Canada’s Business Environment: Hofstede's Cultural Dimensions, Economic Risks - LACEDUP by LLAJ

Canada is the second largest economy in North America and is said to be one of most populated country in the world. Canada is also said to be one of the fastest growing retail markets globally as it is said to have an estimated growth rate of around 18.2 percent. Canada has a very vast and complex business environment that has brought many major changes in the trade sector. Canada is currently brough increase in skilled workforce by opening markets at every level and places increasing the business sector by promoting educational programs in the country. There is a lot of work done on the Research and Development side (R & D). A strong business environment is necessary to attract investors. Canada openly welcoming all types of investors have acted as the catalyst in the business of Canada and increased revenue up to great extent. (E., 2001).

LACEDUP by LLAJ is an Canadian based company that sells athletic shoes for sportsmen and women both, It was founded in 2008 and has its headquarters located in Toronto, Canada. It is a multinational company that is currently operational in many countries. Before we dive into the study of the establishment of LACEDUP by LLAJ in Canada, we must first analyze Canada’s economy in depth. (Rosenbluth, 1978).

1. The Hofstede's Six Dimensions of Culture was introduced by the renowned psychologist, Dr. Geert Hofstede in the 1970s. He proposed six dimensions as under.

2. Power Distance Index (high versus low): This refers to the level of inequality that is carried out and to what extend is it implemented and accepted. It addresses the fact that all individuals in a society are not equal. (Falcone, 1972).

3. Individualism V/S Collectivism: Collectivism refers to whether the people in the community are closely connected and concerned for each other. It determines whether a society is collective and hold themselves accountable for other peoples’ situations and outcome. In contrast, Individualism refers to the degree of independence an individual holds in a society.

4. Masculinity V/S Femininity: A more masculine society focuses on money and achievements while femininity is concerned with the quality of life and is more relationship orientated. Masculinity is concerned with an individual or society’s ego and their own aims and objectives.

5. Uncertainty Avoidance Index (high versus low): It is the degree of ease with which a society is able to cope with uncertainty and flexibility and the amount of anxiety accompanied with it.

Canada’s business environment:

6. Long- Versus Short-Term Orientation: It deals with the comparison between modest and pragmatic behavior compared to a more truthful, religious and nationalistic behavior. It refers to the way a country copes with future and present problems while keeping the past in mind.

7. Indulgence V/S Restraint: It focuses on the amount of autonomy given to pursue drives and gain gratification. Its contrary is restrictions of gratification and more strictness in social norms, conduct, and behavior.

In the case of Canada, the first dimension was difficult to predict as the average score was 55 as shown on the figure above. The less powerful people in the company had mixed reviews regarding the amount of difference in equality. In the second dimension, it was seen that Canada is a less collective society where not every individual takes other people into account. This includes their relatives, coworkers, family and friends. Cooperate relationships are perceived in moral terms such as family connections. Canada reached a tie in the Masculinity V/S Femininity domain. The society of Canada held a neutral stance as they care both about the quality of their life as well as their own personal achievements and goals. As far as the Uncertainty Avoidance Index is concerned, Canada scored very high as shown on the figure above.  People are opposed to liberal views. Rules are strictly followed and there is strong resistance to change. Punctuality is followed and security is an important everyday aspect . Canada encourages efforts both to cope with the future while keeping past efforts and values in mind, hence it is shown to not have a preference. The society of Canada is extremely non-indulgent. They perceive it negatively and do not lay emphasis on free time for relaxation and enjoyment.

The social structure of Canada is overall extremely rigid and orthodox.  It is mainly based on institutionalization and reverence of traditional figures of authorities. Significance is paid to the progress of the entire society and the will of the people. It is a highly male dominant society. In rural areas, formal employment was considered as an important step to socio-economic success.

Canada has a number of advantages such as an ideal strategic location, vertical genius population, a young and active population, low production cost, and low labor force cost. However, it has economic risks as well. Its GDP remains variable 1.5% growth rate . Based on an economical survey, Canada is ranked at 10th in the “World Economic Forum’s Global Competitiveness Index” and 8th in the “World Bank’s Ease of Doing Business Index” is terms of the countries with the fastest economy communication. It has a turbulent history with maximum investments in the past and red tape Canada allows investment from everywhere on the planet any country which wishes to open investment openly is welcomed by Canada. Canada has a number of competitors in the economic domain. The most important issue however, is immigration issues and accommodating them all in an organized manner. Canada faces a backlash from the other countries to openly welcoming immigrants that can have disastrous effects on new businesses. It can slow down the economic performance, discourage entrepreneurship, and the development of new businesses. Political calamity  also increases the economic growth. Maximum of the Canada population is shown to pay taxes. Canada also sometimes faces many natural disasters as well such as earthquakes, which hinders economic growth Overall, Canada has better infrastructure, energy shortage and a poor tax payment structure.