This document, a group presentation effort by SDMIMD students including me, was meant to be an assignment for the Capstone course. This will help marketers make a business entry decision into Singapore.

1. Singapore Inc.

2. Agenda
• We are going analyze Singapore’s culture and
economy with various frameworks
• After applying various frameworks we are
going to assess their implications on a firm
which wants to set up a business in Singapore
• Come to a conclusion about the suitability of
the reforms suggested in the case

3. Country Background
• Population consists of three main ethnicities
– Chinese (76.5%)
– Malay (13.8%)
– Indian (8%)
• In 1824 it became a colony of East India Co.
through Anglo-Dutch Treaty and cash
payments to Sultanate.
• In 1942 British surrendered it to Japan and
regained its control in 1945

4. • On August 9 1965 Singapore became an
independent nation
• Most of the culture of Singapore was created
in years after its independence.
• After independence economy of Singapore
was in a very bad shape with 14%
unemployment rate
• Singapore sought to define itself as “First
world oasis in a third world region”.

5. PESTEL Analysis
Singapore V/S China

6. Political
Singapore China
Bureaucratic, extremely centralized &
socialist in approach (free housing)
Socialist per se & extremely centralized
Government is stable Government is stable
Invited foreign investment , no import
duties on 99% of imports
Relatively less open and only recently
the government is showing interest in
opening up
Government has severe laws in place
and due to strict governance and
associated fines less corruption
Government has very strict laws, in
fact human rights are questioned in
State. Corruption is vehement in
society
Conclusion – It is easier for firms to establish in Singapore than
China as they have government support.

7. SINGAPORE
CHINA

8. Economic Analysis
Singapore China
Economic Freedom score-2 Economic freedom score -51
GDP-USD 222,872.48 million GDP-USD $7.9 trillion
Fiscal & monetary policy are aimed at
attracting foreign investment , taxation is
moderate , corporate tax of 17 %
More subsidies to domestic companies
compared to foreign companies ,
corporate tax – 25 %
•Unemployment – 2.2 %
•Inflation-2.8 %
•FDI Inflow-0.364 billion
•Unemployment –4.2 %
•Inflation- 5.9%
•FDI Inflow-$ 108.3 billion
The scale of operation and growth opportunities are constrained in case of
Singapore even when policies are liberal owing to limited country size and
therefore availability of factors of production

9. Overall Score

10. Trade freedom

11. Social Analysis
Singapore China
Distribution of wealth- 0.425 Distribution of wealth-0.4
Literacy rate- 95.9% Literacy rate-91 %
Population division skewed
•15% population less than 15
•75% population 15-65 years of age
•10% population above 65
Population is skewed with less birth due
to governments one child policy
•20% population less than 15
•71% population 15-65 years of age
•9% population above 65
The condition in China as well as Singapore is almost the same because people see
government as oppressive in China things are comparatively bad but Singapore has
other threats like communal violence because of which government is always on the
back foot and impose strict norms .

12. Technological
• Both the countries invest heavily in
technology
• Singapore has admitted that they cant
compete China in technology, R&D efforts but
can benefit from same by hiring human
resource

13. Legal
• Both the societies have strict norms
• Singapore is better as rules are followed by all
• Corruption level is one of the lowest in
Singapore Corruption Perception Index 9.2/10
• China ranks 72nd out of 179 countries in
Transparency International’s Corruption
Perceptions Index. Of 3.6/10
• Employee policy favours firms in Singapore

14. Environment
• Both the countries have taken the issue pretty
seriously
• Singapore has one of the worlds best solid
waste treatment system in place
• Emphasis on recycling, optimum usage etc. is
encouraged as by nature the faces constraint
in natural resources which includes even
water

15. Political Risk Analysis
Government Risk Instability Risk
Firm specific  Discriminatory
regulations
 Creeping expropriation
 Breach of contract
 Sabotage
 Kidnappings
 Firm-specific boycotts
Country level  Mass nationalizations
 Regulatory changes
 Currency
inconvertibility
 Mass labour strikes
 Urban rioting
 Civil wars
Some regulatory changes are on the way, to sustain the growth.
Race, religion relations- a sense of tension prevailing.
Strict Law
enforcement
Stable, Long
standing
Government
Government is strictly observing
the developments in these areas

16. Rostow's stages of economic
development

17. 4 A Framework
Is regulation
important to
firm?
Is firm relatively
powerful?
Is firm relatively
powerful?
Alter
Ally
Avoid
Accede
YES
NO
NO
YES
NO
YES

18. Hofstede’s cultural dimensions
• Power Distance – extent to which juniors accept higher power
– Predominantly Confucian (Chinese population), emphasizes mutual
and complimentary obligations
– Power is centralized, juniors depend on bosses and rules
– Control is expected and attitude towards superiors is formal
– Nation before community and self

19. Hofstede’s cultural dimensions
• Individualism – ‘I’ or ‘We’
– Collectivistic, belong to in-groups and expect loyalty
– Paying respect, ‘saving everybody’s face’ important
– Politeness takes precedence over honest
feedback, ‘yes’ doesn’t necessarily mean ‘yes’

20. Hofstede’s cultural dimensions
• Masculinity – ‘be the best’ or ‘do what you like’
– On feminine side: consensus, sympathy for underdog
– Modest & humble; “Know-it-alls” frowned upon
– Conflict avoided, being cautious is important

