Table of Contents

Part I: Country Analysis

Introduction

Chapter 1: Brazil

Brief History

Customs and Culture

Ethics

Political, Legal and Regulatory Environment

Economic Environment

Technological Environment

Chapter 2: Panama

Brief History

Customs and Culture

Ethics

Political, Legal and Regulatory Environment

Economic Environment

Technological Environment

Chapter 3: Mexico

Brief History

Customs and Culture

Ethics

Political, Legal and Regulatory Environment

Economic Environment

1

Technological Environment

Part One Conclusion

Conclusion

Part II: Entry Strategy

Introduction

Entry Strategy

Human Resources & Organizational Behavior Principles

Organizational Structure

Negotiations

Leadership

Motivation and Compensation

Recruitment and Selection

Conclusion

Works Cited

Part One

Part Two

2

Table of Contents

Part I: Country Analysis..................................................................................................................6

Introduction..................................................................................................................................6

Chapter 1: Brazil..............................................................................................................................6

Brief History................................................................................................................................6

Customs and Culture....................................................................................................................7

Work Force..................................................................................................................................9

Ethics..........................................................................................................................................10

Political, Legal and Regulatory Environment............................................................................11

Technological Environment.......................................................................................................14

Chapter 2: Panama.........................................................................................................................14

Brief Country History................................................................................................................14

Political, Legal and Regulatory Environment............................................................................17

Technological Environment.......................................................................................................19

Chapter 3: Mexico.........................................................................................................................19

Brief History..............................................................................................................................19

Customs and Cultures................................................................................................................20

Political, Legal, and regulatory environment.............................................................................22

Economic Environment..............................................................................................................22

Technological Environment.......................................................................................................24

Part One Conclusion..................................................................................................................25

Part II: Entry Strategy....................................................................................................................27

3

Introduction............................................................................................................................27

Entry Strategy........................................................................................................................27

Conclusion.............................................................................................................................41

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Part I: Country Analysis

Introduction

Every Marketing Firm does hours upon hours of research when implementing a new

market entry strategy. Blezoo, LLC is an Orlando based Marketing Firm with the motto of

“outside the box. inside the budget”. This is the approach our team of Marketing Researchers,

MMG, Inc., took when preparing to work with Blezoo, LLC to enter the Latin American arena.

Our research is “outside the box” by covering areas such as government, ethics, cultural

dimensions, as well as, technology. All marketing firms trying to enter into a new market need to

look at these areas if they plan of staying “inside the budget”. This report covers three countries,

Brazil, Panama, and Mexico. The goal of this research is to aid Blezoo in entering the

appropriate Latin American country for business.

Chapter 1: Brazil

Brief History

First inhabited by indigenous tribes over 8,000 years ago, Brazil came to establish itself

as a Portuguese colony in the 16th century after being discovered by the Europeans. It was not

until 1822, after three centuries of being ruled by Portugal, that Brazil established itself as an

independent nation (Brazil - World Factbook). As the largest and most populous country in

South America, Brazil underwent more than half a century of populist and harsh military

government until 1985 when military regime gave power to their civilian rulers. Brazil makes

very good use of the vast natural resources and large labor pool it possesses, and in turn is south

Americas leading economic power and a regional leader. Customarily a very agriculturally based

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economy, Brazil is known for the production of sugar, coffee, beef and soy beans. However the

service and industry sectors are increasingly growing stronger and thus fueling its economy

(Communicaid). In January of 1999, the Asian devastating economic crisis had spread to Brazil

and rather than prop up the currency, Brazil opted to let the currency float. The result was a

devastatingly low real worth. In August of 2002, IMF lent Brazil $30 billion over 15 months to

ensure Argentina’s economic problems did not bring down Brazil as well. (Brazil: History,

Geography, Government and Culture). As of January 2010 Brazil took a non permanent seat on

the UN Security Council for 2010-2011 term (CIA). Brazil’s strong economy paired with its

unique culture make doing business an exciting yet challenging endeavor, therefore as an

international manager understanding Brazil’s business etiquette and culture are crucial for

obtaining, maintaining and excelling at a successful business.

Customs and Culture

According to Hofstede’s Cultural Dimensions Brazil is in fact quite different than the

United States. Therefore every aspect of their culture needs to be understood and acknowledged

so that relationships can be created and maintained in a business scenario. Brazil maintains a

high uncertainty avoidance rating of 76, compared to a United States rating of 46. This is

illustrated through their strict hierarchical lines of organization within the companies. The chain

of command and flow of information is very structured and all key decisions are left to be made

by the most senior level of management within an organization (Brazilian Business Structures).

As an international manager, it is important to realize this because time and resources could

potentially wasted if trying to get a decision out of an individual who does not have the proper

level of authority. Brazil’s high rating of power distance, approximately 65, is also shown

6

through their organizational structure (Brazil - Hofstede). The unequal distribution of power not

only in businesses, but among all the people, is accepted more so in Brazil than in the United

State. The respect given to managers by the subordinates is reflected upon the personality of the

boss. Both work hard to foster a relationship based upon trust and personal respect not just who’s

in charge (Doing Business in Brazil). Prior to any business discussion it is pertinent to have

small talk and invest time into developing a relaxed atmosphere of trust (Business Culture in

Brazil). Other ways to appeal to the Brazilian business culture is by stressing a long-term

commitment and keeping in contact throughout a business agreement/transaction. The

importance of forming a personal relationship with a business contact and not just a transactional

one is critical in obtaining a business opportunity (Doing Business in Brazil). The manifest in

close long-term commitments to member ‘groups’, family, extended family or extended

relationships is evidence of a collectivist country. Brazil finds itself almost dead center with a

rating of almost 50 between Hofstede’s cultural dimension of masculinity vs. femininity. There

are no extreme values of either gender dominating the business environment. In fact, women

have increasingly been joining the work force, receiving better education and are prominently

found in education, medicine, journalism and small business owners (Brazil - Cultural Etiquette).

Other important aspects to be aware of when entering into a possible business ventures

with Brazil are the values they place on time, gift giving, forms of communication and

appearance. Throughout Brazil, life is lived at a slower pace; time is approached in a relaxed and

flexible manner, while punctuality and plans of precision are far less common. This lifestyle is

carried into business resulting in lengthened periods of time in which decisions are being made

(Communicaid). For that reason, patience is a virtue when doing business in Brazil. While

providing a gift to a future prospective business partner is common in the United States, it is not

7

necessary by any means to establish a business relationship. The favorable form of

communication goes hand in hand with how relationships are viewed; the more personal the

more effective. A great emphasis is placed on verbal communication and even more so on face to

face contact, while Brazilians limit the business talk done via phone, fax or e-mail (Brazil:

Cultural Etiquette). Interrupting one another mid-conversation is also a very common behavior,

so it is not to be taken as disrespectful. The people of Brazil pride themselves on dressing well,

hence appearance counts in working to appeal to the Brazilian business culture. Men should wear

conservative darker colored suits, shirts and ties. More specifically, the distinction between a

man at an executive level and a man who just works in an office is whether he wears a 3-piece

suit or 2-piece suit respectively.

