Despite a wealth of natural sources and a growing population, the country’s internal economic and political disruptions appear to have limited Brazier’s emergence as a global power. Still, as the second decade of the 21st century unfolds, Brazil stands as Latin America’s largest and richest country, and experts are still claiming the future belongs to Brazil. Despite a slowdown in the last couple of years, Brazil has been a remarkable success story in the last decade. Economic growth in the country has led to a rapid expansion of the middle class there from 66 million people in 2003 to 105 million in 201 1 (Hanna, 2012).
Per capita GAP grew at an 1 1. 8% compound annual growth rate between 2000 and 2011 (O’Neill, 2012). Building on its strong industrial base, with a wealth of natural resources, Brazil is expected to continue growing strongly in the coming years. As an analyst for an energy management firm, have noted for many years how Brazier’s rich energy resources are fueling growth. Though some believe the future now lies in Asia, Latin America is rich in the raw materials that Asia will require to fuel its demand.
As Latin America’s undisputed economic leader, Brazil is poised to benefit immensely from this true growth. The prospect of an emerging power in Latin America intrigues me, and I am glad to have the opportunity to explore the history, economy, and business culture of Brazil in the pages that follow. Background Brazier’s recorded history began in 1500, when Portuguese explorer Pedro Olivares Cabal landed in Porto Secure. At the time, there were an estimated one million indigenous people in the land that would become Brazil (Burns, 1970).
The natives enjoyed the world’s largest tropical forest and the largest river in volume in the world, the Amazon. The country would remain a colony f Portugal until 1808, when the colonial bond was broken. It was not until 1822, however, that independence was declared at the formation of the Empire of Brazil under the rule of former Portuguese prince Pedro De Electoral. Doom Pedro I of Brazil would return to Portugal several years later, leaving the throne to his 5-year-old son, Doom Pedro II who ruled for an amazing 58 years before succumbing to a military-led coup in 1889 (Levine, 1999).
Since that time, the country has known little political stability, as rule has shifted between a series of governments led by military’ regimes or harmonistic leaders. During the 20th century, Brazil operated under six different constitutions (written in 1891, 1934, 1937, 1946, 1967, and 1989) (Cash, Wilhelm, & Epinephrine, 2009). Perhaps the most chaotic period occurred during the sass and sass with the rise of authoritarian Getјolio Barras. In total, Barras would hold power for 18 years before committing suicide in 1954 (Levine, 1999). In the post-Barras years, power shifted between several short-lived governments.
It was in this period, in 1960, when the new capital city of Brasilia was inaugurated. Today, Brazil is a democratic republic formally the Federative Republic of Brazil) featuring a separation of powers similar to that of the United States. There are 26 Brazilian states and a federal district around the capital city. Brazier’s population of more than 193 million makes it the 5th most populous nation in the world (Brazil, n. D It is also the fifth largest nation geographically, encompassing more than 8. 5 million square kilometers (Brazil, n. D. ).
Brazier’s population is ethnically diverse, With more than half the population reporting to be of mixed or African heritage. In fact, Brazier’s official census statistics include a general étagère to include all multiracial ethnicities – this category represents 43% of the total population (Brazil, n. D As you would expect given this diversity, Brazilian society is less influenced by racial divisions, though the society still experiences divisions along social class lines. In terms of religious affiliation, Brazilian are overwhelmingly Christian, with more than 64% Roman Catholic and another 22% Protestant (Brazil, n. . ). The population is heavily concentrated among the coastal states on the eastern coast, particularly in the south. The large majority, more than 75%, of Brazier’s population resides n cities, the largest of which, So Paulo and ROI De Jeanine, are among the largest cities in the world (Brazil, n. D. ). Economic History Brazier’s early economy was largely based on the cultivation and export of sugar. Later, with the discovery of gold in the central and southern parts of the country’, mining became more important.
