Type of paper: Research Paper

Topic: Business, Politics, Government, Environment, Oil, People, Nature, Law

Pages: 9

Words: 2475

Published: 2020/12/17

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International Business

Executive summary
The present paper sheds light on country profiles of Ethiopia and Norway, along with a discussion of their cultural characteristics on Hofstede’s dimensions. The country profiles include PEST-C and suitable business proposition for each country.
Later, it is also analysed as to which business should be commenced in tandem by both the nations, based on their current economic, social, political and legal conditions.

Section 1

Section 2
Section 3
Section 4
Section 5
SECTION 1 - COUNTRY A: Ethiopia
Introduce country _____/1
Ethiopia, officially named as Federal Democratic Republic of Ethiopia is Africa’s oldest independent country and the second most populated. The nationality of people is Ethiopian.
People speak different languages like Oromo, Amharic, Somali, Tigrigna, English, Arabic and many more. The Ethiopian flag is of three colors which are organized in horizontal bands and a yellow pentagram at the centre and rays originating from the angles between the points on a light blue disk centered in the flag. The colors signify hope and fertility of land (green), justice and harmony (yellow) and sacrifice and heroism (red). The centered pentagram represents unity and equality of the Ethiopian and the blue disk represents peace. Ethiopia’s infrastructure comprises 24,000 kilometers of roadways, of which just 3,300 kilometers are cemented. Approximately all main roads are gravel roads, plus those that join Addis Ababa with major cities and towns across the country. BBC News (2014)

Political environment _____/1
Ethiopia is a federal republic country in which the powers of the central government are confidential and the component parts like states, colonies, or provinces keep a degree of self-government; final sovereign authority rests with the voters who select their governmental representatives.
The President of the country is Mulatu Teshome Wirtu (2013) and the Prime Minister is Hailemariam Desalegn (2012). The President is elected by both chambers of Parliament for a six-year term and the Prime Minister is nominated by the party in authority followed by legislative election. The last election held was on 23rd May, 2010 and the next upcoming election will be in 2015.
The Political parties in this country are Ethiopian People's Patriotic Front or EPPF, Ogaden National Liberation Front or ONLF, Oromo Liberation Front or OLF [DAOUD Ibsa] Info Please. (n.d)

Legal environment _____/1

The constitution was latest formed in June 1994, then was adopted in December 1994 and was applicable from August 1995. The civil law system is followed in this country.
The law of ethnic federalism is allowing the customs to flourish. Along with ethnic federalism, political parties have cooperated with the tribes and neighbourhoods.

Economic environment _____/1

The growth of GDP is very high. The GDP per capital was $1300 in 2013 which is comparatively lowest in the world.
The labor force in this country is 45.65 million in which 85% is dependent upon agriculture.
The unemployment rate is 17.5% only but population below poverty line is 39%. The inflation rate is 8.4% (2013 report).
The total investment in industry’s fixed assets like machinery, equipments, factories etc is 26.8% (Gross Fixed).
Country’s economy is in bad shape as country budget express revenue $6.702 billion and expenditure is $8.042 billion as per 2013 report.

The five-year economic plan has reached high single-digit growth rates through government-led infrastructure extension and viable cultivation development.

Ethiopia in 2014 will sustain construction of its Grand Renaissance Dam on the Nile – a notorious five billion dollar effort to produce electricity for domestic utilization and export Info Please. (n.d)

Business environment and activities _____/1

Ethiopia’s main earning source is agriculture but now the country is expanding in manufacturing, textile and energy generation.
The main export crop is Coffee but poor cultivation practices and frequent droughts are threats for the country. The government has joined hands with donors for converting threats into strengths.
The banking, telecommunication and micro-credit industries are used only by domestic investors but now the country is also attracting foreign investment in leather, textile, manufacturing and commercial agriculture.
All lands are owned by the Ethiopia’s authority and are provided on long-term lease basis to tenants. Info Please. (n.d)

Analysis of exports and imports _____/1

The products which are exported are coffee, khat, gold, leather products, live animals, oilseeds and the export partners are US, Belgium, China, Germany and Saudi Arabia.
The products which are imported are food and live animals, machinery, motor vehicles, petroleum and petroleum products, chemicals, cereals, textiles and import partners are Saudi Arabia, India, China and the US. Info Please. (n.d)

