Panama
Presented By:
Kadell James
Carl Krimminger
Monica Washington
P a n a m a
Panamanian Flag
Coat of Arms
Panama is often called the Funnel of World
Commerce connecting North & South America
It’s where cultures come together & the America’s meet
Demographics
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Capital: Panama City
Official Language: Spanish
Government: Constitutional Democracy
In 2008, population est. @ 3,309,679.
Capital: Panama City Pop. 451,000
Area: 29,157 sq mi
Water about 2.9% of the total area
GDP in 2008 $42.446 billion
Currency: Balboa and US dollars
Ethnic Groups
• 58.1% Mestizo
14% Black and Mulatto
6.7% Amerindian
8.6% White
5.5% Asian
7.1% other (2000)
• Religions:
– Roman Catholic 85%
– Protestant 15%
About 38% of the land is part of the Rain Forest. The Panama Canal is
50 miles long, dividing the country into eastern & western regions. And
the once American territory was 5 miles on each side of the canal.
The whole country is a little smaller than South Carolina surface wise.
Occupations
Panama Firemen
marching in a parade
Shop owner – most were
Hindu descent
Tugboat being repaired
in dry dock
Power Distance Index
• Panama: High PDI
– inequalities of power and
wealth have been allowed
to grow within the society
• U.S: Low PDI
– society de-emphasizes the
differences between
citizen's power and wealth
• Highest PDI of all Latin
American countries
100
90
80
70
60
50
United
States
40
Panama
30
20
10
0
95
40
How PDI effects business…
Characteristics
High PDI

Centralized companies.

Strong hierarchies.

Large gaps in
compensation, authority,
and respect.
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(Panama)
Low PDI
(United States)
Tips

Acknowledge a leader's
power.

Be aware that you may
need to go to the top for
answers
Flatter organizations.

Use teamwork
Supervisors and
employees are
considered almost as
equals.

Involve as many people
as possible in decision
making.
Source: http://www.mindtools.com/pages/article/newLDR_66.htm
Individualism vs.
Collectivism
• Panama: Collective
– Strong group
relationship
– Loyalty very important
• U.S: Individualistic
– Individuals and their
immediate family
How individualism/collectivism effects
business…..
High IDV
(United States)
Low IDV
(Panama)
Characteristics
Tips
•High valuation on people's time
and their need for freedom.
•An enjoyment of challenges, and
an expectation of rewards for hard
work.
•Respect for privacy.
•Acknowledge accomplishments.
•Don't ask for too much personal
information.
•Encourage debate and expression
of own ideas.
•Emphasis on building skills and
becoming masters of something.
•Work for intrinsic rewards.
•Harmony more important than
honesty.
•Show respect for age and wisdom.
•Suppress feelings and emotions to
work in harmony.
•Respect traditions and introduce
change slowly.
Source: http://www.mindtools.com/pages/article/newLDR_66.htm
Masculinity vs. Femininity
• Panama:
Masculine/Feminine
– Mixture of aggressiveness
and sensitivity
• U.S: Masculine
– Aggressiveness and
assertiveness
How Masculinity/Femininity effects
business…
Characteristics
High MAS
(United States)
(Panama)
Low MAS
Tips
•Men are masculine and women •Be aware that people may expect
are feminine.
male and female roles to be
distinct.
•There is a well defined
distinction between men's work •Advise men to avoid discussing
and women's work.
emotions or making emotionallybased decisions or arguments.
•A woman can do anything a man •Avoid an "old boys' club"
can do.
mentality.
•Ensure job design and practices
•Powerful and successful women are not discriminatory to either
are admired and respected.
gender.
•Treat men and women equally.
Source: http://www.mindtools.com/pages/article/newLDR_66.htm
Uncertainty Avoidance
• Panama: High UAI
– Low tolerance for
uncertainty and
ambiguity
• Reasons
– 94% Roman Catholic
– Attitude: “There can only
be one Truth and we
have it”
• U.S: Average UAI
– More accepting of
change & opinions
How Uncertainty Avoidance effects
business…
Characteristics
High UAI
(Panama)
Low UAI
(United States)
•Very formal business conduct
with lots of rules and policies.
•Need and expect structure.
•Sense of nervousness spurns
high levels of emotion and
expression.
•Differences are avoided.
•Informal business attitude.
•More concern with long term
strategy than what is happening
on a daily basis.
•Accepting of change and risk.
Source: http://www.mindtools.com/pages/article/newLDR_66.htm
Tips
•Be clear and concise about your
expectations and parameters.
•Plan and prepare, communicate
often and early, provide detailed
plans and focus on the tactical
aspects of a job or project.
•Express your emotions through
hands gestures and raised voices.
•Do not impose rules or structure
unnecessarily.
•Minimize your emotional
response by being calm and
contemplating situations before
speaking.
•Express curiosity when you
discover differences.
Final Business Tips….
Men’s Dress: conservative suits
Women’s Dress: non-revealing dress or shirt and
blouse
Business cards: Spanish & English
Dining: host at one end, guest of honor at other end
Begin conversations with “small talk”
Good conversation topics: family, sports, hobbies
Bad conversation topics: race problems, Canal Zone,
politics
Why Bring your money to
Panama?
Why come Panama?
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Open door policy on foreign investment
Economy based in U.S. dollar
Low inflation rate
No foreign exchange risk
Factors that Attract Business
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Government policies and ideas
Colon Free Zone
Panama Canal
Tax Incentives and Labor Cost
Government
• Democratically operated
– Lends itself to capitalism
• President Torroijos
– Plans to expand Panama Canal and increase
economic development
• Trade Liberization Program
– Decreased tariff ceiling
Colon Free Trade Zone
• Re-Exports a wide variety of merchandise
across Latin America and various areas
• No tariffs and quotas in “free zone”
– no sales tax
– no production tax
– exemption on income derived from abroad
– no tax duty on imports to re-exports from the free
zone to foreign countries
Panama Canal
• Currently undergoing improvements to area
that are estimated at about $1 billion
• Opportunity for hotels and tourism
• Business possibilities from canal expansion
– Transportation systems
– Ship owners, repairs, etc.
– New residential construction
Panama Canal
Tax Incentives and Labor
• Minimum Wage $1.22
– $350 average monthly salary
• Labor force of 961,403
• Investment Stability Law
• Special Tax Incentives for Tourism
– 100% tax exemption on income and property for
15 years
Panama City
Panama City
New construction in Panama City
Muchas Gracias, Alguna Pregunta?
References
Hofstede, Geert (2005). Cultures and Organizations: Software of the Mind. 2nd ed.
Mitchell, Charles (2002). A Short Course in International Business Culture. 3rd ed.
http://www.businesspanama.com
http://www.cyborlink.com/besite/panama.htm
http://www.geert-hofstede.com/hofstede_panama.shtml
http://www.geert-hofstede.com/hofstede_united_states.shtml
http://www.mindtools.com/pages/article/newLDR_66.htm