Global Business Brazil - Assignment Example

Global Business – Brazil Having outgrown the home market, today’s businesses aspire to turn to other developing economies for gaining more and betteropportunities of growth. When they do that, cross cultural differences can impact the businesses in various ways. However, effective use of it can provide the organizations with a competitive edge. It is essential for the businesses to focus on the people relations, communication styles, issues in the environment, democratic inclusion as well as sustainability of the country, when establishing its business. Moreover, successful operations of businesses in the international sphere require a culturally sensitive team, which will help avoid cultural misunderstandings and thereby promote flexibility in communications and collaboration. The case study scenario taken for analysis focuses on a Denmark based company which plans to expand its manufacturing business operations to Brazil. We shall discuss the cultural issues that have to be addressed, by evaluating the possible management models in this particular context. Aspired to outgrow the Danish home market, the company’s hunt for new opportunities in the global arena for their manufacturing unit has led them to Brazil. This initiation has created the need for appropriate knowledge on cross-cultural communication strategies, management models and barriers associated with the Brazilian business community. Brazil, the world’s 5th largest country, in the geographical sense, is also characterized by economic stability, growth-promoting environment and manageable inflation. Because of its increasing importance on the global business arena, it has been placed as one among the BRIC countries, namely Brazil, Russia, India and China, which are expected to have a significant value in future global economy. Due to its preeminent position, organizations throughout the world, including Danish companies, has realized the potential of the Brazil industrial markets and as a country for substantial investment. Understanding the importance of cultural differences in business particularly people’s culture as well as organizational culture important for the company’s successful endeavor in the foreign land. A comparative study of both the country’s organizational cultures reveals the existing cross-cultural issues and the impacts it creates on the business environment. This indeed gives rise to both challenges and opportunities within the business sphere. The project teams require an innovative approach towards dealing with the Brazilian employees, by following and implementing the corporate standards and values, in accord with the adaptations needed for the Brazilian conditions. This would probably create better ability, motivation and opportunity among the employees. “International projects that use effective cross-cultural teams can provide a source of experience and innovative thinking to enhance the competitive position of their companies, and to resolve potential communication barriers.” (Anbari, Khilkhanova, Romanova and Umpleby). Overall, a mix of Danish and Brazilian business culture would ensure a better management of the manufacturing unit that is being set up in Brazil. For ensuring a successful entry into the Brazilian market, one should have a concrete analysis of the external and internal factors, arising out of the cultural issues prevalent in the country. Cultural and linguistic differences are supposed to present a greatest threat to the effective establishment of cross-cultural relationships. “Although business executives recognise the potential benefits that diversity brings to an organisation, they also report that cultural and linguistic diversity can make it difficult to collaborate across borders.” (The Economist Intelligence Unit 2012). With the majority of the Brazilians speaking Portuguese, and English being not that widely spoken or used, Danish company, in particular its management, will have trouble in communicating with the local Brazilian employees. In that direction, they need to recruit locals with required academics, skills and importantly English or even Danish proficiency for middle-level management posts, so they keep the communication channels open. Then, when it comes differences in organizational or business culture, much different from the Danish people, Brazilians are formal with their business deals and wish to socialize through business meals and get-togethers. They view the business socialization as an opportunity to connect with each other, which is not prevalent in the Danish culture where formal business agreements are handled at the office, rather than business dinners. (Agergaard 2010). Similarly, in the Brazilian society, class differences are still prevalent within the business culture, mostly reflected by the economic status of the individual. However, Danish business culture possesses an egalitarianism view, where employees are not differentiated based on economy but of skills, knowledge and competencies. (Agergaard 2010). The Brazilian business culture holds a centralized control while the Danish culture promotes decentralization. There is also a considerable difference in the behavior approach of the Danish and