The values people have and how people approach situations, handle conflicts and

communicate with others are expressions of their culture. Therefore, one can draw from this that

when two people with differentiating values and norms come together to work on something

where obstacles arise daily, conflict can and will occur due to miscommunication and

misunderstanding. Brazilians have a much smaller need for personal space and tend to stand

extremely close to one another and use physical contact, such as touching arms, elbows, backs,

as simple communication (Brazil: Cultural Etiquette). By backing away it is a sign of disrespect.

Work Force

Of Brazil’s 201,103,330 person population (ranked 5th largest in the world), 103.6

million people are a part of the workforce. Of this massive workforce, 20% work in agriculture,

14% work in manufacturing and 66% work in the services industry (Brazil - World Factbook).

Well established and major industries include textiles, shoes, chemicals, cement, lumber, iron

8

ore, tin, steel, aircraft, motor vehicles and parts (Brazil - World Factbook). Labor laws in Brazil

are similar to those in the United States, with a work day limit of 8 hours and a work week limit

of 44 hours. If the employer needs work to be done over the established maximum hours and the

employee agrees to do so, it is considered overtime and payment must be at least 50% higher

than the normal hourly rate (Advogados). Regular business hours Monday through Friday are

9:00 AM to 7:00PM and 9:00 AM to 1:00 PM on Saturdays (Communicaid).

Prior to entering Brazil and conducting business Blezoo would need to learn not only

crucial attributes to the Brazilian culture, but also be either hire a translator or become rather

familiar with Portuguese, as this it he official language of Brazil and the most widely spoken. In

fact, Brazil is the largest monolingual country in the world. English is spoken only by the

sophisticated elite, by senior executives higher in the organizational structure of large companies

and by younger executives in general. Spanish would allow foreigners to “get by” on the streets,

however in working with companies, especially beyond that of top level personnel; there cannot

be a language barrier (A Brief Guide to Doing Business in Brazil). Another option would be

hiring a despachante, or an accredited professional from an accounting or law firm, as to

facilitate applications, permits and business transactions for a fee. The assistance in turn creates

an advantage at working quickly and eliminating complications caused by unfamiliarity of

language, business and culture. These are a result of complex regulations for establishing

business relations and help connect the foreigner with the right businesses (Arreola).

Ethics

Despite a properly structured and well-functioning business environment, there are some

indications that corruption and bribery could be potential obstacles when doing business in

9

Brazil. Intellectual property infringement cases involve piracy and violation of software

copyrights due to an inadequate protection law and lack of enforcement (Ethical Business

Practices in BRICs). Corruption within the government sector has been a troubling issue for

Brazil in the past. However upon the reelection of President luiz Inacio lula da Silva in 2006, he

announced a fight against corruption. As of today, Brazil has endorsed the OECD Anti-Bribery

Convention, the United Nations Convention against Corruption, the OAS Inter-American

Convention against Corruption and the United Nations Convention against Transnational

organized crime (Arreola). In addition to efforts made on a national level, over 400 local

companies in the private sector have asserted their “zero-tolerance” policy by having signed the

Brazilian Pact for Integrity and against Corruption (Arreola). As of March 2010 a nationwide

survey was completed that found 208 out of the top 500 companies operating in Brazil adopted

corporate codes of ethical conduct, which indicates the growing relevance of business ethics in

Brazil (IBEN, 2010).

Ethics do play a role in what should be considered before entering Brazil to do business,

however, not one that outweighs the more positive and potentially beneficial outcomes. If after

complete evaluation of each country Brazil is chosen, Blezoo, LLC should enter the market with

caution and knowingly aware of the issues Brazil faces, choosing to not partake and rather instill

a positive influence within the Brazilian businesses.

Political, Legal and Regulatory Environment

            The government in Brazil is similar to the United States. It is a federal republic, which

the constitution of 1988 gave power to the federal government to spread over the three branches;

the executive, legislative, and judicial branch. The President holds office for 4 years and the

possibility of re-election for an additional 4-year term. Voting is required in Brazil for literate 10

people between the ages of 18 and 69, and optional for illiterate people, over the age of 70.

            Before the federal republic, Brazil went through decades of military dictatorship. In 1964,

the military overthrew the left-wing regime of President João Goulart and ruled until 1985.

While the Brazilian military was in power they had complete control over the entire economy,

the political scene as well as mass media. During this time, all mass communication was

censored by military intelligence along with the arrests and exiling of many left-winged

politicians. This all came to a halt from the recession of 1985. The pressures of the recession lead

to democratic elections which changed the history of Brazil’s politics.

            Brazil is one of the largest Democracies in the world. The country just inaugurated its

first female President, Dilma Rouseff. President Rouseff is a former gorilla, a military torture

victim, an economist, the former Minister of Energy and such and such President former Chief of

Staff. Her political plan is to continue with former President Lula Administration’s Oversees

Economic and Social Reform. This targeted reducing the country’s debt-ridden pension system,

which had an annual $20 billion deficit. The public protested and staged massive strikes, but the

efforts lead to economic growth and a decrease in unemployment. Over time, the strict economic

reform efforts raised “the country's minimum wage by 25% and introducing an ambitious social

welfare program, Bolsa Familia, which has pulled 36 million people (20% of the population) out

of deep poverty” (Brazil: History, Geography, Government and Culture).

Business Laws in Brazil

            According to the International Finance Corporation, Brazil is ranked number 127 out of

183 economies in the “Ease of Doing Business”. Brazil fell 3 spots from 2010 the “Doing

Business Rank”. Their economy is ranked in the ‘upper middle of the Worlds income category.

This has to do with the stabilization of the exporting industry along with their new trading

11

partner, China.  It takes Brazil 13 days to export goods, compared to the 18 days it takes most

other Latin American & Caribbean Countries; this includes all documents and procedures

necessary (International Finance Corporation). When it comes to importing, Brazil is at 17days

compared to 20.1 in most other Latin American Countries. The nature of duration with importing

and exporting goes to the preparation of document; which takes an average of 7 days to process.

When wanting to start a new business in Brazil, there is a 120 day span to get the firm registered

in full. The longest part of the process is applying to the municipality for an operations permit.