21. Hofstede’s cultural dimensions
• Uncertainty avoidance – extent of risk aversion
– Uncertain, ambiguous situations bring anxiety
– Fines imposed for everything
– “Singapore is a ‘fine’ city”
– Dependence on US being reduced

22. Hofstede’s cultural dimensions
• Long term orientation – future oriented
– Perseverance valued
– Importance of saving for retirement
– Explains the low corruption levels

23. Hall’s cultural factors
• Context
– High context culture, a piece of information can
have different meanings unless additional
information is provided to decode
– Polite, respectful, integrates by
similarities/harmony, not direct
• They feel people from other low context
cultures are impolite, “cannot read between
the lines”, naïve, no self discipline, too fast

24. Hall’s cultural factors
• Time
– Monochronic culture, consider time as money
– Tasks processes sequentially and consecutively
– Long term time planning
• Space
– Singaporeans seen as people with low territoriality
– For example, if a person in a subway happens to
doze of on another person’s shoulder, most do not
wake them up for the fear of embarrassing them

25. Turner &Trompenaar’s model

26. Turner &Trompenaar’s model
• Universalism versus particularism
– Singaporeans are universal, hence the fines for
everyone
– Tend to use contracts, formal systems, and
procedures to convey what they expect from others.
• Affective versus neutral
– Highly neutral
– Emotions not expressed openly and naturally; subtle

27. Turner &Trompenaar’s model
• Specific vs Diffused
– The degree to which responsibility is specifically
assigned or is diffusely accepted
– Whole is the sum of its parts
– Singapore is a diffused culture
– Relationships between elements are more
important than individual elements

28. Turner &Trompenaar’s model
• Inner Directed versus Outer Directed
– Do we control our environment or work with it?
– Singaporeans would rather control the
environment, hence inner directed
– Believe the environment can be controlled
– Cleaning of the river and reduction in carbon
emissions over the years testimony to this

29. Turner &Trompenaar’s model
• Achieved Status versus Ascribed Status
– Do we have to prove ourselves to receive status or
is it given to us?
– Singapore – gives more weight to ascribed status
– Which means, status is bestowed upon them and
not dependent on individual achievement

30. Global political risk index

31. Ease of doing business

32. Tight v Loose Culture
• “Tight” cultures have many strong norms and a low tolerance
of deviant behavior whereas “Loose” cultures have weak
social norms and a high tolerance of deviant behavior
• From the case
– Anti-spitting campaigns
– Ban on the sale of chewing gums
– Levying heavier fines for littering and damaging public areas
– Caning for vandalism
• Also,
• Authorities can compel residents and tourists for random drug test
• Strict penalties for possessing/carrying arms or commit crimes with
them

33. Tight v Loose Culture
Source: http://dienekes.blogspot.in/2011/05/tightloose-culture-influenced-by.html

34. Tight v Loose Culture
• Research conducted by Michele Gelfand et al., who is a
Professor of Psychology and Distinguished University Scholar
Teacher at the University of Maryland, College Park
• Research further showed that a nation's tightness or
looseness is in part determined by the ecological and human
factors that have shaped its history
• Tight societies have more autocratic governments, more
closed media and criminal justice systems
• This means more monitoring and greater deterrence of crime

35. High Trust – Low Trust
High Trust Low Trust
Freedom of choice Orders
Flexibility Rules and Regulations
Self supervision Control, monitor, spying
Personal integrity
Internal turmoil(forced to do something
that is not believed in)
Proactive Reactive
Creative freedom Strict procedures and structures
Code of ethics Red tape
• Singapore is a low trust society
• High fines for misconduct, media censorship
• “A Nanny state”, highest per capita execution rates

36. HNO-PDI framework

37. Kluckhohn and Strodtbeck model
• Proposed before Hofstede’s model
• Lower acceptance due to non-quantifiable
measures
• Perception and data-based
• Managerial implications : Numbers and their
relevance
• Why this model can be applied?

38. Kluckhohn and Strodtbeck model
Dimension Values
1. The essential nature Good/evil/mixed
2. Relationship to nature Dominant/Harmony/Subjugation
3. Relationship to other people Lineal/Collateral/Individualist
4. Modality of human activity Doing/Being/Containing
5. Temporal focus of human activity Future/Present/Past
Singapore: “Mixed human nature orientation, in Harmony-with-
Nature, Lineal outlook based in a Future oriented culture that
focuses on Doing”

39. Business implications 1/2
• Put the greater national good over their own
personal growth objectives
– Businesses must significantly contribute to the
nation- growth and employment
• Increasing awareness of the need to be in
harmony with nature
– Green tech firms, pollution treatment, low carbon
footprints, low water consumption

40. Business implications 2/2
• Role of the central democratic, capitalist
government is very large
– Ownership patterns in the country - possibility of
taking them as large stakeholders
• Long-term value to the nation will be critical
– Shift in dependence among sectors
– Orientation towards firms that can make it a hub
for a major sector

41. A few observations
• Increase in direct investment outflow from 2000
to 2001 is from US$4.9B to US$10.2B
– Is the return commensurate with the investment?
• Negative growth in trade in the last year(Exhibit 12)
– GDP/Expenditure model
– Difficult to bank on that for short term growth
– Better to encourage consumption, since it has been
on the decline (Exhibit 5)
– Hence, personal income tax cuts a good measure
– GST collections will offset the loss in revenue

42. A few more observations
• Shift towards biomedical sciences a good
move considering they are planning to be an
“innovation nation”
• Total factor Productivity shows direct
correlation with GDP, hence the move to
improve TFP a good move