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Brazil: An Introduction to International Expansion Jeff Burney Shorter College
. labor conditions. In governmental atmosphere. Ethics and religions will be discussed under culture. Education will discuss how it affects income. The paper will review several different areas that will help make a final decision on foreign operations within Brazil. the topics of political stabilization and culture will be reviewed.Brazil: Introduction to International Expansion 2 Abstract This paper will discuss the prospect of opening business operations in Brazil. These areas will be used to make a final decision on moving forward with foreign operations. and education in Brazil. We will review the governmental atmosphere. how the education system is provided and how it affects politics. Labor conditions will deal with the laborer¶s work environment and labor unions.
Brazil¶s government has three parts much like the United States. It has changed from a democratic republic to military dictatorship multiple times. A civilian government has been in control since 1985 and is one of the longest spans of democratic control in the past 120 years. & the US with a land area of 8.200. iron ore. The population is approximately 48% white and 44% brown or multiracial. culture. automobiles. They have a wide variety of wildlife.Brazil: Introduction to International Expansion 3 Introduction Brazil is a very diverse country. Canada.514. Their currency is currently tied to the US dollar. electrical equipment. China. General Ernesto Geisel became the president and started the country on its current path of re-democratization. The predominant religion in Brazil is Roman Catholic. with 74% of the population identifying itself as such and 15%-20% identifying itself as protestant. etc. The illiteracy rate is around 12% and only 1. Brazil gained its independence from Portugal in 1822 as the Brazilian Empire and became a republic in 1889. Brazil is home to diversified habitats.000. Brazil is the largest country in Latin America and is the only Portuguese-speaking country. Brazil has the 10th largest economy in the world and has the largest economy in South America. They are a major exporter of aircraft.876 km2.74% among the population between 15 and 19 years of age. coffee. The number identifying itself with Catholicism makes it the largest Catholic nation in the world. Brazil has a population of 190. and extensive natural resources.000 people. In 1974. Most of the country has a tropical climate and includes the Amazon Rainforest. The population is mostly mixed among two different races. It has a GDP per capita of $10. It has a diverse background when considering it¶s demographics. Brazil has been plagued with multiple governmental changes since 1889. This has been done through a very purposeful and slow process. natural environments. It is the 5th largest country in the world behind Russia. politics etc. They .
The paper will discuss work conditions. Brazilian Democratic Movement Party (PMDB) & Democrats (DEM). In Hill¶s textbook. Brasilia the capital of Brazil. We will look to see how the labor conditions may affect our company in Brazil. religion. Influential aspects are the governmental atmosphere towards business. We will be focusing on the market and culture of Brazil. The governmental atmosphere can cover a wide range of areas. the Chamber of Deputies and the Federal Senate. . We will look to see how both the market and cultural issues affect the opening of a new international business. and politics. We will review how this may impact the company in the future and how to be prepared for issues ahead of time. and the Brazilian Air Force. Brazilian Social Democrat Party (PSDB). we will see how it affected by ethics. Legislative and Judicial. he tells us that ³International business is much more complicated than domestic business because countries differ in many ways. education and labor. We will be looking at how each of these items would affect opening our operations in Brazil. Judiciary authorities have virtually full control of the legal system of Brazil. Brazil has a three prong military consisting of the Brazilian Army. Within culture. The National Congress consists of two parts. Brazil is currently a Democratic Republic with a Presidential system that allows for two four year terms for the elected president. It has the largest military in Latin America. Brazil is made up of 26 states and 1 Federal District.Brazil: Introduction to International Expansion 4 have the Executive. labor unions and child labor.´ To help understand these complicated differences and to try to solve and/or be better prepared for them up front. Labor conditions in any international market are very important. the Brazilian Navy. we will focus on a few points with opening up our business operations in Brazil. with the highest court being the Supreme Federal Tribunal. The country has four main political parties: the Workers¶ Party (PT).