Balance of payments and exchange rates _____/1

The overall US dollar amount of commodities exports on an f.o.b. (free on board) basis is $3.214 billion and the total US dollar products imports on a c.i.f. (cost, insurance, and freight) or f.o.b. (free on board) basis is $10.68 billion. The monetary term is called ‘birr’ in this country and the exchange rate is birr (ETB) per US dollar - 19.92 (2013 est.)  Info Please. (n.d)

Social environment and demographics _____/1

The land area of the country is 1,119,683 sq km and total area is 1,127,127 sq km. Total renewable water resources are 122 cu km.
The population according to 2014 survey is 96,633,458 with growth rate of 2.89%. The literacy rate of total population is 39%.

The climate in Ethiopia is humid monsoon with wide topographic- induced deviation.

The natural resources available in this country are small reserves of platinum, gold, copper, hydropower, potash and natural gas. The natural hazards that country faces are earthquakes, frequent droughts and volcanic eruptions as per geographically active Great Rift Valley. Info Please. (n.d)

Technological environment _____/1

Ethiopia’s transport network is fairly inadequate and needs both improvements and development.
The telecommunications system is also under-developed, even by African values. Service is unpredictable and determined overwhelmingly in Addis Ababa.
A bright mark is Ethiopian Air Lines, which delivered resourceful and consistent service domestically and internationally and supply continuation and training for some other regional carriers.
Ethiopia has no major traversable waterways, although limited transport service is accessible on Lake Tana. The Abay (Blue Nile) is not passable within Ethiopia’s boundaries.
Ethiopia has two global airports in Addis Ababa and Dire Dawa. Bole International Airport in Addis Ababa holds 95 percent of the entire international air travel and 85 percent of national flights.
Ethiopia had some 435,000 cellular phone lines in use. There were 122,000 mobile phone operators in Ethiopia. Info Please. (n.d)

Cultural Environment _____/1

In Ethiopia, the authority and the religions participate with each other. For every religion there is an authorization allowing that religion to be practiced in Ethiopia.
No cultural entity has been unaffected by others. Groups are biological and social combination of numerous preexisting entities.
The countryside has been able to sustain many of its older cultures. There have been slight changes in conditions of how the old practices are essentially carried out. This is because the nation has seen many other cultures come into the nation state. To administrate this nation, the administration introduced ‘ethnic federalism’ which was constitutionally protected in 1995. Info Please. (n.d)

Hofstede’s Country Characteristics

Power Distance Index _____/1
All individuals in the society are not identical and power distance index expresses the attitude of the culture towards these inequalities. This country scores 70 on this dimension as the country represents hierarchical order in which everyone has a position and which requires no rationalization. Hofstede (n.d)

Individualism/Collectivism _____/1

This country scores 20 and is considered a collective civilization. The society promotes strong associations where everybody takes accountability for fellow associate of their group. Employer/employee relationships are supposed in moral terms (like a family link) and hiring and endorsement decisions of the employee’s are taken in-group. Hofstede (n.d)

Masculine/Feminine _____/1

The country scores 65 on this dimension and is therefore a masculine civilization. People here“live in order to work”, managers are accepted to be significant and confident, the prominence is on justice, competition and presentation and conflicts are resolute by fighting them out. Hofstede (n.d)

Uncertainty Avoidance Index _____/1

In this index the country has to deal with natural disasters without trying to do anything for risk or crisis management. Ethiopia has scored 55 on this dimension. Hofstede (n.d)

Long-Term Orientation _____/1

In this dimension the country has to see how individual societies try to maintain some links with its own previous challenges for securing present and future and Ethiopia has no score in this term. Hofstede (n.d)

Realistic idea _____/1

Agriculture is the main business of Ethiopia as it provides employment to 85% of the population. The country should increase its export business of these products like coffee, oil seeds, cereals, fibre crops and others. Business opportunities exist in the agriculture sector but due to lack in telecommunication and transport facilities, this may face challenges. The business of exports will be the best for this country’s development.

Rationale and support _____/1

The most essential point to support the above premise is that Ethiopia is agriculture-based country in which maximum people satisfy their needs through farming. Coffee is a gift to the country as it is the most essential cash crop. Tea is also an essential crop for production, processing and export and Ethiopia’s tea quality is excellent. The agro-climate is favorable so it offer the nation people an opportunity for expanding their business in this area.

