Posts Tagged ‘Case Study’

Papel Paraná

November 12, 2014

Company:  Papel Paraná, S.A.

Country: Argentina
Cultural Focus:  Detailed reports vs concise summaries

Introduction

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.

Scenario

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.

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Breathe Pure

November 4, 2014

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

Country:  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.”

World Ship

April 7, 2012

Write an executive summary (see guidelines in syllabus).  Feel free to write in either Spanish or English.

Company:  WorldShip

Focus:  Overnight delivery of packages

Cultural Conflict: Dealing with differences between Brazilian personal style and new corporate policy

Source:

Kelm, Orlando R., Mary Risner. Brazilians Working with Americans: Cultural Case Studies. Austin, TX: The University of Texas Press, 2007. Pp 196.

Executive Commentary: http://www.laits.utexas.edu/orkelm/casos/intro.html

In a recent movie, Tom Hanks spent four years on an island in the Pacific Ocean, yet still delivered his guaranteed package.  In this case, a policy change at World Ship may not seem very dramatic, but it left some Brazilians wondering if life on an isolated beach would not be so bad.  World Ship has operations all over the globe and a local office in Salvador, Bahia.  Clóvis Oliveira has been the branch manager of the Salvador office for the past three years, and one of his top sales executives is Nelson Barbosa.

Last year, World Ship introduced a new focus called Primary Customer Prioritization (PCP).  World Ship prioritizes customers into three categories.  For infrequent and low-revenue customers there are drop-off sites, pamphlets, online descriptions, and a host of other services that are available to all customers.  These customers, classified as PCP 3, do not require any special, specific, or additional contact with sales executives.  Mid-volume customers, who generate revenues of between five hundred and five thousand dollars per month, require additional assistance, and this is provided over the telephone through World Ship customer service representatives (CSRs).  These customers are classified as PCP 2.  High-volume customers, who generate revenues above five thousand dollars, are classified as PCP 1 customers; they receive direct visits from the sales executives of the local World Ship station.

Under the new guidelines, when a potential customer calls a sales executive, the sales executive asks the customer questions, creates a profile, and provides the customer with a phone number.  Based on the answers to the profile questions, the new customer is categorized as PCP 1, PCP 2, or PCP 3.  The new profile system is designed to be advantageous for both customers and sales executives.  PCP 3 customers become aware of the services provided.  PCP 2 customers, by using the CSRs over the telephone, receive assistance in tracking packages and advice in payment options.  These levels of assistance leave sales executives more time to attend to the personal needs of the PCP 1 clients.  The sales executives can be more flexible, have more time at their disposal, develop future projects, and be more focused on the changing needs of the PCP 1 customers.  For example, before the new policy Nelson Barbosa worked with 200 clients, clients that he visited on a regular basis.  Only 40 of those clients are now classified as PCP 1, but those 40 clients represent more than 80 percent of his total revenue in sales.  The other 160 are now classified as PCP 2 and receive their services from CSRs over the phone.

So what is the downside of the policy?  As Clóvis Oliveira explains, “Technically, the policy is one hundred percent correct.  Culturally, it is on hundred percent complicated.”  To begin with, it was culturally bizarre for Nelson to tell the 160 clients that he had been visiting, some for over three years, that he could no longer attend to them personally and instead they would have to call a number to talk to a representative on the phone.  Brazilians want to be treated as special.  The pleasure of doing business in found in the pleasure of dealing with people.  “You mean you won’t be able to take care of me any more, Nelson.  What do you mean you can’t come and see me?  We can’t even go out for coffee, Nelson.  Oh, Nelson, what’s going on at World Ship?”  A similar problem arises when new potential customers give the sales executives a call.  Culturally, it makes no sense for someone who is already talking to Nelson to be told, “You need to call the central office, build a profile, and then they’ll tell you who to talk to.”  Every Brazilian on the planet will respond by saying, “But Nelson, what’s going on?  I’m already talking to you, and now I need to talk to someone else to find out if I can talk to you?”  That, however, is the way it is now at World Ship.  Without knowing the buying potential, the sales executive cannot make personal visits.  To be clear, World Ship is not refusing any customer.  The company simply has different levels of assistance.