We . They were able to repay the package by 2005.Brazil: Introduction to International Expansion 5 The education of a location is very important when looking to open new operations. through external capital flows attracted by high interest rates and debt refinancing. Brazil has ranged from civilian democratic control to military dictatorships. even though it was not due until 2006. According to Armijo & Faucher (2002). and at the cost of a long period of low growth with high inflation²to weather the 1980s with neither adjustment nor economic collapse. the government has become more stable and has had peaceful transitions of leadership through democratic elections. Brazil managed to survive. We will review Brazil¶s governmental atmosphere by looking at the recent history of Brazil¶s market.´ In 2002.4 billion in aid from the IMF in mid 2002. ³through export revenues. and how Brazil¶s culture affects it. Governmental Atmosphere Brazil¶s governmental atmosphere has been one of almost constant turmoil and upheaval. through military coups multiple times in the last 120 years. We will review how education has changed over time in Brazil. politics. which at that time was a record amount. Also. Brazil received $30. Culture has a strong influence over the ethics of a country or even regions within a country. Brazil has suffered through some hard economic times over the past 20-30 years. Since the mid 1980¶s. During the 1980¶s when much of Latin America was suffering through a major debt crisis. Culture can make a large difference when deciding where to open our new business. Brazil had to request and receive a rescue package from the International Monetary Fund (IMF). the discussion of education will include whether or not the country can sustain the type of workforce needed to produce a certain product. We will look at how culture affects the type of education that is provided to the citizens of Brazil.
´ Through our evaluation. we want to review how ethics might be different within the Brazilian culture. which is the opposite of the individualistic tendencies we have in the United States. Also.´ In addition. They state that ³A Brazilian individual judges whether a proposed action may be ethical or not based on the consequences of the action for the relevant in-group to which he/she belongs. and Gauchos from the Grande do Sul state. This shows a strong lean towards collectivism. Cariocas from the Greater Rio de Janeior. Byles (2002) came to a very point blank conclusion that ³Clearly. In Sims & Gegez (2004) article on the Attitudes Toward Business Ethics. Beekum. Lenartowicz and Roth (2001) list ³four regional Brazilian subcultures: Mineiros from the Minas Gerais state. Are there differences between the ethical decision making in the United States and Brazil? According to Beekum. it would be important to look at how this would affect the opening of our business in any country. Stedham. and Yamamura (2003) give a good description of how to work with a Brazilian. We will review how different cultures may affect our business operations in Brazil. We would not want to go into Brazil with a general belief that one overarching cultural view would cover the whole country. they claim ³Attitudes toward business ethics may vary so greatly even within one culture that trying to come to a consensus across cultures can become nearly impossible. Americans involved in business with Brazilians must understand and consider this emphasis when trying to convince a Brazilian that a certain action is ethical and the µway to go¶´. and Yamamura (2003) in a study of business ethics makes the claim that ³Clearly. Paulistas from the Sao Paulo state. In a review of Lenartowicz and Roth.´ One item that we would want to ensure that we review is the differences in the subcultures of Brazil.Brazil: Introduction to International Expansion 6 would need to review the idea of ethics for each area we look to do business. . Stedham. respondents from Brazil and respondents from the United States differ in their assessment of the ethical content of business decisions.
A solid evaluation of the religious affiliations of the area we are looking to operate in would be vital to our international operations. it has allowed for my protestant politicians to be elected on their own religious platforms. Since the increase of the protestant population. When it comes to working conditions. Labor conditions can vary widely throughout the world. What we consider poor working conditions in the United States may be considered ideal in other regions. we as a company must decide who we want to deal with for our . they state ³Labor conditions and human rights. compounded by severe concerns about job loss and downward income pressures in developed countries. the protestant Brazilians have shown more inclination to politics than their catholic counterparts. With Brazil¶s increase in protestant population to approximately 20% of the population. These topics can make or break our business ventures as we move forward with an international expansion.´ Religion can also affect the culture of a foreign market. Labor Conditions In Logsdon & Wood¶s (2005) article in the Journal of Business Ethics.´ There can be a big difference between labor conditions in an international and domestic business. ³more than 50 Protestants were elected to the national legislature in 2000´. along with environmental practices.Brazil: Introduction to International Expansion 7 companies are seeking ways to adapt their ability to understand the mysteries of culture and put that understanding to good use in the marketplace. Even more powerful is the mounting pressure for global social justice in trade practices. These two areas of concern contain a vast number of specific issues on which little or confusing guidance is available to multinational enterprises. have assumed a place of prominence for global stakeholders. The governmental atmosphere may be one of the most important topics we review as we consider business in Brazil and any other foreign locations. According to Patterson (2005).