Economic Environment

            In Latin America, Brazil is China’s biggest trading partner in the area of iron ore and

soybeans. Over the past decade, Brazil’s economy has exploded thanks to their new trading

partner. The new arrangement has helped ease the pain of the global recession when it comes to

exporting in Latin American. “Approximately 29 percent of Brazil's exports were raw materials

in 2002, but by 2009, that had grown to 41 percent” (WPR). In 2007, the PAC, or growth

acceleration program, was introduced to help lay out future investment plans “R$504 billion

(US$306 billion) until 2010 to solve many long-overdue infrastructure issues as well as prepare

for the upcoming 2014 World Cup and 2016 Olympics events” (The Rio Times). In March of

this year, the PAC 2 was released promising the spending of “R$959 billion (US$582 billion)

from 2011 to 2014” (The Rio Times). Brazil has waited years to be able to hold two very

distinguished events. With their economy on the rise now, these events will put a spike in their

already prosperous economy. The government is preparing for future by making changes now.

            The local currency of Brazil is referred to as the Real (plural: Reais) and its symbol is

(BRL). The currency of Brazil has changed five times over the past three decades. It seemed as if

as soon as the people of Brazil got comfortable with one currency the government would change

12

it. After the start of the new monetary plan in 1994, the country settled on the Brazilian Real.

Before the steady rate of the Real, Brazilian currency were illustrated with Historic figures; the

issue with that was, the high inflation caused the bills to lose value quickly, and what was

supposed to be a homage turned into a mockery. The government learned and now placed

Brazilian animals on one side a feminine character to represent the Republic of Brazil. In

comparison with the US Dollar, the Real has strengthened in recent years due to the economy

crisis in the United States. The current exchange rate is 1USD= 1.667 BRL. The highest

exchange rate in the past five years was in November 2008 where 1USD=2.469BRL. The

following chart, from Yahoo Finance, shows the historical exchange rate between the Brazilian

Real (BRL) and the US Dollar (USD) over the past five years.

Technological Environment

Technology in Brazil has come a long way, but still has a way to go.  Only 5 years ago

did the internet hit the billion-user mark. “It concludes the number of web users in developing-

world “BRICI” countries — Brazil, Russia, India, China and Indonesia — will jump from 610

million this year to 1.2 billion by 2015” (Global Post). A current trend is “LAN Homes”, which

are similar to Internet Cafes. With high poverty in Brazil, many people do not own personal

computers and need access to the Internet for certain things, like register children for school.

Chapter 2: Panama

Brief Country History

Isthmus of Panama was discovered in 1503 by Conquistadors. Later, Panama City the

principal city and Capitol of Panama, was founded on August 15, 1519. Until 1821, Panama was

a Spanish colony and soon after became part of the Gran Colombia. Gran Colombia was a

13

republic of territories established in 1819. It encompassed most of northern South America,

present day Colombia, Brazil, Ecuador, Guyana, Peru and Venezuela and a small part of south

Central America, Panama. Panama in 1903 seceded from the Gran Colombia and became an

independent republic, and now is known as the Republic of Panama.

Another significant event that affected the country is the Panama Canal. The Panama

Canal is the most famous attraction to Panama and deeply rooted in the history of Panama more

than anything else. Through out Panama’ history, there were many different plans of building a

canal through the Isthmus of Panama. However, for some reason the interest in building the

canal was abandoned. The reason why it was so popular to build a canal through Central

America was because it would make for a shorter trip for traveling from the Pacific to the

Atlantic Ocean and vice-versa; instead of traveling down to Cape Cod, which is at the southern

tip of South America. The U.S. created an Isthmian Canal Commission to address the potential

benefits of creating a canal through Central America. The U.S. and Panama signed the Hay-

Bunau-Varilla treaty. In which the U.S. would recognize Panama’s independence and aid them

with the construction of the Panama Canal, in return for full access to the canal.

Culture

International managers should dress professionaly when doing business. “Conservative

business suits are allowed for men, whereas women should wear a dress or skirt and blouse.

Women should avoid wearing anything that is revealing. In Panama businessmen in high

position dress in suit; others wear camisillas (a lightweight, open-necked shirt that is not tucked

inside the trousers” (Nicol). After dressing appropriately, the next thing to look forward to is a

business meeting. Unlike social meeting where punctuality is not important. Panamanian

businesses run on a time schedule, especially appointments with foreign travelers. After the first 14

few formal meetings, meetings are held informally over coffee and snacks (World Trade Press).

During these meetings, behavior is another key aspect that a manager should look out for.

Some behaviors in Panama include having business card and other printed material in English

and Spanish, when dining the host will sit on one end of the table and the guest of honor at the

other end, gifts are not normally exchanged when entertaining, and if a foreign businesswomen is

invited to a business dinner she should always include the spouses in the invitations (Nicol). In

these meetings there is constant communication going. Titles are important and always included

in the business card. When talking to a person address them using their title only, but if they

don’t have a professional title address them as Mr., Mrs., or Miss. In business, conversation

starts with small talks. Appropriate conversation topics include family, hobbies, basketball, and

baseball. Conversation topics to avoid are politics, race problems, and the Canal Zone (Nicol).

According to Business Panama, the population is 70% mestizo (mixed European and

Native American descent), 14% African descent, 10% Spanish descent, 14% Indian with a total

population of 3,410,676 people (“Investing in Panama”). The majority of the population over the

age of 10 is literate. The primarily language is Spanish, however, English is commonly used in

the business world. “The employment market is closely regulated because the law sets a

maximum percentage for the employment of foreign workers in a business …. However foreign

companies can fill senior and/or sensitive position with expatriates” (Low Tax).

Ethics

Basic principles of ethics in Panama include corporate  governance, not accepting gifts

and payments from other employees and employers, companies respecting the privacy of the

employee by not disclosing personal information, no discriminating and harassment of  co-

workers, prevention of bribery and extortion, and that companies will provide adequate standards

15

of health and security (Business Ethics Working Group in Panama). Panama is doing everything

it can to become a better country. Having these ethical guidelines in place for companies to see

and adapt it into their own company will help the country in the way of being perceive as a good

country to do business.

Political, Legal and Regulatory Environment

The current president of Panama is Ricardo Martinelli. Panama is one of the most stable

countries in the area. It was ranked 4th in the World Bank’s Worldwide Governance Indicator in

2007 out of all Latin American countries (AB Panama). Panama is a constitutional democracy

and has no standing army. This tells investors that the economy will not be harmed by a chance

of war and that the chance for a military coup is low (AB Panama).

Some regulations that have changed since 2011 are “Panama eased business start-up by

increasing efficiency at the registrar, made it more expensive to transfer property by requiring

that an amount equal to 3% of the property value be paid upon registration.” Also Panama

reduced the corporate income tax rate, modified various taxes and created a new tax court of

appeals (The World Bank and International Finance Corporation).

Foreign Corporations entering Panama may keep their office/agencies and carry on with

business only if they have filed with the Mercantile Registry with the required documents. These

required documents are 1. Deed of protocolization of its Articles of Incorporation; 2. Copy of its

last balance sheet accompanied by a declaration of the amount of its capital engaged or to be

engaged in business in the Republic; 3. A certificate setting forth that it is incorporated and

16

organized under the laws of the country of its domicile authenticated by a Consular

Representative of the Republic in said country, or if there be none, then by that of a friendly

nation. If they do not have the documents then the company is not able to sue in the courts of

Panama, but they can be sued in Panama. Corporation also could be fined up to 5,000 balboas

imposed by the Secretary of Finance and the Treasury (Thetabiz Offshore).

