Doing Business with Latin Americans Mexico and Brazil

12 Doing Business with Latin Americans Mexico and Brazil A. LEARNING OVERVIEW Latin Americans, whether from Venezuela, Brazil, or Chile, share certain things. Yet, many important differences also exist between the cultures. We now focus on the multicultural environment in the southern half of Pan America. We start with a brief reference to the area s aboriginal peoples. Instructors would do well to remind students or trainees that Indian cultural influences are significant in many Latin populations, such as those of Mexico, Bolivia, and Peru. The geographic land mass of more than eight million square miles under consideration is divided into three components for cultural analysis. The first section on Mexico is presented to give readers a flavor of the country and its cultures. Next, the focus moves to an in depth profile of Brazil. The analysis moves to the cultural themes in Latin America. A few tips for instructors to consider: 1. Underscore that in addition to the Indian and African cultural heritages, the Spanish cultural influence dominates Latin America except in Brazil where Portuguese language and culture prevails, or in a few smaller former colonies of the French, Dutch, or English. Also note the heavy European cultural impact on South America, particularly in Brazil, which also benefits from a large Japanese ethnic group. 2. Emphasize the Latin American cultural customs, themes, and patterns that go across the many states in the area; a foreign visitor s sensitivity to such attitudes and practices will facilitate friendship and business with the locals. 3. Latin America represents a huge potential market. Its diverse citizenry are generous and hardworking, but many countries experience: 12-1

Severe overpopulation and poverty. Major deficiencies in the health and education of the masses. A class system of largely poor peasants and elite rich, though a middle class is growing. A fragile infrastructure in need of economic development; the widespread influence of corruptive and destructive drug cartels, particularly in Colombia and Peru, further threatens economic, political, and social institutions in the region. South America responds to North American market demands. For the drug crop to be replaced by more legal agricultural endeavors, farmers would need economic assistance, and the North American consumer demand for illegal drugs would have to be radically curbed. We remind instructors that in being realistic with culture-specific briefings, the major newspapers and national magazines or international periodicals are a continuing source of contemporary information if one is sensitive to the cultural implications of their stories. B. GROUP ACTIVITIES 1. Consider each of the following ten mini-cases from Case 5: NAFTA Best Practices Case Studies at the end of the Group Activities section. Appoint ten teams and assign one mini-case to each team for analysis, discussion, and study of cultural implications. Ask each team to report their findings to the group. 2. The subject matter in this chapter lends itself to a field trip. The assignment would be for teams to visit a nearby predominantly Latin community or resource, reporting back to the total group on their findings relative to family and social relations; language and communication patterns; work/play habits and customs. A field team could sample Mexican food and fiestas, visit Hispanic churches and even talk to refugees from El Salvador or Nicaragua, interview migrant workers or illegal factory workers and maids. By putting on culture glasses and using imagination, one can plan an interesting field trip that taps into the local Latin resources, ranging from professors of Latin American studies at nearby universities to Latin music, art, and book collections in museums and libraries. 3. Role-play this situation: You are appointed by the White House to a citizen commission on Central America. In this capacity, you are to recommend to the President (your instructor in this case) what cultural factors inhibit economic development for the peoples in that region. 4. Simulate this situation: You are appointed to a task force established by the director of the Peace Corps. Your mandate is to review the Corps opportunities during the next decade for voluntary service in the countries of South America. What should the task force s principal recommendations be? 5. Role play this situation: Choose one person from the group who is typically North American in background and select another who is more representative of a Latin American background. They are both attorneys, but educated in two different legal systems the former under the American-British Common Law; the other under the Napoleonic Code of Law in Mexico. They both work for the same multinational corporation the former is in the North American division, the latter in the South American division. Their company manufactures pharmaceuticals and they are meeting to deal with a mutual corporate problem. Officials in several Latin govern- DOING BUSINESS WITH MIDDLE EASTERNERS 12-2