SECTION 2 - COUNTRY B: Norway

Introduce country _____/1
Europe's northernmost nation, the Kingdom of Norway is famous for its mountains and fabulous sound shoreline, as well as a maritime authority. The natural resources available in this country are petroleum, natural gas, iron ore, copper, lead, zinc, titanium, pyrites, nickel, fish, timber, and hydropower. The natural hazards that country faces are rockslides and avalanches. The capital of Norway is Oslo. BBC News (2011)
Political environment _____/1
The Government is constitutional monarchy- a system in which a ruler is directed by a foundation whereby his/her rights, duties, and responsibilities are predicted out in written law or by custom.
The Chief of state is King HARALD V (since 17 January 1991) and the Prime Minister is Erna SOLBERG (Since 16 October 2013). The last election was held on 9th September 2013 and next will be September 2017.
The Political parties in this country are Center Party or Sp [Liv Signe NAVARSETE] , Christian Democratic Party or KrF [Knut Arild HAREIDE] , Conservative Party or H [Erna SOLBERG] , Labor Party or Ap [Jens STOLTENBERG] , Liberal Party or V [Trine SKEI-GRANDE] , Progress Party or FrP [Siv JENSEN] and Socialist Left Party or SV [Audun LYSBAKKEN] Index Mundi. (n.d)
Legal environment _____/1
The constitution was formed in 1814, then was adopted in 16 May 1814 and signed by constituent assembly on 17 May 1814 and was amended many times. The legal system country follows is a combination of many civil, common and customary laws.
Economic environment _____/1

The Norwegian financial system is a flourishing economy, having a mixed combination of private sector and widespread social security net.

Important areas, like petroleum sector, are under government control through state-majority-owned ventures and regulations.
After hard GDP growth in 2004-07, the financial system slowed in 2008, and slender in 2009, before returning to optimistic growth in 2010-13. Yet, the government financial plan remains in surplus.
The growth of GDP is very high and was 282.2 billion in 2013. The GDP per capital was 55,400$ in 2013.
The labor force in this country is 2.707 million, unemployment rate is 3.6% in 2012 and inflation rate is 1.9% (2013). Index Mundi. (n.d)
Business environment and activities _____/1

Norway is the world's third biggest natural gas exporter; and seventh biggest oil exporter.

Natural resources are found in abundance here. The petroleum sector accounts for major government revenues. Index Mundi. (n.d)
Analysis of exports and imports _____/1
Primary products exported from this country are petroleum and petroleum products, machinery and equipment, metals, chemicals, ships, fish and export partners are UK, Germany, Netherlands, France and the US. The products which are imported are machinery and equipment, chemicals, metals, foodstuffs and import partners are Sweden, China, Denmark, The US and the UK. Index Mundi. (n.d)

Balance of payments and exchange rates _____/1

The overall US dollar amount of commodities exports on an f.o.b. (free on board) basis is $154.2 billion and the total US dollar products imports on a c.i.f. (cost, insurance, and freight) or f.o.b. (free on board) basis is $90.14 billion. The monetary term used in this country is Norwegian kroner (NOK) and exchange rate is Norwegian kroner (NOK) per US dollar - 5.802 (2013 EST.) 

Social environment and demographics _____/1

The mother tongues that are spoken are Norwegian Bokmål, Nynorsk and Sami.
The total area of the country is 323,802 sq km in which land area is 304,282 sq km and water area is 19,520 sq km.
The population according to 2014 survey is 5,147,792 with growth rate of 1.19%. The literacy rate of total population is 100%.
The climate in Norway is temperate alongside shore, colder central with increased rainfall and colder summers and drizzling year-round on west coastline.

Technological environment _____/1

On technology front, the country is still developing. Telephones are the primary source of communication with increased penetration of cellular phones. Public radio is the prevailing broadcast media and railways and roadways are also spread across significant distances, connecting major cities and towns. Index Mundi. (n.d)