Economic Environment

Panama is a service-dominated economy, with about 350,000 service businesses in the

country. Examples of includee banking, insurance, shipping and transport, offshore business,

import/re-export, mining, commerce and tourism. “Panama gives foreigner investors the same

rights as nationals. The tax structure is good and the government gives generous incentives

especially to companies devoted to exports. Taxes are levied only on net income made from

operation in Panama. There are no restrictions on transfer of profits, dividends, interests,

royalties and repatriation of capital or repayment of principal” (Focus Publications).

The currency of Panama is called the Balboa (PAB) and it is pegged to the U.S. dollar.

Panama has no paper currency, so they use the US dollar as their official currency for most of the

transaction (Low Tax). Their economy has boomed with the GDP averaging at 10.4% from

2006-2008. The expansion of the canal and the free trade agreement with the US is expected to

help increase and extend economic expansion. In order to grow “Panama needs to increase

private sector competitiveness and improve access to education and health. In addition, Panama

needs to focus on developing skills and stimulating innovation” (World Bank).

“The infrastructure is relatively well developed. Roads in the urban area are generally

good, but in the rural areas of the nation they are poor.” Most of the roads are unpaved. “Plans

are underway for the construction of 2 major superhighways.” The government is currently in the

17

midst of trying to privatize the nation's main railway. They are planning to build another railway

parallel with the canal and across the nation. There are 105 airports, 41 of which have paved

runways. In addition, there is the canal and 497 miles of navigable waterways that only shallow

draft vessels can use. The major ports are Balboa, Cristobal, Coco Solo, Manzanillo, and

Vacamonte, and ships from other nations are allowed (Encyclopedia of the Nations). With many

ways to distribute products and obtain resources, Mexico would be an ideal location for Blezoo.

Technological Environment

Panama has a very good, stable telecommunications infrastructure. After the US handed

the Panama Canal to Panama, they have worked to ensure that the country attained and

maintained telephone and Internet connection. According to the Latin Business Chronicle,

Panama is in the top three nations in Latin America in terms of technology and Internet

penetration. This can be attributed to the increased growth of wireless use within the country.

Chapter 3: Mexico

Brief History

From 1846 to 1848 the Mexican-American war changed the boundaries to what Mexico

is today. The US captured parts of current southwest United States and Mexico City. They used

this to force Mexico to sell its northern territory to the Unites States. In 1876 Porfirio Diaz took

control of Mexico, which at the time had large foreign debt, a bureaucracy, and no money in the

treasury to pay any of it. He established order and a working government. Diaz ruled Mexico for

33 years with the motto “Order and Progress.” ("Mexican History")  During his ruling Mexico

entered the industrial age, this time period was known as the Porfiriato. New political and

18

economic crisis put Mexico in a perfect position for foreign investment. Foreign investment

helped reshape Mexico’s economy.

The Mexican Revolution included many social, liberal and populist movement that cost

the lives of about 10% of Mexico’s population. The revolution lasted ten years and was

detrimental to their economy at the time. The decades of economic growth came to a stop, and

the large loss of population made it difficult to regain this economic boost.

El Milagro Mexicano or the Mexican Economic Miracle lasted four decades from 1930 to

1970. During this period Mexico experienced high economic growth, despite the Great

Depression causing a decrease in foreign investment. This growth began to fade in the late

1960’s with the end of the Partido Revolucionario Instituicional, Mexico’s ruling party.

Customs and Cultures

Mexico is like many other Latin American cultures. Mexico is a masculine culture with

high Uncertainty Avoidance, high Power Distance and low Individualism. Relationships are

crucial to facilitate business in Mexico. Your first impression is nearly impossible to change and

is almost based entirely on who introduces you. When meeting someone in Mexico be prepared

to answer personal questions about your life, family and background. To build a long-lasting

relationship with those in Mexico trustworthiness, sincerity, and integrity must be demonstrated.

Making meetings in Mexico’s business culture is important. Meetings should be

scheduled at least two weeks in advance, confirmed one week before arriving and again once

arrived in Mexico. Arriving at the meeting on time is important, despite the fact that the person

you are meeting will typically be thirty minutes late. If the person you are meeting is late try not

to appear irritated. These initial meetings are formal and all documents you bring should be in

19

English and Spanish. Business cards should have English on one side and Spanish on the other.

They are exchanged with everyone when meeting and are given Spanish side up. When invited to

a Mexicans house for dinner it is typical to bring s gift like flowers or candy. Marigolds

symbolize death in Mexico, it would be better to bring a white flower as they are uplifting. If you

receive a gift, be sure to open it immediately and enthusiastically. Arrive for diner thirty minutes

late if not later, being on time is inappropriate. Do not sit down until you are told to, or begin

eating until the hostess starts. In Mexico only men give toasts. Mexico’s business culture can

make it difficult for a business that is time conscious. Time is not important in most Latin

cultures like Mexico; deadlines are often viewed as mere guidelines.

Mexico workforce consists of 46.99 million people, making it the 13th largest workforce

in the world (World Factbook). There is a maximum workweek of 48 hours without paying

overtime. However, most companies have a 40 to 45 hour average workweek. Overtime cannot

exceed 3 hours per day or 3 days per week ("Ministry of the Economy - Intelligence System").

There are two shifts in Mexico the day shift which is eight hours and the night shift which is

seven. For every six days worked, employees are entitled to a paid seventh day off. It is

important for international managers to remember when hiring here employees are paid weekly.

Ethics

In Mexico, a focus on ethics is critical to creating business relationships. Mexico is

regarded as generally untrustworthy in the work environment. An international manager would

need to find a way to overcome this and facilitate in getting workers to trust each other. Fed Ex

has focused their operations in Mexico on trust. "In much of the work that gets done in our

20

company, people are alone without any direct supervision, for example the people who have to

deliver within strict time specifications. We have to trust them to do it” (Mexconnect).

Political, Legal, and regulatory environment

The government in the United States of Mexico was established by the constitution of the

United Mexican States. Their current president is Felipe Calderon. Their government is very

similar to that of the US. There are three branches: executive, legislative, and judicial. These

branches keep each other in check by separation of power. The Mexican President is directly

elected by citizens of the country.

Recently there has been extreme corruption in the Mexican government and police force.

Twenty year old student Marisol Valles Garcia was made police chief of, Praxedis Guadalupe

Guerrero, one of Mexico’s most violent cities (NY Daily News 1). The former mayor and police

chiefs have been assassinated; still she was the only person who would take the job. Mexico’s

war against drugs is being seen throughout the entire country. According to NY daily news a

leading candidate for Governor Rodolfo Torre was murdered in suspected ties with drug gang

violence (NY Daily News 1). The war on drugs in Mexico has rooted itself in many areas of their

culture and government. The high corruption in the police force has made it difficult if not

impossible to fight back in some areas. Many parts of Mexico are under military rule because the

chiefs of police are being murdered so quickly.