If we are happy dealing with international businesses that have less than ideal working conditions which allow us to make a bigger profit. A consideration of opening a business in Brazil will be Labor Unions. According to Arat (2002). thirdly the new unionism maintained strong connections with social movements and. One of the considerations that we will need to review will be child labor. strategies. a strong relationship with a new left-wing party based on labor unions. Arat (2002). He .secondly the movement emphasized autonomy from the state and a rejections of corporatist unionism«.´ The new unionism has shown its power when in 2002 the Workers¶ Party was able to elect one of their own. The company must make a decision and decide how we feel about working with these companies. In an article by Zehara F. and membership were based on a broad view of the meaning of representation that involved attempts to include and organize workers outside the formal sector and to link the representation of workers¶ interests with a wider political program for democratization and socioeconomic change. in the Brazilian case. Brazil has a high union membership. Having regulations in place on how to deal with this before it becomes an issue would be a good business decision. Luiz Inacio Lula da Silva a former metalworker was elected to the presidency of Brazil. He says that this new unionism has four primary characteristics. the unionism¶s objectives. the Workers¶ Party«. that is a decision we must be prepared to defend if we are ever attacked. Fourthly. he cites an interview with Oded Grajew. it is mentioned that there are 3-4 million children under the age of fourteen that are working in Brazil. ³it focused on internal democracy and the democratization of labor relations«. Brazil has progressed to what Mark Riethof (2004) calls new unionism. In the interview. Relocating or opening a new business venture in any area of the world makes it vitally important the company understand how much and what kind of influence labor unions demand.Brazil: Introduction to International Expansion 8 transactions.
We need to consider what kind of labor conditions we are willing to have our products developed and produced. HolmNielsen. will normally cause an increase in pay. Brazil has seen this over the last few decades. There are many aspects of education that can be reviewed. Blom.Brazil: Introduction to International Expansion 9 believes that a payment should be made to the family of these children to help support them in school. so we do not have to deal with these issues as they pop-up. Blom. Education. especially as it increases. ³the main reason children work is because the family needs money´. Brazil is still suffering from a lack of educated laborers. During the same period. Education Education is another important factor that must be examined when looking to open operations in a foreign market. the way that the schools are operated and participation in politics? We will touch on each of these topics.´ These adjustments have helped with an overall increase in Brazilian education. upper secondary (high school) and tertiary (university) with each level being completed after a graduation test. Education can have a large impact on business. Over the past several decades. education has started to take on a more important role within Brazil. but too few Brazilians are getting advanced . How does the education of an international market affect labor force¶s income. Holm-Nielsen. and Verner (2001) tell us. lower secondary (middle school). ³The average Brazilian worker in 1998 had received more years of schooling than comparable workers in 1982. There are four levels to the Brazilian education system: the primary level (elementary). Brazil went through a series of economic structural adjustment periods. He believes. and Verner (2001) also tell us ³Brazilian firms are increasingly demanding workers with a university degree. Labor conditions are very important in making a final decision on moving to Brazil. We need to put rules and regulations in ahead of time.