By the sass, however, both sugar and gold were eclipsed by the cultivation and trade of coffee. The coffee trade dominated the Brazilian economy for that century, allowing for substantial economic growth as world coffee prices rose during the sass and 1 8305. It was the coffee industry that fueled the growth of So Paulo, which was a small town of just 65,000 in 1872 (Faust, 1999). Coffee still represented 63% of exports in 1891 , though at that time other products were becoming important ? particularly rubber (Levine, 1999). Today, Brazier’s $2. Trillion economy (the 7th largest in the world), is still heavily reliant on exports (Brazil, n. D. ). Iron ore and petroleum products comprise the largest shares of Brazilian exports, though coffee, sugar, and other traditional products are still exported as well. Tourism is also an important industry, as tourists come room all over the world to visit Brazier’s lively cities and coasts and to see its unique Amazon rainforest’s. Brazil is currently preparing to host major global sporting events that will further the country’s tourism industry: the FIFE World Cup in 2014 and the Summer Olympic Games in 2016. Ender the recent leadership of presidents Fernando Crossroads (1995-2003) and Lu(s Nuncio Lull De Silva (2003-201 1), Brazil has finally experienced a welcomed political stability. Though these two men came from very different political approaches, they have pursued similar ends in their successive terms of office (Bourne, 2008). Brazier’s recent economic emergence owes much to the economic reforms instituted by these two leaders. After a period of hyperinflation that wreaked havoc on the country, it was Crossroads who, as minister of finance, introduced the Plano Real to restore the country’s fiscal health in 1994.
The plan involved fighting inflation by instituting budgetary reforms and eventually introducing a new currency, the Brazilian real. The plan succeeded in virtually eliminating the inflation that had plagued the economy for many years and set the stage for a decade of strong growth which brought international attention. In 2001 an economic analyst at Goldman Cash coined the term “Bricks” to describe four major emerging economies poised to take a leadership role in global commerce: Brazil, Russia, India, and China.
Though there was some initial skepticism about including Brazil in this group, the country’s economic strength over the coming decade validated the projection. Even in the midst of a global economic crisis and ensuing recession in 2008-2010, Brazil continued to post strong economic growth. While Brazil has experienced significant economic growth in recent years, including a dramatic expansion of the middle class, Brazilian culture is till heavily characterized by economic limitations. Arbitration is largely a product of citizens moving from the rural areas of the country in pursuit of jobs.
People enter the workforce at an early age and usually must work their way through college if they want to complete a higher education. Retailers offer many products with payment terms, allowing consumers to stretch out the purchase of products like shoes over several months. This is an economic necessity for many average Brazilian. Necessity also fuels an entrepreneurial culture where industrious citizens seek out any way possible o support themselves and their families. Along with a lower economic standard of living, Brazil has notably high levels of criminality.
For Brazilian, crime is an ever present fact of life. All Of these cultural trends and realities affect the business culture as well. Business Culture In order to gain a better understanding of Brazil and its culture, particularly its business culture, I recently conducted an interview with Andrew and Priscilla Watson. The Watson are long-time personal friends of mine, and they currently reside in Louisville, Kentucky, along with their young children. Priscilla was born and raised in So Paulo, Brazil. Her father worked for a printing company and later owned a furniture shop.
Priscilla began working at 14, and worked for a number of companies, including Rennin’s, a British- based engineering company, where she worked for 2 years in logistics. Andrew was born and raised in Louisville, Kentucky, and met Priscilla while completing a summer internship in So Paulo for a landscape architecture firm. They were married in December of 2004 when Priscilla immigrated to the United States. Since that time, Priscilla has worked in several positions, including as an optician in an Optometrist’s office for 6 years. She continues to make nearly annual trips home to Brazil, where her family lives.
Andrew and Priscilla divergent backgrounds have given them ample opportunity through the years to consider the contrasts between U. S. And Brazilian culture. Their experience in professional settings also provides them with insight into the business culture of both countries. I conducted the interview in their home on June 2nd. Several themes emerged in our interview as we discussed the culture and business environment of Brazil. First, both Andrew ND Priscilla emphasized the importance of the socio-economic standing of average Brazilian in understanding their business culture.