Economic Environment

If you compare Mexico to a middle class United States citizen they make slightly more

than average but live in poverty. Much of this separation between what should be and what is

comes from the high power distance in the country. Mexico has become one of the worlds top

21

import markets. This is largely due to the reduction or elimination of most tariffs and the

dismantling of exchange controls. Imports are critical to Mexico’s exploding economy. In the

past decade their trading policies have emphasized deregulation and promotion of imports and

exports. The overall economy is slipping slightly with a contraction of 6.5% in 2009 largely due

to deteriorating exports across the border, weak foreign direct investment and lower oil income.

However, in 2010 the economy had a slight turnaround and posted a 5% growth in real GDP

("Reuters"). Mexico is a heavy remittance receiver, mostly from US.

The Mexican Peso has long been the currency of Mexico and has struggled as of late;

after several economic downturns the Peso is beginning to strengthen again and while it is less

heavily dependent on the dollar for assistance it still feels the impact when the dollar weakens.

With the United States of Mexico being the second largest export destination and the third

largest trade ally of the United States of America it is likely that the close relationship of the peso

and the dollar will continue for some time. As a vast part of Mexico’s economy is based on trade

the 90% margin of free trade has greatly helped. All this trade requires stable relationships with

fellow countries and when these ties are injured or severed the economy suffers, and when the

economy suffers many businesses in Mexico suffer alongside.

Mexico has one of the most widespread road and infrastructure networks in Latin

America and most of the country is tied into the system. This issue is that they are poorly

maintained and were built up quickly, creating large numbers of toll roads and other problems. A

large portion of the country’s energy supply is nationalized through the Federal Electricity

Commission. As far as technological industries and the World go Mexico is advance but is in the

Stone Age compared to the US. For a company such as Blezoo, it is sensible to enter Mexico and

take advantage of the market, albeit it would not be as easy as in the United States.

22

Going back to the relationship between the US and Mexico, perception of the US way is

held in high esteem in Mexico. This helps with the transacting of business. Many US products

are found in Mexico and the same applies for the opposite relationship. This also brings up the

major issue of Mexico’s number one export likely being drugs and potentially accounting for

what has been said is up to 63% of the economy ("Global Envision").

Such close relations between the two countries mean that there are great variations when

speaking of our associations. Some are positive, such as the free trade agreement, NAFTA,

between our countries, and some are negative, the Mexican drug trade for example. This factor is

a more deterring business influence. Overall the relationship is good and there are fewer barriers

and boundaries to doing business than most countries around the globe and actually there are

incentives present when a US company is looking to enter into and work in Mexico. Lower

standards and less red tape are among them however they pretty much balance out with all the

downfalls of doing business there.

Technological Environment

Mexico is currently striving to break away from the US by creating partnerships with the

EU, South American countries and the Caribbean. With this they must increase and maintain

their investment into research and technology development, which they have not presently done.

While their infrastructure has improved, their technology has a long road ahead because of the

country’s close connection with the US. Resources are available but independent programs and

development is lacking. Several areas of focus for improvement for the country are: environment

and climate, biomedical research and health, agriculture, forestry and fisheries, industrial and

manufacturing technologies, electronics, materials and meteorology, non-nuclear energy,

23

transport, information society technologies, economic and social development, biotechnology,

aeronautics and space research and applications, and science and technology policies. Most of

this research is focused in the major cities, and of them, predominantly Mexico City. Since such

a large part of their economy is centered on service based industry many of the advances are

coming in areas such as human resources.

Part One Conclusion

After fully evaluating each of the three countries as potential candidates for Blezoo to

expand their business internationally, Money Making Group has come to the conclusion that the

optimal country is Panama. With the information our researchers have discovered and laid out

for analysis, Blezoo is provided with a detailed overview of how the aspects of culture, customs

and transportation for shipping to name a few will present themselves as cumbersome

opportunities upon entering the country, if in fact Blezoo chose Panama. As presented in this

analysis, Panama is one of the most highly ranked for ease of doing business and MMG feels as

though in weighing the options after examining the research, Blezoo will agree and find Panama

an extremely promising country to expand the business into.

24

25

Part II: Entry Strategy

Introduction

       Blezoo is an innovative and unique US based company with impending success for

growth in a new unknown territory. Specializing in creating promotional products and strategies

and providing further insight into the vast and limitless aspects of marketing Blezoo develops

strong brands for numerous organizations, including Habitat for Humanity and the University of

Central Florida. Engaging in business internationally without proper research of societies and

cultures that are unknown, can land a company in a risky and unsuccessful situation. MMG, Inc.

set out to analyze a list of potential candidates for countries in which to do business and choose

the one in which opportunity was maximized and risk was minimized. Poised with the

opportunity to grow and expand into the international marketplace, Blezoo presented their

dilemma of choosing the most promising market. MMG took action in collaborating amongst its

elite professionals and devised an entry strategy for a country with the most potential: Panama.

Entry Strategy

There are two primary business structure options that would make since for Blezoo LLC

to enter manufacturing in Panama. The first is a wholly owned vertically integrated company

dealing with everything from sales and marketing to production and shipping. The second is a

joint venture where Blezoo LLC would supply the management and company direction with the

partner handling logistics. Panama is easy to enter and do business in so this trouble-free

environment lessens the need for a partnership or a local contributor to stay competitive,

although we still believe it better to have a local knowledge source to utilize. So we have decided

26

that the best possible transition into the Panamanian market would involve elements of both

business structures.

Stage one of the strategy involves the delivery of any product sold in the country to be

manufactured primarily overseas, importing them from countries including but not limited to

China and the U.S. At this early stage of the entry strategy a sales force would be employed in

country and client relations would be handled by them. The new sales force is to be structured

under a Panamanian company. The existing Blezoo employees will serve a similar role to what

they do for current operations. The only thing the U.S. employees would not be as active in is

sales and marketing, which would be handled by the Panamanian company primarily. The

Panama base of operations will be located either in the Colon Free Trade Zone.

The difference this choice creates is the local company is more likely to be looked upon

as an insider because the company’s origin is Panama instead of the U.S. ("Choosing a

Corporate"). The main differentiators from a business perspective are wages and options of

employee nationality. For every ten employees nine must be local. A U.S. representative from

Blezoo will run operations in Panama; this position will rotate so multiple U.S. employees gain

the valuable international experience. With a new company being formed in Panama, the best

structure for Blezoo will be a Sociedad Anónima, which is similar to the U.S.’s LLC business

structure. This structure represents a Panamanian corporation in a way as well. The articles of the

S.A. must be written and handed in the Panama Public Registrars office. They can be written in

any language but must be translated to Spanish for the registrar. Under Panama law one and only

one owner is required and this can be a foreigner as well, for Blezoo S.A. Panama this person is

Dean. A lawyer is required for this process as well as three officers or directors. These must be

filed as well with the registrar (Rich).

