Now that you have been exposed to the LESCANT model, HT&T dilemma theory, and Hofstede’s cultural dimensions, and given the various examples we have looked at all semester long about cultural issues in Latin America, what are the semesters biggest take-aways? (Write your comments before 3:00am on Thursday, Dec 4th.)
Archive for November, 2014
Company: Papel Paraná, S.A.
The forestry industry in Argentina is mainly located in the northeastern provinces of Misiones, Corrientes, and Entre Ríos. Papel Parana specializes in the production of cellulose pulp, which is derived from pinewood. What makes this case unique is that the home offices are located in Argentine, while the U.S. branch offices only employ around 55 employees. Instead of the typical scenario where American culture penetrates local activities abroad, in this story Argentine culture is learning to adapt to operations in the United States. Claudio Ruiz is the company’s General Manger and as such has a unique vantage point to observe these differences. In this scenario we see how Claudio deals with the way that Americans use humor and sarcasm in their speech. He is also impressed with their insistence on concise, streamlined, and summarized information, but he also see the disadvantages of this focus. Since Papel Parana has operations in over 50 countries, Claudio is definitely in a position to compare the American tendencies with those of other clients and employees from around the world.
It’s one thing to get international professionals to join a multinational company. It is quite another to ask North Americans join a multinational company that does not have its roots in the United States. And in this instance the word “roots” is significant because we are talking about Papel Parana, part of Argentina’s growing forestry enterprise. Papel Parana’s worldwide offices extend its activities into over 50 countries, including a branch in Atlanta, Georgia. The office in Atlanta focuses on cellulose pulp, plywood and panels, and there are about 55 employees who coordinate the logistics of Papel Parana’s shipping in 12 different ports. Claudio Ruiz, originally from Posadas, capital city of the Misiones Province, works in the offices in Buenos Aires and he is the main point of contact for those in the American “branch” in terms of training, video conferencing, and direct visits. As such Claudio has experience interacting with North Americans, but from the vantage point of that of a Latin American company.
Claudio finds himself visiting the Atlanta office around twice a year. And additionally at least once a year representatives from the Atlanta office go to Argentina too. The Atlanta office generally sends 1 or 2 people to Buenos Aires, and they stay for around two weeks. Their time in Buenos Aires is part reward, part a chance to see operations at the home office, part training, and part time to resolve complaints and coordinate plans for the future. Claudio fully realizes that in Atlanta it is a different type of person who is willing to work for Papel Parana. When recruiting they find that other American telecommunications or software companies are often more desirable to recent American MBA graduates. Working for an Argentine forestry enterprise doesn’t necessarily have as big of a draw. In Argentina, however, Papel Parana and forestry enjoy a growing positive image and part of Claudio’s responsibilities includes helping those in Atlanta to sense that image. In Atlanta, although all business is conducted in English, nearly 30% of the employees are Latin American (although not necessarily Argentine). The manager in the Atlanta office, in fact, is Argentine, but most of the Latin Americans in Atlanta are from other countries. Linguistically, none of the North Americans who work in the Atlanta office speaks significant amounts of Spanish. But the truth is that with operations worldwide, English is used almost exclusively for all business communications.
In terms of cultural issues, what things has Claudio noticed over the years? “Do you mean besides the size of the Starbucks?” quips Claudio. What stands out immediately to Claudio is the way that Americans use humor in their speech and communication, and the fact that they are always talking about sports. “Humorous topics are always thrown into the mix and Argentines misunderstand this, thinking that Americans are not being serious about their business.” He adds that Americans often repeat the phrase, “just kidding,” which doesn’t really have a good equivalent in Spanish. “I have to remind my Argentine colleagues that the American’s use of humor is just a way to keep things informal, which is another value that Americans hold dear.” Where Americans use humor, Claudio believes that Argentines use more emotion. As to sports, Claudio notes that Americans sometimes begin their day with 20-30 minutes of sports topics. “It’s a big deal for them.” Of course those of us from the United States wonder if Claudio means that they are talking about the Braves or the Falcons for 30 minutes, because certainly there are not 30 minutes worth of things to say about the Hawks! (And parenthetically, only Americans will get the humor of that sarcastic statement.) At the same time, soccer, and to a certain extent basketball, are a big deal in Argentina too. However, Claudio can’t help but wonder why the Americans, who love sports so much, seem to generally talk about soccer with such distain, almost writing it off as if soccer were totally insignificant in the world.
Another difference is that the Americans have more interaction with different levels of management. It actually makes for easy meetings. In training sessions in Atlanta when Claudio asks questions, everyone shares their opinions openly. “In Argentina we are more guarded about who says what to whom. The Americans are much more open about telling you what they think.” Claudio believes that this creates an atmosphere of less pressure, because things are less formal. Informality, Claudio believes, is one of the major principles that Americans value.