While the country is experiencing economic growth, it is still not being felt by individual citizens throughout Brazilian society, who continue to feel a great deal of economic insecurity. This feeling, which is widespread in the culture, affects the business culture in several ways. Another theme that emerged in the interview was the importance of relationships in Brazilian culture in general and in the business culture specifically. Trust seems to be a major issue, as Priscilla pointed out that the trust that often prevails among strangers in the U. S. Does not exist in Brazil.
Third, Brazilian business is heavily influenced by corruption and government regulation, what is sometimes called the “custom Brasilia”. Priscilla described this as a defining feature, one that even shapes Brazilian’ own perception of their future. Economic Conditions and the Brazil has had great success in recent years in expanding their C class, or middle class, to over 105 million citizens. Still, this middle class is not the kind of middle class seen in the U. S. In fact, according to the Brazilian overspent own definitions, the lower income limit for this middle class is about 5630 a month, or about $20 a day (Hanna, 2012).
That is hardly the kind of income that will allow a family to establish any kind of comfortable standard of living. Compounding the problem is the fact that the cost of living in Brazil, particularly for Consumer goods, is relatively high. So the middle class experiences developing world incomes but must buy at developed world prices. This creates great uncertainty among the Brazilian people. Priscilla and her family are very skeptical of the recent economic growth, pointing out hat it has yet to be felt by the masses. Economic insecurity plays out in the business culture in a number of ways.
First, Priscilla pointed out that Brazilian understand the value of a good job, and will sacrifice much to keep it. Good jobs include extensive benefits – vacation benefits are very generous relative to the U. S. But more importantly, they offer steady income. According to Priscilla, Brazilian fortunate to have a job, especially one With a foreign company, will rarely complain or voice dissatisfaction with their work. Rather, they will work extremely hard, exhibiting persistence and willingness o do whatever it takes to get the job done. By contrast, Priscilla finds that U.
S. Workers often need more direction, and tend to stay within the bounds of their job function. Another way Brazilian exhibit an appreciation for their jobs is in the way they interact with management. Employee-employer relationships are more formal, with employees offering more deference to their superiors. As a result, companies often have a more hierarchical structure, with decisions made at the highest level rather than shared as in the U. S. In the crowded cities, many workers also endure lengthy commutes, sing public transportation and walking, in order to be at work.
This sometimes leads workers to keep longer hours, in order to avoid peak commute times. While the culture at large is relatively casual, Brazilian often dress more formally and conservatively in the workplace. To Priscilla, all of this is the result Of Brazilian understanding that good jobs are hard to come by. Along these lines, it is important to point out some other ways that economic conditions influence the culture. Young Brazilian begin working at an early age, seeking to contribute to their families.
They will continue irking after completing high school in order to pay their way through college. Thus, it is quite common for young professionals to have just a high school degree and be working while also attending college in the evenings. Because of economic circumstances, young people tend to live with their parents until they marry, and sometimes even after that. For example, Priscilla worked at Rennin’s while attending and completing a business program at a vocation school, earning the equivalent of an Associates Degree.
Also, Priscilla pointed out that there is a strong entrepreneurial spirit n her country, as people seek out any way they can find to make money for their families. Street vendors are everywhere, and even in residential areas, businesses are often operating out of homes. Zoning laws are not heavily enforced. Priscilla family has some experience with this, her father and uncle having both launched businesses relating to furniture, with varying success. Relationships and Trust in the Business Culture Most resources emphasize the importance of relationships in the Brazilian business culture.
Brazilian value the formation and maintenance of relationships in their business dealings, making it hard to complete deals unless time is invested in building relationships. This aspect of the culture influences a lot of the customs and etiquette of the business environment. Greetings usually involve handshakes as in the U. S. , but at times the Brazilian shake hands longer. Meetings are often lengthy, and involve food or drink, allowing time for the parties to talk and get to know one another personally.
Meetings often begin with informal, non-business related chit-chat about sports and the like, which is another way of relationship building. When discussing business, Brazilian frequently interrupt one another, as they tend o converse in the same way they might with family and friends. Individuals will often not complete business deals until a relationship has been established. It is also not uncommon for businesses to employ members of the same family, as the relational bonds are important in the hiring process as well. A personal management style is highly valued in Brazil, as this is best suited to the work culture.
