal set up. As is the case, the communication dynamics usable in these two settings would have to change in order to keep the new associates happy.

Question two

Amazon’s global reach has seen it start operations in some countries with security issues. Most of these countries are the victims of political and social unrest but they are all unsafe from a business and investment perspective. A good example of such countries is Colombia. While the country is relatively safe from a political perspective, the risks associated with doing business in the country are real (Bureau of Western Hemisphere Affairs, 2013). Other regions of the world have been subject to political unrest. Some parts of Asia such as Kazakhstan and Pakistan are also politically unsafe. There is a rich history of politically motivated, ethnic war in these countries that subjects Amazon and its subsidiaries to larger risk than is permissible. African operations too are subject to the problems that make Amazon operations in the region a difficult affair. Areas of Central Africa such as Nigeria and Niger are currently experiencing a lot of political unrest, as is most of the Central African regions of Congo and DRC.

From an economic perspective, Amazon operations are also under constant threat due to the risk of market collapse and economic meltdown (Standard and Poor’s.com, 2014). The market crash of 2007 presents a good example with many regions in the Western and Central Europe suffering almost irreparable damage to their economies. Spain and Greece are two examples from Europe that make Amazon operations in Europe a tricky affair. In addition, Asian regions of Vietnam, Mynmar, and Cambodia also face the constant risk of inflation due to political tensions and internal wrangles that undermine development and a widespread shunning of Western influence. Africa too has its own fair share of countries that offer a substantial amount of economic risk to Amazon and its operations in the area. Until recently, Libya, Egypt, and Uganda were under intense economic pressure due to political wrangles. The resultant economic issues were not conducive for foreign companies to operate in.

Question three

Amazon runs its online business in many countries with diverse judicial systems. With regards to the parameters given, that is countries that use the common law, and those that use the civil law, we find that Amazon has professional relationships with all. Since countries that use the common law system are those that were under British rule, we find that their High Courts are very powerful entities. This means that High Court rulings within their boundaries are only overturned through legislation making commercial agreements binding. In addition, their freedom of expression makes for better business relations with each other and an easier entry by foreign companies like Amazon. On the other end, countries that use the civil law system are mostly those that utilize the communist economic systems, like China, and Russia. This results in oppressive business environments that have unfair trade terms for companies from capitalist countries like US-based Amazon. This results in difficult business environments for such companies.

Question four.

Amazon has procured insurance services from the Overseas Private Investment Company for its operations in some politically risky nations, especially in Asia and Africa. However, it has been reluctant in furthering the same over the recent years mainly due to its business model in many overseas markets that does not necessarily rely on a tangible platform. The company’s online presence enables it to evade the actual risks other physically present foreign companies have to contend with.

Question five.

Amazon owns the intellectual property rights to its proprietary e-book reading service and devices under the Kindle brand. In addition, under the Digital Rights Management Scheme (DRM), the formats its Kindle e-book reader supports,such as KF4, are primarily under its protection. While these intellectual property rights do not necessarily expire, their success is getting eroded by the emergence of more modern methods of reading online publications. However, Amazon is keen to recoup on the lost revenue by remaining competitive in other aspects of its online-based businesses, and has recently introduced same-day delivery to its online market place.

Question six

According to Transparency international, in 2014, Finland, New Zealand, and Denmark scored 89, 91 and 92 on the Corruptions Perceptions Index. These are the highest scores in the same index and indicate a low latency to corruption in the countries indicated. On the other hand, Nigeria and Equatorial Guinea scored very low in the same scale. In addition, the Equatorial Guinea  country went on to exemplify its high affinity when in 2013, its second vice president Teodorin Nguema Obiang, son the president was brought to the limelight for corruption alongside the Minster of defense (Lazut.............