Where humor and sports don’t actually change the way that Claudio works with Americans, the way Americans use information does affect the actual work. That is to say, Claudio believes that Americans want their information streamlined and simplified. “We used to prepare very detailed reports for our American office, but the Americans didn’t like it, saying that they didn’t want ‘all that extra fluff’.” Part of the problem was that Papel Parana would send lots of information far in advance of the actual deliveries. The earlier that information was sent, the less precise it ended up being because things changed along the way. Still, Papel Parana wanted to send the reports to help the Americans prepare for the orders that were being processed. However the Americans understood the data literally and so they felt that they couldn’t depend on the numbers. What the Argentines interpreted as a “margin of error” the Americans interpreted as “misinformation.” “While we were telling them not to worry about the changes, they were asking us not to send them inaccurate data.” In the end Claudio decided to stop sending detailed reports so early. “I still think that they would benefit from more detailed reports, but it just caused too many problems,” he added. “Ironically,” observes Claudio, “the Asians love those reports and study them in great detail.” It’s just a matter of how people deal with imprecise information. The irony, Claudio says, is in the fact that the Americans actually demand quality where the Asian clients are generally more focused on speed. The stereotype is that Americans are less flexible, “and I’m beginning to believe that.”
Similarly Claudio has noticed how much Americans like concise information. They want to know the advantages, commissions, and price, the essential details. But they don’t concern themselves as much with “extra” technical information that is not closely related to their own responsibilities. “I don’t know if it is because they just trust other people in other departments or if they really don’t care about anything except for their specific responsibility,” he adds. They do understand the big picture, but there is a continual pressure to be more concise, to outline and to summarize. There are positive aspects to this of course, but Claudio believes that there are negative ones too. For example, he recently was dealing with a group of potential buyers who were from Asia. As they took a tour of a plant, a couple of people stopped to look at the garbage cans in the room. “They were actually basing their decision on the efficiency of our plant on the type of things that were thrown away in our garbage. I was amazed.” Claudio isn’t suggesting that the Americans should go to that extreme, but he gives the example to illustrate the difference between how detail oriented some can be, unlike the Americans who just don’t focus on that level of detail. On the other hand, the American’s focus on concise information causes them to be very efficient. “I’m really impressed with how organized Americans are. They really are good at maximizing efforts.” For example, Claudio has noticed how when shipments come in two parts, Americans are really good at knowing when to wait to move it all as one big package and when to move things twice.
On balance it has been an interesting situation for Papel Parana to open operations in the United States. “Instead of the Americans opening up shop in our backyard, we have moved on over to their neighborhood.” So next time you are with Claudio, he’ll understand the humor in your sarcasm, he’ll try to talk about sports, and he’ll even adjust the type of data that he presents to you. Just give him a little break and entertain his thoughts about Argentina’s soccer teams for a bit too.
Kelm, Orlando R. 2011. “Breathe Pure Chile: Teaching about the Cultural Differences in International Business.” Global Business Languages 16:83-99.
Company: Breathe Pure Chile
Businesses that serve a function in society that is little known from the general population are always interesting. A good example of this is air purification technology that is used in the perishable products industry. We seldom think about the effects of molds and bacteria on the fruits, vegetables, or meats that are transported in cold storage rooms from the processing areas to their final destinations. The cold chain industry works best, in a sense, when nobody is thinking about it.
Of course this implies that somebody has to be thinking about it, such as the employees of Breathe Pure, a clean air technology company. Although a casual description does not do justice to the technical nature of the business, their basic procedure is to create reactive oxygen species (ROS), a process of modifying oxygen molecules, which oxidizes and destroys airborne carbon-based molds and bacteria.
From a business standpoint, Breathe Pure began as an incubator idea by students from the University of California at Berkeley who were studying the potential of various emerging technologies in 2004. Quite by coincidence, as these students were making a presentation of their business and internationalization plan, a visitor was present at the exhibition and who decided to acquire the technology and invest in the project. Today Breathe Pure has its global headquarters in Boston, with its Chilean offices in Santiago.
Ernesto Arocha is the company’s South America Business Manager of the Cold Chain Solutions division, reporting to the COO at the home offices in Boston. Ernesto has been with the company ever since its inception and he vividly recalls the initial meetings. There was a lot to organize in order to create the infrastructure, including the identification of clients, and the transfer of technology and know-how. They were intense times. The founders knew that they wanted to include Chile into their design. From its reversed growing seasons with respect to the United States to its economic stability, Chile was attractive from the very beginning. Today Ernesto has to keep a “world clock,” as he is continually talking to people all over the world in either sales meetings or conference calls. And this is where the cultural side of things is evident. As he puts it, “I have to implement the commercial and operative aspects of the company in Chile and this implies understanding Chilean culture. But I also communicate this back to the Americans who are part of the company, and that implies understanding North American culture.”