27

At stage two, 3-5 years down the road, a working partnership between Blezoo LLC (US)

and a manufacturer, preferably with operations in both the U.S. and Panama, will be established.

There are several parameters for picking this manufacturer. The first is the dual operations aspect

of their business. The next key element is a reputable business image as Blezoo must build a

quality brand both in the U.S. and Panama. A third major factor in choosing a partner is the

ability of the manufacturer to quick and effectively deliver product to Blezoo’s clientele. If we

were to pick a manufacturer to partner with today it would be Eterna Plaque. S.A. located in

Panama City, Panama. This type of relationship allows Blezoo to reduce the chance of the

partner being a future competitor, but still gives them the local knowledge and influence of a

joint venture type partnership, as well as appearing to be an insider, beyond just owning a

Panama based company. The last primary benefit to partnering with a local company is it

provides another base of operations for the sales and marketing team to work from. In addition in

leads gathered from the partner would be incredibly beneficiary.

A rare opportunity is presented by the unique relationship between the U.S. and Panama,

including the soon to be effective free trade agreement. All in all Blezoo maintains its control on

its business process and its brand identity, lessens risk by forming a partnership, and gains an

inside track by partnering with a local company.

Human Resources / Organizational Behavior Principles

In order to guarantee Blezoo an effective and successful entrance into Panama, a

thorough analysis of both the culture within the business environment and among the overall

society was prepared by MMG. There are a number of significant differences that can be derived

from Hofstede and Trompenaar’s cultural research on how the United States and Panama interact

and carry out business that must be taken into consideration.

28

In terms of Hofstede’s dimension of power distance, Panama is the highest ranked

country with a score of 95 (Panama Geert Hofstede). This is indicative of a society in which the

less powerful members of organizations and institutions accept and expect that power and wealth

is distributed unequally. It also suggests that the widely accepted inequality is defined from

below, endorsed by the followers just as much as by the leaders. What this means for Blezoo, is

that upon establishing an office and an eventual agreement with a manufacturing company it will

find an extremely hierarchical organizational structure with workers instinctively obeying the

orders of the supervisors. This also relates to the aspect of Panamas high uncertainty avoidance.

The Panamanian society has a very low tolerance for ambiguity and risk, unstructured situations

and varying ideas, whereas the US is more accepting of the unknown. It is important to

acknowledge this difference and use it to Blezoo’s advantage in that the people working under

Blezoo in Panama will value strict rules, regulations and exact specifications for what they need

to do which will result in low turnover in the long-term. While the Panamanian culture is more

fitted to this mindset, seeking to minimize the possibility of any unusual, undesirable and risky

conditions, Blezoo can in turn feel safe and confident that what is laid out and intended to take

place, will.

A major distinguishing factor between Blezoo and Panama that could hinder a business

relationship if not recognized and approached in the correct manner is that of the cultural

dimension of individualism. While the US holds one of the highest rankings with a score of 91,

Panama remains on the other end of the spectrum with a score of 11; otherwise denoting the

culture to be collective. This is apparent in their desire to form close long-term commitments

with members, be that of a family, extended family, or extended business relationships. A key

value of workers that takes precedence is loyalty and in that, they foster strong relationships

29

within an organization where everyone takes responsibility for fellow members of their group.

This is vital to Blezoo’s success in Panama if this trait be realized and utilized properly by the

Director of operations. Prior to establishing an office and starting up business in Panama with a

handful of individuals employed to work as sales persons honest friendly relationships must be

strengthened so that a long-term commitment can be obtained.

Collectivism often goes hand in hand with feminine societies, and Panama is no

exception. Panama is nearly middle of the line in terms of masculinity, at 40 (Panama Geert

Hofstede). In comparing this to the US’s masculine 62, the culture would present itself to Blezoo

as much different. The society as a whole is friendlier and cooperative while incentives for

motivation and job satisfaction are less materialistic than those of the US. In terms of human

relations and how to approach workers in business, it is beneficial to Blezoo to recognize that

great value placed on caring for others and quality of life, thus leading to less stressful work

environments; a standard all managers and employees desire. Although Panama is a

predominantly feminine country, masculinity still emerges throughout the workplace

environment. In such case, success, money and “things” are the prevailing values and incentives.

The aspects of motivation and compensation however will be discussed later on. Also found with

masculinity is workers continuously aiming to improve and work their way up the hierarchical

corporate ladder, thus progressing an organization or industry. For this reason, Mr. Caravelis

should be aware that both traits will arise and each has different expectations of the job.

To facilitate the understanding of how Panamanians relate to one another, think, learn,

change and are motivated within the workplace and in business, MMG suggests Mr. Caravelis

view Panama as what Trompenaar refers to as a Family culture. Furthermore, communication

and direction given to employees will need to be tailored to provide a complimentary working 30

environment and aid in suitable business transactions. Hierarchy and titles remain of extreme

importance and it is imperative to be aware that personal and professional life overlap

(Ferguson). This in turn relates back to the attributed high power distance and uncertainty

avoidance, collectivism and feminine culture in that workers seek, respect and appreciate the

assertive guidance provided by the authority figure. Mr. Caravelis would need to employ a

Director who can be a caring paternal figure that knows what is best for them and the business.

Managers also commonly motivate successfully through praise while the practices tend to be

traditional and customary, binding the workgroup together.

The first three years of business in Panama will be done via importing, while having a

stationed central office that employs just a few sales individuals; therefore an audit by a US

business will be unnecessary. However, upon graduating into the second phase of Blezoo’s entry

strategy after three years, manufacturing will be done at a pre-existing factory run by an already

established and well known on-location Panamanian company. The chance that a Panamanian

factory would fail an audit is highly unlikely. This is due to the fact that Panama is very risk

averse, as noted previously with their high uncertainty avoidance. All regulations and

preventative measures taking precaution as to do things properly and as specified are adhered to

so that the desired outcomes are attained. With the high uncertainty avoidance and hierarchical

structure of status among the workers and supervisor, especially under the direction and guidance

of a US manager, Mr.Caravelis can rest assure there is little risk in the factory failing an audit.

Throughout the history of Panama, resources had been overwhelmingly focused on

services and transactions consequently leaving the assembly and manufacturing sectors harshly

underdeveloped; an issue contributing to their income disparities and social inequalities (Panama

Country Commercial Guide). Registered under Panama’s Chamber of Commerce there are three

31

potential market competitors. Cerebro Young and Rubicam is a 30 plus year old internationally

established and reputable marketing consulting, advertising, promotional and public relations

corporation. Recognized as “one of the world’s leading full-service advertising agencies,

distinguished by our proprietary knowledge, analytic rigor and creative solutions”, Y&R strives

to ignite brand energy (Who We Are). TeeShirts Express Panama is a company that does

salesand purchasing of wholesale promotional products and marketing tools (TeeShirts Express

Panama). Products include pens, calculators, stress balls, pocket knives and cell phone holders.