In addition to restricting visits to PCP 1 customers only, the home office also has a new set of guidelines for how often PCP 1 customers can be visited.  Each kilometer traveled and every visit made must be reported.  If a sales executive is allowed ten visits with a certain client, and he visits twenty times, he must answer to the station manager and the home office.  The number of visits is determined by a matrix based on the revenues generated and any increase or decrease in sales.  The home office has really been cracking down on how sales executives spend their time.  Sales executives need to know the costs of time spent in visits that do not correlate to sales.  A good portion of Clóvis’s time is now dedicated to helping sales executives understand the actual costs involved in how they spend their time.  World Ship may be a global company, but in Brazil this is seen as a very “American” way of doing things.

Lately, the Brazilians have been discovering ways to getting around the new policy.  It is not their intent to do any thing illegal or underhanded, but they want to soften the harshness of the new policy for those old customers who no longer receive personal visits.  For example, the station in Salvador has a secretary named Sandra.  Of course, Sandra’s job is not to be a sales executive.  However, the station receives a number of over-the-counter drop-off packages.  Normally, these in-station deliveries do not account for more than two thousand dollars in revenues per month.  Since the new policy, however, over-the-counter revenues are up to nearly thirty thousand dollars.  Old clients simply go straight to Sandra.  Sandra also seems to be enjoying more flowers and chocolates from grateful customers who thank her for tracking their packages.

ABC Security Systems

March 27, 2012

Write an executive summary (see guidelines in syllabus).  Feel free to write in either Spanish or English.

Company: ABC Security Systems

Focus: The manager of the Latin American Marketing Division who has to coordinate worldwide operation on one hand, and specific Latin American differences on the other.

Cultural Conflict: Often North Americans assume that all countries of Latin America are alike, ignoring the cultural differences that exist among the various countries of Latin America

Case Scenario

Imagine being in the business of providing security systems for homes and small businesses in São Paulo, Brazil. São Paulo isn’t exactly known as a safe haven from crime. One can almost hear the advertising, “If we can provide security in São Paulo, we can do in your town too.”  For Carolina Battipaglia, this is precisely what she does on a daily basis. Carolina oversees the Latin American Marketing Division of ABC Security Systems, a multinational company with operations worldwide. And the company is truly multinational. Although the home office is located in San Jose, California, the current president of the company is from Malaysia and the former president was from England. The Brazilian manager is actually from Chile, and the Sales and Development Manager in Brazil is from Colombia. The V.P. for Marketing is a North American and the lead accountant in the local office in São Paulo is from Amsterdam. Although the company is international, at the same time, Latin American represents only nine percent of the company’s total worldwide operations. As a result, the US, Asian, and European divisions are well developed and well staffed; Latin America’s divisions are less developed, and spread thin.

Carolina is from São Paulo. (In fact you may have noticed her Italian family name. At the turn of the century nearly one million Italian immigrants arrived in Brazil and almost all settled in the state of São Paulo.)  Carolina has worked in the São Paulo office, located near Avenida Paulista, for the past 4 years. Previously she worked in the marketing division of a local television station. At ABC Security Systems, Carolina oversees the marketing in all of Latin America, which in the south includes projects in Brazil, Argentina, and Chile, and in the north includes Mexico, Puerto Rico, and Colombia. The majority of her effort and time is spent in looking at strategic plans, where to focus their efforts, which projects should be identical throughout all Latin America, and in what ways projects should differ from one region to another. Those logistics can be challenging. Part of this implies that Carolina spends a lot of her time reporting back to the home office about the progress of her region. On the other hand, she has to deal with marketing issues among the several countries in Latin America, which are all culturally diverse. “We are very fragmented here in Latin America” Carolina confesses, “and almost all of the other worldwide regions have an infrastructure that allows them to implement procedures without some of the challenges that we have in Latin America.”  Interestingly, Carolina is the first to admit that in many ways it is easier for her to communicate with the home office than it is to bring together all of the various Latin Americans. She remembers once during a web seminar with the home office that the participants were assigning who would be in charge of the various projects that were being proposed. In every other region, a different person was assigned to each project. In Latin America, however, Carolina was in charge of all of the projects. After a while people in the web seminar were asking, “How many projects does Carolina direct?”  It’s just one of the realities of overseeing one of the minority regions of the company. All of the other regional groups would say something like, “Let’s do XYZ…” but in Latin America, Carolina just didn’t have the manpower to assign these projects to different people.