ments and community health organizations have been complaining of the company s dumping outdated and possibly harmful drugs in their Latin markets. How might they try to resolve this situation given their cultural differences as summarized in Exhibit A? (The pair is to study this material together and come back to the class with a dialogue of their possible conference conversation and viewpoints.) 6. Simulate this situation: You are appointed as an advisor for a Taiwanese company that is to negotiate with a Brazilian company on setting up a joint venture in Brazil. What would you suggest to the team that will be sent to Brazil in two weeks time to get them culturally prepared for the negotiation? 7. Role-play this situation: You are a Japanese manager working in Mexico s maquiladora ventures, where you manage Mexican employees. Do you think that you can transfer the Japanese management style to this operation? How would you cultivate company loyalty, deal with labor dispute, handle layoff, provide incentives for employees, promote employees, and so on? 8. Divide the learners into pairs to conduct an interaction in which the learners take turns playing the role of a European and a Latin American involved in a business situation/meeting. Simulate a business interaction in which you present your business cards to one another, greet and salute one another, discuss the issue at hand, and close the meeting. In following the cultural norms of a Latin American and a European (western, central, northern, eastern, or southern), what difficulties did you have in communicating with one another? Did you gain one another s respect so you were able to conduct a favorable business interaction? Trade places and pay attention to what you do differently this time in order to achieve the most beneficial results for both parties. 9. Divide students into groups, assigning each group a different Latin American country. Using the twelve-step framework for successful international business negotiations proposed in the MCD Chapter 3, ask the groups to research and develop as an outof-class exercise a complete definition for each of the variables as they pertain to the country they have been assigned. An example is provided in this chapter on Mexico. On the day the groups are required to submit their projects, the instructor might lead a class discussion to explore differences and similarities that exist between the recommendations for the various countries. Each group should provide copies of its findings to other groups for use as a future professional reference tool by class members. 10. Spanish Telecommunications Company TISA (Telefonica Internacional S.A.) has played a role in the telecommunications privatization efforts in Argentina, Chile, Peru, and Venezuela, and in early 1996 made an investment in Alestra, a new telecommunications company being formed in Mexico with US and Mexican partners. Ask students to discuss in groups the impact that increasing regional integration, specifically the improvement and integration of telecommunications, will have on Latin America. Another topic for students to discuss would be the cross-cultural challenges posed by a truly Pan-American business strategy. What are areas where Latin Americans from numerous different countries working together may encounter cross-cultural difficulties? Where might synergies be found? 11. Stereotyping is common in all parts of the world, and certainly exists between and among the people s of Latin America. Stereotyping is an impediment to the creation of cross-cultural synergies because it focuses on differences and seeks to exclude people who are different. It is not typically based on direct, personal experiences DOING BUSINESS WITH LATIN AMERICANS MEXICO AND BRAZIL 12-3

obtained by global managers, rather on an unreliable group of historical references and cultural or racial biases. Students working in groups should be asked to develop a list of all the stereotypes they harbor, or feel are commonly shared by members of their society, against other Latin Americans of different nationalities, ethnicities, religious affiliations. After they have listed the stereotypes associated with each group, they should be asked to explain why such attitudes exist, and whether they are based on direct personal experiences or biased historical legends. Also, students should consider what stereotypes exist about their own country. Doing Business with Latin Americans Mexico, Central and South America. C. DISCUSSION QUESTIONS 1. Latin America has the oldest republics and universities in this hemisphere. Discuss the historical and cultural origins as well as the consequences of the following developments. a. Latins respect a strong, authoritarian father in the family, and may transfer that cultural tendency to the national father figure. b. A widespread shift has occurred in Latin America away from military regimes toward democratic governance and civilian rule. c. Latin American higher education is generally elitist, places overemphasis on the humanities to the neglect of science/technology, and graduates primarily lawyers, doctors, and engineers. d. Latin America is ripe for class struggles because of social injustice and inequities in the distribution of wealth and material resources. e. Latin America has been subject to numerous military or political interventions by the United States and is resentful, especially when positive programs for economic cooperation do not succeed or are weak in impact (for example, Alliance for Progress and the Organization of American States). 2. How do North and Latin Americans differ in the sense of: a. Family b. Manhood/womanhood c. Courtesies d. Formalities e. Hospitality f. Time g. Joy and feelings h. Fatalism and death i. Pleasantries j. Privacy k. Space l. Work/business 3. Discuss your experiences with Latin peoples at home or abroad. What do you admire about their cultures? What frustrates you in their cultures? What contributions have Latin cultures and peoples made to North America? In what ways do North American behavior and policies offend Latin Americans? DOING BUSINESS WITH LATIN AMERICANS MEXICO AND BRAZIL 12-4