we must make sure that we play close attention to what kind of unskilled or skilled workforce we will require. As Brazilian education increases. and dropout and repetition rates have dramatically declined. Educational standards have improved. decentralization shifted responsibility for decision making from the state capital to school boards headed by an elected principal and composed of equal numbers of parent representatives and school staff. One example is mentioned by Alexander (2001) when he discusses Minas Gerais. Patterson (2005) discusses this in one of his papers. ³In the Brazilian state of Minas Gerais. and we would need to keep a close check on these changes.Brazil: Introduction to International Expansion 10 degrees. Another impact that has affected the education system of Brazil is a change in the way the educational system is set-up. More control has been given to the local governments with less supervision from the state and federal government. He states ³Thus Brazilians who are the best educated are the most likely to feel politically engaged. Therefore. it will continue to open doors for new politicians to enter the political realm. Education will play a vital role in the opening of a new venture for our company in a foreign market. It can also cause changes within the laws that are in place to govern worker conditions. This shortage is making it increasingly attractive to obtain a university degree. The lack of university educated workers will need to be reviewed before making a final decision on operations within Brazil.´ Education can affect the political process as well.´ The lack of university degrees has caused an increase in salaries for those who obtain a university degree.´ As the more educated Brazilians continue to become more involved in politics. It will allow for greater diversity of leaders within all levels of the government. . citizens are taking more of an interest in political topics and elections.
scored high on individualism and is considered an individualistic country. The continuous change in governments leading up to the early to mid 1980¶s would have made it very difficult to have done business in Brazil. In a survey in Beekum. The governmental atmosphere of Brazil is an important topic to review before commencing with operations in Brazil. The summary will cover the main topics about the governmental atmosphere. We would need to review the individualism/collectivism tendencies of Brazil. and Yamamura (2003) article. by contrast. it could be disastrous to operations in Brazil. If they do not understand how to work with a collectivist society. Religions have made a large impact in the whole world. The slow change from a military dictatorship to democratic control seems to have helped Brazil stabilize itself under democratically elected officials. it mentions a survey that shows ³Brazil scored low on individualism.S. Brazil shows a stronger tendency towards collectivism. and hence is considered a collectivistic country. the U. In regard to the culture. there are a few topics that we need to consider. We would need to break it down and review the . labor conditions.´ This would be a very important topic to discuss with our domestic managers as they work with the leadership and employees that we would have in Brazil. we will summarize the topics presented in this paper to help decide whether or not the company should move forward with opening operations in Brazil. Stedham. This stabilization will help in making a decision in doing business in Brazil. and education in Brazil. The government of Brazil has stabilized tremendously over the last 30 years. The religion aspect of the culture of Brazil will also need to be considered.Brazil: Introduction to International Expansion 11 Summary In conclusion.
There are a few ways of viewing the labor conditions of some areas. Secondly. There are two topics that we will need to discuss. The company could help with the public relations portion by advertising what the company is doing to help these local poorer areas. There are a few ways to counteract this problem. it would need to be discussed ahead of time and how the company . This would be another strong sign to the stability of the democratic government of Brazil. In addition. the company needs to decide what kind of work environments are suitable conditions for their employees. ³The increasing religious pluralism of the region may imply that Latin American countries are becoming more open and tolerant-values that are fundamental for democracy to thrive´. The company needs to be prepared to deal with the increase in the protestant population. The company can do random surprise inspections of the facilities that are producing our goods. Labor conditions also need to be reviewed when summarizing the possibility of moving opening operations in Brazil. Labor unions are a strong consideration that needs to be discussed. With Brazil having a strong labor union presence. Labor conditions are a very important part of doing business in foreign markets. he clearly states what the rise in protestant population means to Brazil. the company needs to understand what this can mean to the politics of Brazil. the company needs to consider the possible public relations fiasco that could happen if the company is associated with producers in foreign areas that are accused of operating sweat shops. labor conditions and unions. First. it would probably be beneficial to help out the local community with needs that are not always met.Brazil: Introduction to International Expansion 12 local areas that we are looking to open foreign operations. In an article by Patterson (2005). With the increase in the protestant population of Brazil.