Brazilian employees. The individualism in Danish culture is much contrary to the collective culture of Brazilians. “The responsible autonomy among the Danish employees, is opposed to the more programmed and systems driven behaviour of the Brazilian employees.” (Agergaard 2010). Though it might be difficult to decide for the Danish company to choose the right kind of approach in their Brazilian subsidiary, decentralization would be appropriate, when handled with better encouragement for the employees to contribute to the decision making process. It could be observed that an adaptive model of management is an effective one among the Danish-Brazil business collaborations. Brazil’s organizational culture holds a hierarchical form, which is in total contrary to Danish’s flat business culture. “Brazilian culture has a high score on power-distance, indicating a more hierarchic form of organization and little need for justification of unequal power distribution.” (Granli 2012). It is unlikely in the Brazilian environment to have an open discussion with all the employees, as the control and decisions are generally attributed to higher level employees. Since the Brazilian organizational model is control based, it is relevant for the companies to exhibit personalism and bureaucracy as their cultural adaptation. “For long term commitments in Brazil, decisions are made at the top of organizations; implementation of such decisions by the bureaucracy tends to be cumbersome and time-consuming.” (Hendon, Hendon and Herbig 1996, p.48). There are few organizational management models that can be used in the case of Brazil, in respect to its cultural differences. The motivational theory model helps the managers in driving the employees’ motivation through acquire, bond, learn and defend. When all the four strategies are rightly managed within the organization, it promotes better motivation. It is essential that Brazilian managers have to perceive intrinsic motivation for their employees than extrinsic motivation. This is because intrinsic motivation seems to be a key driver for showing better performance rating among the Brazilian employees. “There is a much higher correlation between intrinsic motivation and a good performance rating than for employees perceived to be driven extrinsically.” (Agata, Karol, Łukasz, and Gunnar 2013). In accordance with the Brazilian culture, another organizational management model that can be used is the Path-Goal Leadership Theory. This includes different leadership styles such as Directive, Supportive, Participative and Achievement-oriented, which are used under varied cultural dimensions for Brazil. Since the organizational culture of Brazil includes Individuality and Power Distance, it is efficient to use directive and supportive leadership style. “High power distance equates with steep organizational hierarchies, with more autocratic leadership and less employee participation in decision making.” (Rugman and Collinson 2008, p.137). It is also evident that an effective leadership style related to the societal business culture would have a prominent effect on the behavior of the organizational employees. The implications of culture on the global business are varied, ranging from the employees motivation, organizational structure to personal relationship between teams and business. Overall, it is evident that staying flexible and culturally open-minded can benefit the Danish management in establishing an effective organizational structure within its Brazilian subsidiary. Therefore, it is important for the managers to closely examine the cultural differences and possess willingness to learn and adapt to the societal changes as well as uncertainties, and then make conclusions from their real experiences, rather than based on abstract generalizations. References: Agergaard, MB., 2010. How To Ensure A Successful Entrance To The Brazilian Market. International Technology Management at Aalborg University. Agata, G, Karol, G, Łukasz, G and Gunnar, H., 2013. Managing People in Brazil: CEMS Cross-Cultural Management. Available from http://www.e-sgh.pl/niezbednik/plik.php?id=27274147&pid=3251(accessed on May 26, 2014) Anbari, FT, Khilkhanova, EV, Romanova, MV and Umpleby, SA. Cross Cultural Differences And Their Implications For Managing International Projects. Available from http://www.gwu.edu/~umpleby/recent_papers/2003_cross_cultural_differences_managin_international_projects_anbari_khilkhanova_romanova_umpleby.htm (accessed on May 26, 2014) Granli, TC., 2012. Cross-Cultural Adaption in Norwegian Companies in Brazil: Understanding Differences in Business and Work Culture. University Of Oslo. Hendon, DW, Hendon, RA and Herbig, PA., 1996. Cross-Cultural Business Negotiations. Greenwood Publishing Group. Rugman, AM and Collinson, S., 2010. International Business: International Culture. Pearson Education. Available from http://www.unice.fr/crookall-cours/iup_cult/_docs/_RUGM_Chapter-05.pdf(accessed on May 26, 2014) The Economist Intelligence Unit., 2012. Competing Across Borders: How Cultural And Communication Barriers Affect Business. Available from http://www.economistinsights.com/sites/default/files/downloads/Competing%20across%20borders.pdf(accessed on May 26, 2014) Read More