Priscilla suggested that trust is an important factor in the culture’s reliance on relationships. Because of the corruption and the associated crime which Brazilian confront in their day to day lives, they tend o be wary of strangers and careful about committing to business with them until they have been given some reason to trust them. Referrals and recommendations are important for this reason. It can be difficult for outsiders to establish a foothold in the business community without the relationships that are essential to doing business in Brazil.
The Custom Brazil and the Business Culture Another important feature Of the Brazilian business culture is its regulation and corruption. Sadly, this is such a prominent aspect of the culture that Brazilian even refer to it as the “custom Brasilia”, which is to say the cost of ongoing business in Brazil. One expert suggests that the custom Brasilia raises the cost of Brazilian goods by as much as 36% relative to the U. S. (James, 201 1). Priscilla described the business culture as very bureaucratic, with lots of red tape involved to get things done.
This probably is most heavily influenced by the government, which is expansive, with complex regulations imposed on businesses for everything from labor laws to safety to energy and much more. World Bank ranks Brazil number 127 of 183 in its Ease of Doing Business rankings (James, 2011). Even as an individual citizen, Priscilla ascribes dealing with government as very difficult. In the business world, companies often hire middlemen to help navigate the complexity. Brazilian businesses often mirror the bureaucratic nature of their government with the red tape they impose on their workers and customers.
Priscilla noted that the customer service experience in Brazil is not nearly as flexible as it is in the U. S. Corruption is also a key factor in the business culture. One way to navigate the bureaucracy is by bribing the officials, which is quite common and even expected in some cases. There is less cultural emphasis on the rule f law than in the U. S. Priscilla described interactions with police and other officials which were essentially no more than shakedowns by the officials looking for bribes. Her uncle bought a piece of property outside the city several years ago and built a facility to assemble furniture for his business.
He has had a great deal of trouble from local officials in gaining the permits he needs to operate the business because he refuses to pay the officials the bribe they are seeking. Instead, he is continually harassed with petty tickets and fines. This is evidently quite common in Brazilian business, and foreign investors are warned to utilize local representatives in conducting business, lest they be targeted for more harassment by officials. One of the more interesting moments from my interview happened as we were discussing this custom Brasilia.
As Priscilla spoke, it became quite clear that she has little hope that Brazil will ever fulfill its economic potential. As she described it, it is too late, there is no hope. What is holding the country back, in her eyes, is the corruption and bureaucracy that is too widespread and ingrained to be rolled back. The country simply does not have the human and physical capital to overcome it. She felt her pessimism about the country is shared by many Brazilian. Those who call Brazil the country of the future are not usually Brazilian.
Brazil versus the United States Business etiquette and practices in Brazil are heavily influenced by these three factors: the poor economic conditions for citizens, the importance of relationships, and the bureaucracy and corruption. These affect not only the way individuals conduct business, but also the way businesses interact with one another and the way businesses deal with the government. These defining characteristics Of the business culture also describe the primary preferences between doing business in Brazil and doing business in the United States.
The United States has a strong middle class that emerged after the Second World War They represent a strong consumer class that drives the economy in a way that is just not yet possible in Brazil. After many years of widespread economic success, the United States has an incredible infrastructure for doing business. This entails not just the roads and bridges necessary for moving goods, but also things like a well-educated and skilled workforce, business finance and credit, and respect for the rule of law. None f these appear to be in place in Brazil. Relationships are important to business in the U.
S. , but it seems they are much more important in Brazil due to the pervasiveness of crime and corruption in their society. In the U. S. , particularly in the smaller towns and cities of the middle part of the country, trust prevails, even amongst strangers. Business people in the U. S. Also know that if a business deal goes badly, they can turn to the government, in the form of civil or criminal courts, for redress. There is no such confidence in Brazil. The U. S. Has a longstanding rule of law culture in which citizens expect the law to be faithfully executed with little corruption.