As to her work with the Americans at the home office, Carolina is quick to note that it is generally easy to work with Americans. “They are very good at Human Relations and they work at all levels of the hierarchy.”  She believes that relationships among North Americans are more “flat”, that is to say, you don’t have to worry about North Americans asking, ‘Why did you go over my head?’”  Carolina believes that in Brazil, really in all of Latin America, you have to be more sensitive to hierarchies. “People here in Brazil are more ‘vertical’. They put more effort into playing their roles,” she says. She finds herself, to use an American baseball term, “covering her bases” more with the Latin Americans. Rather than just implementing a decision, in Latin America Carolina makes sure that she has talked to everyone in the right order first. For example, recently ABC compiled research comparing the effectiveness of online marketing among the different countries in Latin America. When Carolina presented the results to the home office, she simply presented the data. However, before she presented the same results to her Latin American colleagues, she was more careful to show a “draft” of the presentation to the various regional managers before going public with the results. “I just wanted to be more careful about the vertical repercussions of making sure that I didn’t step on any toes.”   In Carolina’s view, this extra step isn’t as necessary with the North Americans because they are less focused on level, power, and authority issues.

Similarly, Carolina feels that Americans are adept at being transparent. Of course relationships and networking are important, but she finds the Americans to be very open and honest. “In Brazil you find yourself always thinking, ‘What are they not telling me?’ or ‘What is really going on here?’”  She thinks that in Latin America there is an initial resistance to things because people are not as open in their communication. “I always know where the Americans stand, they are brutally honest sometimes,” she adds. In Brazil, well, people like to say that the Brazilians are really good at free style, improvising, and being flexible. Maybe so, but Carolina also believes that behind this jeitinho brasileiro lurks their unspoken hidden agendas. “I almost prefer to deal with the North American openness and frankness. There is less guesswork with the Americans,” she adds.

On the other hand, Carolina admits that sometimes the Americans put work above logic. She remembers one time, for example, when the company brought in people from all over the world for a series of face-to-face meetings in San Jose. “We had all traveled all night, from all parts of the world, and they wanted to start 10 hours worth of meetings at 8:30 AM!”  Nobody was able to perform well in the meetings. Everyone was half asleep, with hardly any feedback and almost no interaction. However Carolina adds, “To their credit, I will say that after that experience, the company made a new rule: No more post-travel Monday morning meetings!”

Another challenge Carolina has with the Americans is related to holiday and vacation times. “Normally I cannot take my vacation during regular Brazilian vacation times because the home office in the US cannot relate to our vacations in February.”  In the US everything closes up for the Christmas season, but Carolina knows that by January fifth everyone is back to work full force. “It’s one thing for me to work in February,” observes Carolina, “but what the Americans cannot understand is that it is almost impossible for us to do market research during that time. Almost anyone who is part of our target audience is on vacation and this isn’t just true for Brazil, but it happens in all of Latin America. Add to this the fact that ABC Security System’s fiscal year begins in October. This means that Carolina has to juggle the US holidays in December and June with the Latin American holidays in February, and coordinate all of this with the fiscal year that begins in October. “October is kind of crazy here.”

In some ways, Carolina’s biggest challenge comes more from her work in dealing with the local Brazilians and the other Latin American regions. Carolina confesses that in Brazil people are really adept at making you feel good. “You leave a meeting and you think that you’ve made great progress.”  The problem is that they just don’t always follow up on what they say they will do, and as a result, Carolina admits to doing a lot more “hand holding” with the Brazilians. Carolina also believes that Latin Americans seem to want to hold more follow-up meetings, to talk about previous meetings. “It drives me crazy!  Why don’t we just make a decision in the first meeting?”  But no, the tendency is to have long initial meetings that end with no resolution and then have follow-up meetings to start all over again.”

Carolina also observes that you cannot put all of the Latin Americans into one big basket. “The Mexicans, for example, have a passive resistance to everything,” she says. “All of the other Latin Americans identify with being Latin American. Even the Chileans, Argentines and the Brazilians despite their various animosities, consider themselves to be Latin American brothers, but not the Mexicans. They are Mexican, and everyone else is a foreigner.”  Carolina says that the Mexicans may say, ‘yes’ to things, but in the end they do it their way. For example, last year it was decided that globally the ABC Security System web site needed to have a consistent look and feel. Everyone had to modify the way that the various sites looked.  This included the use of graphics, the number of the illustrations, and the links about home security systems. When the final sites were launched, although the Mexican team had agreed to everything, in the end they used different graphic representations. “Our homes don’t look like the ones in the corporate graphics,” they complained.