However, their website does little to promote the value the company adds to clients upon doing

business. Maxi Trade Corp, another internationally known company, is a well established 15

year old distributor and supplier in the field of promotional products. On their company website,

their objective description states that “With MaxiTrade”, they provide the “know-how and

necessary service to give you the chance to gain new market niches and lay down your brand”

(MaxiTrade Corp.). These businesses pose a threat to Blezoo in the sense that they have been

running for a sufficient number of years and have gained a great deal of knowledge, familiarity

and recognition within Panama. However, Blezoo brings to Panama a different type of

promotional supplier and consulting company.

Organization Structure

The organizational structure established for Blezoo, LLC. in Panama is critical to

ensuring smooth and cooperative operations among the workers and in attaining ample sales

goals. “The functional structure is by far the most popular organizational structure in the

business world… 65% to 75% of companies use the functional structure, because it’s basic and it

makes sense” (Fontaine). The functional structure will be the best option as an organizational

32

structure for Blezoo LLC, due to the fact that it offers the most advantages; while the

disadvantages presented with this structure, Blezoo is able to circumvent.

There are many different reasons that spark companies to change their organizational

structure. Some reasons can be change in Total Quality Management, establishment of new

business objectives and process reengineering. With Blezoo, the drive for change is due to

entering into a new country and targeting a new consumer market. Since, Blezoo is a relatively

small company and this will be the first time they will be entering a new country and consumer

market, it is best to keep their organizational structure simple. The simpler the organizational

structure the simpler it will make the entry into a new market for Blezoo.

In looking at the different organizational structures, each offers acceptable benefits for

Blezoo upon establishing business in the Panamanian market. The matrix structure will allow the

entire company to be more efficient, especially when resources are scarce, it helps develop cross-

functional skills in employees, and foster employment involvement. However, this structure is by

far one of the most complicated, requiring many employees in both the US and Panamanian

operations. This scenario is not one in which Blezoo wants and right now does not obtain the

capabilities of hiring the number of employees to make a matrix structure work. Despite a

divisional structure allowing for great coordination among products, markets and geographic

groups with one person in charge of each group, there is one issue in this case. Blezoo is a

smaller company and does not have as many products, markets or geographic groups to where a

divisional structure would increase the effectiveness of Blezoo operations.

Blezoo will want to keep a simple hierarchy in which the number of people reporting to a

single manager is small. As a business with few employees and limited levels within the

organizational structure, it is necessary that Blezoo remains a flat organization yet fully able to

33

achieve a wide span of control. This will be obtained by establishing operations in Panama under

a functional structure, otherwise seen as placing a small number of employees under the

supervision of one manager. This allows for clear concise and complete surety of direction given

to workers. Mr. Caravelis will continue to run the US Blezoo operations and appoint a U.S.

citizen, preferably one who is already employed by Blezoo, to work in Panama as the Director of

operations. This individual is also referred to as an expatriate. Their job will be to ensure that the

Panama operations align with the overall mission and objectives established by Blezoo in the

US; essentially being the eyes and ears of Mr. Caravelis in Panama. This person will be the key

source of information and direction from the top to the bottom in regards of relaying information

through the chain of command. Hired to work under the US Panamanian Director will be a

native Panamanian, fluent in international business, as the Assistant Director; playing the role of

an overall supervisor under the director. As natives to the area, they will be knowledgeable and

familiar with the market and be able to help hire capability employees and help with the entry of

Blezoo into the Panamanian market. In the second stage of expansion for Blezoo, after three

years, a joint venture will be launched and Blezoo will simply add a manufacturing Assistant

Director working under the leadership of the Panama Director.

       The Director of sales in Panama will be making trips back and forth between the Panama

office and the US to ensure proper alignment of Panama operations with the Blezoo in the home

country; thus attributing to prevention of the silo effect. This will help for a decentralized

decision making process because of the fewer organizational layers and provide the employees

with easy direct access to reach out and communicate with management. As a result employee

motivation is maintained and participation is high, as well as aid Blezoo in establishing a positive

work environment in Panama. “Most theories of motivation maintain that it’s not money that

34

inspires people … it’s the broader opportunity for autonomous decision making, greater personal

responsibility, direct contributions to upper-level matters that benefit the entire company, a sense

of accomplishment, and so forth” (Fontaine).

Negotiations

When doing business in a country that has a strong relationship with the United States,

things are 100% easier. “The use of the U.S. dollar as a legal currency and consumer preference

for high quality products at competitive prices are two reasons for high acceptance of U.S.

products in Panama” (U.S. Commercial Services). Typical Panamanian businessmen are highly

influenced by the culture of the United States. So, when a proposal is written have two copies,

one in Spanish and one in English. “If you have experience in the American market you must

emphasis this” (Global Negotiator). Most business while take place in the capital, Panama City.

This is due to the fact that the population in the city has great purchasing power and this is the

central location for main companies and public institutions. Outside of the walls of Panama City

the area has a low level of development and poverty is at a high.

When meeting a potential client for the first time, U.S. businessmen must build a good

relationship. Panamanian businesses need to have a trusting relationship with the people they are

going into business with. At the beginning of meeting, small talk is a must. “Good conversation

topics include: family, hobbies, basketball and baseball. And bad conversation topics are: former

Canal Zone, race problems, politics” (Nicol). Titles are also very important. Always include a

title on business cards and address a person by their professional titles or if they do not have one,

address them by a surname. Panamanian women are moving up in managerial roles, this is still

relatively rare. U.S. businesswomen need to emphasize that they are representing their company.

Leadership35

The leadership set up in Panama is very formal and intercultural management will be

more successful if the people in power are treated with respect. “This is a culture where it is

important to take time to build a business relationship and where personal introductions are

important. "Who you know" is often as important as "what you know". "Personalismo" (personal

relationships), which involves loyalty to family and friends, provides the glue that binds the

country together” (Intercultural Management in Panama).

When communicating cross cultural communication is be the more effective route when

managing a business in Panama. Each employee in the company plays a distinct role in the

success of the company. “ People believe that their supervisors have been chosen because they

have more experience than those they manage, and it is, therefore, unnecessary, and even

inappropriate for them to consult with lower-ranking individuals when decision-making”

(Intercultural Management in Panama). Management is not only concerned with their employees

work relationship, but they also demonstrate a concern for the employee’s personal issues. The

work environment is a very collective culture.