4. In the MCD text there is mention of a Profile of Latin America that appears in a companion book of this series entitled Multicultural Management 2000. Assign students/ trainees to read that Appendix A and undertake these tasks: a. Reproduce and distribute to your class/group, The Cultural Test of Mexico that appears there on pages 276 280. Each person is to complete this selfassessment for a discussion on its implications. b. Read there The Case of Argentina on pages 281 284. Reproduce Argentina: A Profile on page 282 and distribute it to the class/group. Discuss with the total audience what they learned in that case that relates to MCD Chapter 11. 5. He never had a maid and washes his own socks and underwear. (Financial Times, September 28, 2002, p. 22) This refers to Luiz Ignacio Lula de Silva or Lula as he is known, the President of Brazil. Discuss what this might mean in terms of his political philosophy. 6. Pablo Tesak s Diana S. A., one of the leading snack food companies in Central America, captured the snack food market by tailoring its product to the local tastes of the people and making it affordable for Central Americans. He also developed a paternalistic company culture and implemented programs to improve the quality of life for employees. Tesak contributed toward rebuilding the society while simultaneously achieving successful growth of the business. Discuss how a European organization could contribute to the improvement of the Central American society while increasing market share for the company. If manufacturing facilities were located within Central America, what type of a corporate culture would you choose to develop? What particular Latin American cultural characteristics would you need to pay special attention to as you develop a business plan and a performance management system? 7. What are some impediments that currently exist to the expansion of free trade in the western hemisphere, leading to a Free Trade Area of the Americas? 8. If increased free trade and regional integration in the western hemisphere were to require certain Latin American countries to alter the nature of their system of tariffs and preferences in a way that was unfavorable to their trade with European or Asian nations, which Latin American countries might oppose such requirements? Why? 9. What characteristics are shared by those Latin American countries for which intraregional Latin American trade is more important than trade with other major trading blocs? What explains this balance of trade? 10. Where might a global Latin American manager in your country or local area go to obtain the resources and information that would allow him to improve cross-cultural skills needed for recognizing and capitalizing upon potential synergies between his country/culture and those of other individual countries from other major world regions or trading blocs? 11. What are the major cultural differences between Latin American countries? What are they based on? Ethnicity? Language? Religion? Level of economic development? DOING BUSINESS WITH LATIN AMERICANS MEXICO AND BRAZIL 12-5

EXHIBIT 12-1 INTER-AMERICAN CULTURAL CONTRASTS IN BUSINESS Aspects* of U.S. Culture Alternative Aspects of Latin Examples of Business American Culture Functions Affected The individual can influence the Life follows a preordained course Planning, scheduling figure where there is a will, and human action is there is a way. determined by the will of God. The individual can change and People are intended to adjust to Work and motivation improve the environment. the physical environment rather planning. than to alter it. An individual should be realistic Ideals are to be pursued Goal setting. in his aspirations. regardless of what is reasonable. We must work hard to Hard work is not the only Motivation and reward accomplish our objectives prerequisite for success; system. (puritan ethic). wisdom, luck, and time are also required. Commitments should be A commitment may be Negotiating and honored (people will do what superseded by a conflicting bargaining. they say they will do). request, or an agreement may only signify intention and have little or no relationship to the capacity of performance. One should effectively use his Schedules are important but only Long-and short-range time (time is money, which in relation to other priorities. planning. can be saved or wasted). A primary obligation of an The individual employee has a Loyalty, commitment, employee is to the primary obligation to his and motivation. organization. family and friends. The employer or employee can Employment is for a lifetime. Motivation and terminate their relationship. commitment to the company. The best qualified person Family considerations, friendship, Employment, should be given the position and other considerations promotions, recruiting, available. partially determine employment selection, reward. practices. A person can be removed if he The removal of a person from a Promotion. does not perform well. position involves a great loss of prestige and may only rarely be done. All levels of management are Education or family ties are the Employment practices open to qualified individuals primary vehicles for mobility. and promotions. (an office boy can rise to become company president). *Aspect here refers to a belief, value, attitude, or assumption that is part of a culture. It is shared by persons in any culture. DOING BUSINESS WITH LATIN AMERICANS MEXICO AND BRAZIL 12-6

Intuitive aspects of decision- Decisions are expressions of Decision-making process. making should be reduced wisdom by the person in and efforts should be authority and any questioning devoted to gathering would imply lack of confidence relevant information. in his judgment. Data should be accurate. Accurate data is not as highly Record-keeping. valued. Company information should Withholding information to gain Communications. be available to anyone who or maintain power is needs it within the acceptable. organization. Each person is expected to have Deference is to be given to Communications. an opinion and to express it persons in power or authority, freely, even if his views do and to offer judgments not in not agree with his colleagues. support of the ideas of one s superiors is unthinkable. A decision-maker is expected to Decisions may be made by those Decision-making. consult persons who can in authority and others need contribute useful information not be consulted. on the area being considered. Competition stimulates high Competition leads to unbalance Promotion. performance. and to disharmony. A person is expected to do Various kinds of work are Assignment of tasks, whatever is necessary to get accorded low or high status performance, the job done (one must be and some work may be below organization. willing to get his hands dirty). one s dignity or place in the organization. Change is considered an Tradition is revered and the Planning. improvement. power of the ruling group is founded on the continuation of a stable structure. What works is important. Symbols and the process are more Communication, important than the end point. organization, planning. Persons and systems are to be Persons are evaluated but in such Rewards, promotion. evaluated. a way that individuals not highly evaluated will not be embarrassed or caused to lose face. DOING BUSINESS WITH LATIN AMERICANS MEXICO AND BRAZIL 12-7