Bribery is a scandal when made public in the U. S. In Brazil, it appears to be too ingrained in the culture to root out. Instead of Outrage, Brazilian citizens See this as a fact of life they must work around. One last major difference between the countries is the sense of hope and ambition. If Priscilla belief that there is no hope for her home country is indeed widely held by the Brazilian population, that is a marked contrast between our two countries. In the U. S. , citizens display a great deal more confidence in their country’s future and attention. Similarities between the two countries are numerous.
Business customs are much the same, from the way people greet one another to the business attire. The countries now have similarly structured political systems, though politics are very different. Brazier’s popular culture is heavily influenced by popular culture in the U. S. , particularly its movies. Thus, the styles and trends are not widely divergent. Both countries appear to place value on relationships in doing business, though perhaps to differing degrees and for differing reasons. Both countries also have strong entrepreneurial persist in their workforces.
Living and Working in Brazil Certainly, my background is very different from that of Priscilla Watson. She was born and raised in one of So Paulo’s velars, surrounded by crime and violence her whole life. I was born and raised in a quiet suburb of Louisville, Kentucky. Priscilla family has struggled to make ends meet her whole life. Enjoyed the comforts of the middle class in the U. S. Our divergent socio- economic backgrounds are perhaps the most significant difference between us. I’m not sure can truly understand the difficulty of the circumstances in which she was raised.
Still, in many ways we are not all that different. In terms of our family lives, we both had close, loving families who raised us to be independent and Strong. At 21 , she left home and moved to the united States. I moved from Louisville to Los Angels at age 20. We have similar values and beliefs, which is how we know one another – we belong to the same church. My background is not unlike that of Andrew, who adapted to Brazil well enough in his time there to meet his future wife. I believe I could succeed and thrive working in Brazil. Naturally, my primary challenge would be to learn the Portuguese language.
Having learned Spanish in school, I would have a decent base from which to build an understanding of that language. My business experience has included working with individuals from other countries, as I was part of a team working on global energy markets. I am a flexible and adaptable person. Priscilla suggested that the most important thing for a U. S. Citizen working in Brazil is to learn to navigate the corruption around them. She spoke of always knowing your surroundings, and making sure you leverage local residents to help you negotiate the best deals for goods and services. Ultimately, however, she scribed a country where business people are basically motivated by the same things. While the manners and logistics might differ a bit, business is business. I know I could do well in Brazil, and I hope to one day have the opportunity to see this beautiful and interesting country in person. Recommendations for Working with People from Other Countries Taking a closer look at another country like Brazil is an eye opening experience. You come to appreciate that business is not only numbers, but that culture and history play an important role in how people interact in business situations.
Having lived in the U. S. For my whole life, there is much about our business culture take for granted that is not experienced in other parts of the world. As I work with individuals from other countries in the future, I will make it a practice to spend some time informing myself of the customs and practices in their country. This information is easily found online, and understanding it can be the difference between making the deal or not. For instance, imagine a businessman from the U. S. Trying to get a “handshake agreement” on a deal with a Brazilian with whom he has no relationship – it is just not likely to append.
It is important to understand some key things about a business culture before attempting to engage with it. First, what is the accepted etiquette? You must know the basics of what is and is not acceptable. For example, in Brazil, the traditional U. S. Hand sign for “O. K. ” is regarded as a rude gesture. It would be important to avoid its use when dealing with Brazilian. Second, what is the broader cultural understanding of business? Work ethic and values differ greatly from country to country. In countries with little entrepreneurial spirit, workers are not motivated in the same ways.
In some European countries it is very difficult to fire an employee. As a result, in my experience, workers tend to be very rigid and inflexible, sometimes even dismissive toward management. It is important to understand what it is that drives people in these cultures. Perhaps the best piece of advice in working with individuals from another country would be to treat them with the respect with which you would wish to be treated. Priscilla noted how Brazilian tend to view U. S. Citizens as arrogant. It is a shame that this is quite common. There is much we can learn from other countries and their ultras.