Panamanian companies are open for change, but the change must have a far amount of

time to implement. A business plan must have an incredible amount on thought, planning and

evaluation put into it to be successful in the Panamanian business environment. “Intercultural

sensitivity is important with Panama’s attitude toward risk dramatically impacted by the negative

ramifications of failure on both the individual and the group.” (Intercultural Management in

Panama).

Doing business in Panama will be smooth if the U.S. company understands about the

Panamanian culture and their approach to doing business. Since Panama has a strong relationship

with the United States they are more willing to work together. The Panamanian business people

36

are highly influenced by the U.S. culture, so businessmen going to Panama will not need to make

a 180 degree business approach when working in Panama.

Motivation and Compensation

          Panama’s labor laws and being a collectivist country will have impact on how

Mr.Caravelis handles compensation and motivation among his employees. Panama’s labor laws

have stated that an annual paid vacation of 30 days should be given to the employee when they

have worked 11 months of continuous employment. If an employee decides to work on those

days they would be paid twice their regular salary (Panama Offshore Legal Law Firm). If an

employee quits or is terminated before completing 11 months of continuous work then they

would be compensated for their accumulated vacation time (Panama Realtor). There is also a 13

month rule which states that a worker gets paid 13 months for every 12 months or one day’s

salary for every 11 days worked (Panama Business and Travel). This simply means that the

employee will get a bonus of one month’s pay every year. The bonus is usually paid in 3

installments, April 15, August 15 and, December 15 (Panama Realtor).

         Panama is a tightly knit collectivist country, and because of this they think about

themselves as members of a group and/or family and doing activities that would benefit the

group as a whole, rather than as individuals (Osland and Osland). Therefore, if an employee were

to have elderly parents that needed help being taken care of, a possible motivator for them would

be hiring a maid or nurse that makes house trips to care for their parents while at work. This is an

advantage to the employee seeing as though nursing homes in Panama would cost them $7000 -

$8000 a month, hiring a maid would cost just over $600 a month and hiring a licensed doctor

would cost $1000 a month (Panama Offshore Legal Law Firm). In terms of incentives for

women employees, Blezoo could offer time off to be with their family and care for children.

37

Women employees usually request permission for absence of time off due to necessary family

obligations (Osland and Osland). Instead of asking for time off, it could be offered to them as a

reward for a job well done. For higher paid employees, a private medical insurance and a lump

sum benefit of one to three times earning could motivate them (International Benefit Network).

Giving benefits such as health, dental, maternity, disability, and death benefits might not always

work. The reason for this is that the social security system replaces many employee benefits that

an employer would normally offer (All Properties Panama). This is beneficial for Blezoo as it

cuts their business expenses, however it also means Blezoo would need to find other ways of

motivating their employees to work diligently and feel satisfied with their job.  

         The working culture in Panama is relaxed. The workplace tends to be informal and includes

a strong emphasis on building close relationships with the coworker (Expat Focus). Having a

formal organizational structure or job description doesn’t assure compliance and service (Osland

and Osland). Panamanians enjoy working for others due to the value they place in personal

relationships. This would mean that throwing company gatherings and parties once or twice a

month would build workplace relationships within the company and among the employees

(Osland and Osland). It could also in turn motivate Panamanians to work more during the week

and give them something to look forward to. When dealing with the compensation of the sales

team, compensation should be done by individual basis. As for the pay of the salesperson,

minimum wage for a small business employee is US$160.00 a month (Pardini & Associates).

While this is only the minimum wage, the actual salary is entirely up to Blezoo. As a reference in

deciding the amount, telemarketers are paid as much as US$1,500 a month if they know the

market well and can sell a considerably sufficient amount of product. As for executive assistants

who are fluent in English, generally their pay is around US$350 to US$600, whereas an

38

executive starting salary is US$1000 and a department head is paid US$2,000 (Panama Offshore

Legal Law Firm).

Recruitment and Selection

Because the employment market is closely regulated, Blezoo should avoid expatriates

and hire local talent. Choosing an employee will have to depend on their fit with Blezoo as well

as the company they partner with in Panama. Sending a current employee to train the new staff in

Panama would be the best method. This will allow Panamanians to learn first hand how Blezoo

operates in the US. This will also allow Blezoo a first hand sight on operations in Panama. As

well as the opportunity to get and give immediate feedback on what is working and what is not

working. Over time Blezoo should consider sending each employee over to Panama. Not only

will this give everyone an insight on how business is run their but it will give Blezoo a first hand

look on their operations in Panama.

Although there are a lot of job banks, we feel the best place to search for employees

would be a local university. Florida State University would be an ideal school to recruit workers

from. The Panama campus offers a Business program, so it shouldn’t be difficult to find the type

of person you’re looking for. However, because students must complete the program at the main

campus in Tallahassee; Blezoo could recruit workers from the main campus (Panama –

International Programs). The potential future employees would have the possibility of seeing

Blezoo’s operations in the US before going back to Panama. Blezoo would be able to meet

multiple potential employees without the cost of either going to Panama. The employees they

chose to hire would be able to see the operations in the US while again avoiding the cost of

travel. Because the student is earning their degree in both a country that speaks English and one

that speaks Spanish; it is likely that the student will speak English and Spanish.39

The most important quality for the employee to be able to function properly between the

US operations and Panama is they will need to speak English and Spanish fluently.

Titles are important in Panamanian culture. A person with a title or education could make doing

business easier. Punctuality is also important in the culture and therefore a necessary quality. A

business background or education is also important to be able to effectively run the overseas

operations.

Conclusion

The research and observations offered by MMG, Inc. consulting firm is that of an

extensive strategic analysis of the Panamanian culture and workplace environment. It is the

research compiled within this project that has enabled a complete and successful formulation of

entry and establishment into the country of Panama. MMG, Inc. would like to thank Blezoo, Inc.

for the opportunity in aiding such an impressive business take a monumental step in international

development.

40

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Ferguson, Richard. "Doing Business in Panama | Panamanian Social and Business Culture." Communicaid. N.p., n.d. Web. 9 Apr. 2011. <www.communicaid.com/access/pdf/library/culture/doing-business-in/Doing%20Business%20in%20Panama.pdf>.

“How to Negotiate and Doing Business in Panama.” Global Negotiator. Global Marketing, 2011. Web. 11 Apr 2011. <http://www.globalnegotiator.com/tienda/doing-business-in-panama.html>.

“Intercultural Management in Panama.” N.p., n.d. Web. 11 Apr 2011. <http://www.kwintessential.co.uk/intercultural/management/panama.html>.

International Benefit Network. “Panama – an overview of employee benefits.” International Benefit Network. N.p., Dec. 2008. Web. 4 Apr. 2011. <http://www.intlben.com/profiles/benefits-panama.pdf>.

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"Market Research & Competitor Benchmarking." Export to Panama. Copernicus      Consulting , 11 Apr. 2011. Web. 11 Apr. 2011.      <http://www.exporttopanama.com/service-details.asp?id=4>.

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