Cultural Environment _____/1

Norway’s culture sustains its ancestry from the old age. Their natural environment is closely related with people that have many outside social activities.
Customs and events happen throughout the year, along with the Norwegian cultural tradition of good atmosphere, harmony and cooperation that continues to flourish. 
Norwegian civilization is based on morals such as democracy and freedom of appearance and characterises a strong sentiment of justice and egalitarianism.
Informality of conduct and conversation, reliability and getting powerfully to the tip are normally Norwegian, alongside with humility, keeping peaceful and not screening strong emotions.
“Vorspiel” and “Nachspiel” plays a significant element of each young Norwegian’s social life.  The past time refers to a pre-party when a few people meet at someone’s place to converse and have drinks prior to going out to a pub or club, while the last is the after-party that carry on the merriment, often long-lasting until the morning hours.
Marriage is not essential in Norway, and it is general for people to live mutually without being married. Cohabitation is in fact perceived as a type of association related to marriage and as acceptable as marriage.
There is a little group of individuals who pursue the traditional structure of commitment – church weddings; typically they are people with a religious environment. Most of the people nowadays prefer to marry in a civil formal procedure. Single or divorced parents with children advantage from a big-hearted social safety that consists in additional child settlement and special tax allowances.  Index Mundi. (n.d)

Hofstede’s Country Characteristics

Power Distance Index _____/1
This country scores low on this dimension (31) which shows that people are independent, have equal rights and are empowered. Here power is decentralized and they work in a team. Employees are given equal chance to participate in decisions. The manger and employees have informal relationship. Hofstede (n.d)

Individualism/Collectivism _____/1

The score is 69 and is considered an individualistic civilization. Here the individual “self” is precious and they give importance to their own value and opinions. They have clear line between profession and personal life. Hofstede (n.d)

Masculine/Feminine _____/1

The country scores 8 which mean that it’s the second most feminine society. Societal unity in life is significant; motivation such as free time and elasticity are preferred, communication through dialog is valued and personality growth along these conditions welcomed. Spotlight is on well-being, position is not publicized. An efficient administrator is an encouraging one, and decision making is done through employees’ participation. Hofstede (n.d)

Uncertainty Avoidance Index _____/1

The capability of society to face uncertainty in this country is 50, which indicate that there are no essential steps taken on this dimension. Hofstede (n.d)

Long-Term Orientation _____/1

In such societies people have a concern with establishing the absolute truth; they are normative in thinking so score on this dimension is 35. Hofstede (n.d)

Realistic idea _____/1

Norway’s capital and prosperity over the previous four decades has been build on oil and now Norway will move towards a greener future that relies on renewable energy, shared transport and ultra-efficient housing. Also, Norway is full of natural resources like oil and natural gas so doing business in the area of energy will convince investors.

Rationale and support _____/1

Norway’s oil resources attract and keep new industries to come into the country and now greener future also give an opportunity for investor to invest in this country. Though oil industry salaries are high and oil companies dominate the Norwegian share market; the Innovative Norway Scheme provides access to financial funds and support schemes to new business ideas which will make the above premise successful.
SECTION 3 – What type of business do you suggest to develop between COUNTRY A and COUNTRY B? Support your idea with the research you have gathered to complete this assignment. __/4
Norwegian-Ethiopian relationships are comprehensive. There expansion cooperation gives main concern to the development of clean energy, mainly hydropower. 90 per cent of electrical energy production in Norway country is from hydropower, so country can share their resources with Ethiopia. From the Ethiopian administration increased trade and venture is seen as vital to strengthen economic development. Norwegian companies could be more energetic in Ethiopia and can strongly involve in the matter.
Additionally and as a supplement, both the countries should support the education sector in Ethiopia. Foreign Minister visited Norway in last few years and there is harmonious relationship between two countries, to strengthen the power of people, Norway need to support them in education in different areas, climate change, including trade and investment.

SECTION 4 – REFERENCES __/4

BBC News. (2011). Norway Country Profile. Retrieved March 8, 2015 from <http://news.bbc.co.uk/2/hi/europe/country_profiles/1023276.stm>.
BBC News. (2014). Ethiopia Country Profile. Retrieved March 8, 2015 from < http://www.bbc.com/news/world-africa-13349398>.
Geert Hofstede. (n.d). The Hofstede Centre. Retrieved March 8, 2015 from <http://geert-hofstede.com/countries.html>.
Index Mundi. (n.d). Norway. Retrieved March 8, 2015 from <http://www.indexmundi.com/norway/>.
Info Please. (n.d). Ethiopia. Retrieved March 8, 2015 from < http://www.infoplease.com/country/ethiopia.html?pageno=7>.

SECTION 5 – Grade tally

Misc.
Strict Adherence to APA Format _____/2
Report Appearance/readability _____/1

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