For example, Ernesto often meets with potential clients in Chile, many of whom are wealthy landowners who live in smaller cities outside of Santiago. “They really don’t like phony young executives who wear suits just to impress people with their big city looks,” Ernesto observes. So he is careful to not give the impression that he is somehow better then they are. He purposely changes the way that he dresses when he goes on these visits. The clients live in the campo and they really don’t like it when you dress like a gringo. However he is also quick to observe that this is not to imply that these people are not professional or not educated. In fact, he has worked with a man who earned his MBA in Florida, and had a Ph.D. But when he returned to Chile, he preferred to run his business in a more traditional Chilean way. “When I visited him at his finca he showed me around for three hours. We were scheduled to meet at 8:00 am, but we really got started around 9:30. Then we toured around the finca for three hours.” Ernesto likes the fact that these people do things their way. It does not matter that their education was in the U.S. They adapt their education and know-how to local situations. Similarly, Ernesto had another appointment where he drove nearly three hours to get to the meeting site. When he arrived, the other person had forgotten about the meeting and nobody was there. However for Ernesto, “It was no big deal, no problem, he just forgot.” Ernesto realizes that his client was an important man, and in the countryside things were just a bit more informal. And if they are less formal, Ernesto has learned to be the same way with them as well.
The challenge for Ernesto is to move from that type of scenario to other situations where he works with North Americans, who have their own working style. For example, observing how much Ernesto has learned from his American colleagues’ use of agendas, he says, “They are spectacular! It sounds simple, but at the beginning of a meeting they will write the agenda items on a white board and then they follow all of the points in order, one by one.” He was recently at a meeting where he suggested that a given point be added to the agenda. His American partner did so, but he put it as the fifth and final item on the agenda. Then his American colleague went back to the original four items that were scheduled for the meeting. “After discussing our original four items, we then moved on to address the fifth. It was,” Ernesto quips, “spectacular!” He is also quick to add that if a similar scenario happens among Chileans, the general tendency is that everyone would have started talking about that new point and everyone would have been diverted from their agenda.
As to other adjustments that Ernesto has learned from his American partners, none is greater than their style of negotiating. First of all, he has noticed that Americans even use the word “negotiate” much more than Chileans do. Chileans think of the word “negotiate” as an ugly word, so euphemisms are used to avoid saying it. Americans directly say, “I am negotiating with you.” or “We want to negotiate these five points.” Chileans just do not talk like that. Another American characteristic, according to Ernesto, is the American tendency to say, “I want to work with you.” Americans are much more experienced in the concept of collaboration, in understanding one another’s bottom line, or in working towards a win/win situation. “Some Chileans just think that Americans are naïve to be so open about what they are negotiating, but I believe they are just good at putting things on the table. Chileans seem to still negotiate by feeling and there is a reticence to revealing too much too quickly.”
Another area where Ernesto has learned to adjust to North Americans is related to their management styles. He has seen, for example, that Americans want a lot in writing. They like written reports and memos. They love to be informed about everything and so you have to write to them a lot. Ernesto also finds himself spending a lot of time reading what they have written. “Here in Chile, it’s a little different in that if your superior says something, even if it is said informally, you have to do it.” With the Americans, however, casual oral comments are just that: casual oral comments. If not written down, there is much less of an expectation that something has to be followed up on. “I like this because it takes some of the guesswork out of the process,” he adds. In Chile he finds that you are always second-guessing, going with a feeling because things are less specific. In fact, Ernesto believes that Chileans almost take the opposite approach; they do not trust the written word. For example, Chileans sign every page of a contract. “It’s as if people don’t trust others and everyone expects another person to go and change something on a certain page of a contract.” Americans, on the other hand, just sign the final page of a contract. Another adjustment Ernesto had to make in negotiations with Americans is the presence of lawyers. The truth is that many of the American partners in the company are lawyers, so one gets used to having lawyers at negotiating sessions. In Chile there is still a negative association that lawyers mean problems. The attitude is more that of trying to keep away from them as long as possible.
Finally, Ernesto has learned a lot about what he calls “American efficiency.” He has noticed a small example – the different ways that Americans and Chileans consider lunch. “I’ve been in a lot of meetings with North Americans when they show me a small menu from which we order some sandwiches. Then ten minutes later the food arrives at the office.” Americans like to order out and have their lunch delivered because it helps them keep the rhythm of work flowing. In Chile the tendency is to go to a restaurant, meaning that one has to stop the workflow, spend the extra time in traveling and dining. It just “eats” up all the time before getting back to the office again. It is also one of the reasons why Ernesto thinks that Americans are better at leaving work at the end of the day. “Here in Chile we linger longer, where everything the Americans do allows them to be more effective.”
One gets a positive feel from Ernesto’s description of work at Breathe Pure. There is an interesting blend of modern technology, a sensitivity to the environment, a mixture of Chilean and American culture, and a pride among the over 40 employees that work there. One final question remains. How do Chileans pronounce the name of the company? “We just use the English pronunciation because here in Chile we associate American products with high quality.” But Ernesto also admits that sometimes people come out with some pretty interesting versions of Spanish sounding things like “bre-a-ta-pu-re.”