The company must ask itself multiple questions about the education of the area.´ This is an amazing increase in the education system of Brazil. Education is extremely important when deciding which foreign markets to move into. With the continuing higher education level of the Brazilian populace over the last 30 . how the education system is build. Blom.6 this implies an hourly wage of R$4. Being prepared ahead of time before having to face the unions could be a strong advantage for our company. Blom. The group of workers with completed lower secondary education increased by 27%. The main focus that we will look at in conclusion is how the increase in education is affecting Brazil¶s labor force. they state ³In 1998.7. and Verner (2001) completed a study on how Brazilian¶s increasing their education level affects their income. The largest difference between educational groups is epitomized by the 814% difference between the monthly wage of a university graduate and a worker with no degree´ One of the most important factors that our company will have to review when we are looking at new ventures is how the education system is doing in that country. Holm-Nielsen. This increase in greater education has also caused an increased in income levels in Brazil. an average metropolitan worker earned R$199 a week for an average work week of 41. and the share of workers with upper secondary education expanded by a remark-able 68%. A few of them are how will income affect our operations. Holm-Nielsen. Education is a key determinant of wage in Brazil. and how politics will affect it.9 hr.Brazil: Introduction to International Expansion 13 would want to interact and negotiate with these unions. and Verner (2001) have done a lot of research on how the change in the education system has affected Brazil. Some examples of an increase in the education system are ³By far the largest expansion in completed schooling has taken place among the middle levels of education.
and ensure that the right kind of skilled labor will be available through the education system for the part of Brazil that we will be operating in. . Taking everything in to consideration in this paper. The stabilization of the government over the past 30 years has taken care of one of the main concerns of opening operations in Brazil. we will need to consider that the incomes we are paying our new employees in Brazil will continue to rise for the foreseeable future.Brazil: Introduction to International Expansion 14 years. The other points that the company will need to focus on are the differences in culture between the United States and Brazil. it would be my recommendation that the company moves forward with opening operations in Brazil. how the company plans to deal with labor conditions and labor unions in Brazil.
Journal of International Business Studies. A. 44. Journal of Business Ethics. 32. Hill. Inc. Journal of Business ethic.H. (2001) Does Subculture within a Country Matter? A Cross-Culture Study of Motivational Domains and Business Performance in Brazil. New York: The McGraw-Hill Companies. 76. K. and Alternative Proposals. doi: 10. L.F. Z. Education. 285-338. Holm-Nielsen. Aggravating Policies. 42. C. Stedham. Wood. Yamamura. D. Faucher. L. Logsdon. 2. T.. Roth. 305-325.M. (2005) Global Business Citizenship and Voluntary Codes of Ethical Conduct. N. D. Global Business Today (6th ed). (2009).. (2001). Armijo. 267-279.1007/s1055i-0053411-2 . (2002).C. (2003). Latin America Politics and Society.. Earnings. J. 180221.J. Human Rights Quarterly. Paying for Education: How the World Bank and the International Monetary Fund Influence Education in Developing Countries. Brazil¶s Distinct Subcultures: Do They Matter to Business Performance?. J.M. 55-67.. Byles. 76. 24. Blom. (2002). F.Brazil: Introduction to International Expansion 15 References Alexander.I. 59.L. Lenartowics. Verner. 16. Peabody Journal of Education.. Arat. The Academy of Management Executive. Peabody Journal of Education. Beekun. (2001). Analyzing Child Labor as a Human Rights Issue: Its Causes. and Inequality in Brazil.E. 1982-1998: Implications for Education Policy. Business Ethics in Brazil and the US: A Comparative Investigation. (2002) ³We have a Consensus´: Explaining Political Support for Market Reforms in Latin America. Y. R.. 177-204..W. C. 1-40.
47. Riethof. R. 1-29. Sims. 31. 253-265. Religious Activity and Political Participation: The Brazilian and Chilean Cases.Brazil: Introduction to International Expansion 16 Patterson. Gegez.E. Latin American Politics and Society. M. Latin America Perspective. (2005). 50. .. (2004) Attitudes Towards Business Ethics: A Five Nation Comparative Study.L. Journal of Business Ethics. A. 31-47. (2004) Changing Strategies of the Brazilian Labor Movement: From Opposition to Participation. E.
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