To provide another example, Carolina explains that in Brazil, security and safety is less focused on home security systems (which becomes the responsibility of the apartment complex) and more on protection from street crimes. In São Paulo there is a greater fear of being robbed in traffic than there is of being robbed at home. Consequently, things such as bullet-proof windows and even armored cars come into play much more than in other locations. On the other hand, Chileans, for example, are much less worried about street crimes, and their focus tends to center on home burglaries in the summer months (December – February) when many are away from home on vacation.

Finally, Carolina has an anecdote to share about crime in Brazil. Recently she heard from an American friend who was traveling with his wife in Rio. They were resting on a park bench when suddenly a guy appeared who tried to distract them while a second person attempted to steal their bags from behind. The American, who speaks Portuguese fairly well, yelled something at the would-be thieves. In response the thieves said, “Oh, I’m sorry, I thought you were Americans. I didn’t mean to take anything away from you. Are you here from São Paulo?  What do you think of Rio?”  So it looks like Carolina has discovered a new security measure… learn to speak a little Portuguese and act like you come from São Paulo!

Dynamite, cultural vignette

February 8, 2012

Write an executive summary (see guidelines in syllabus).  Feel free to write in either Spanish or English.

Company: Dynamite

Country: Chile

This weekend the number 1 movie in theaters was shown on 2,032 theaters throughout the U.S.  It was the first week of its release and it generated $41,030,947 dollars.  By comparison the number 1 movie shown this weekend in Chile grossed $200,414 dollars and was on 43 screens.  Clearly, Chile, with a total population of around 16 million people is not on top of the movie industry’s got-to-be-there list.  Still, since 80% of the movies that play in Chile come from the U.S., this automatically means that Chilean movie distributors have to interact a lot with North Americans.  Among the 7 major movie distributors in Chile, Tomás Azevedo is the manager of the one of the largest, Dynamite.  Dynamite, you might say, is a perfect example of the “big fish in a little pond.”

 

Tomás spends a lot of his time travelling to the various film festivals: Cannes, Berlin, Toronto, Los Angeles, Sundance, etc.  A lot of time is spent previewing movies, interviewing with movie producers, attending social events and parties, and getting to know the players.  If you are not into the industry you may think that it would be a difficult task to decide which movies to bid on to get the rights to distribute.  After all, who wants to spend money on a bad movie?  However, this is not the strategy that distributors focus on.  “Basically we try to buy the exclusive rights for commercialization for as many movies as we can.”  As Tomás explains it, you never know which ones will become a blockbuster and which ones won’t.  As such, 80% of the movie rights are purchased before Tomás actually sees the movie.  “The sooner you buy the less expensive it will be to do so,” so that becomes part of the strategy.

 

Another thing that outsiders do not understand is that the rights for commercialization are unique to each country.  This implies that producers have to sell separate rights for all of the distributors in different countries.  There are not, for example, contracts that are made to show movies in both Argentina and Chile.  “It’s not really a matter of securing rights for commercialization in all Spanish-speaking countries or all French-speaking countries.”  The laws and regulations are specific to each country.  This is another reason why Dynamite fills a niche in Chile, and it is also the reason why they limit their activities to Chile.  Dynamite doesn’t try to secure rights to show movies in Peru or Bolivia, for example.  “Our strength is our online database.  We can provide our clients with instant access to statistics about their movies.

 

So, what is Tomás’ experience in working with North Americans?  “Basically we act the same with everyone, but the Americans are more structured.”  That is to say, he finds the Europeans to be more apt to change things, such as the time for appointments and the structure of those meetings.  Recently he was at a party the night before some appointments that were scheduled for the next day.  “With the Europeans I’d spend a lot more time talking about the party from the previous night; who we met, who was there, what we drank, etc.”  They were also more likely to add more food to the meetings too.  On the other hand, the Americans were more focused on what was already scheduled for their meetings.  They stick to their agenda and go along each item one by one.

 

Tomás also appreciates the fact that he can count on the American’s word.  Recently Tomás was in Los Angeles and he had been talking to a producer for about 30 minutes, someone he was really hoping to work with as a producer.  This person basically told Tomás that he’d love to work with him, but he already had a distributor in Chile and that he’d be faithful to the current partner.  It wasn’t a matter of how much money another would charge.  He simply had an obligation to his current partner.  “Although I was disappointed to not be able to work with him, I really appreciated the sense of loyalty that he had with his current partner.  And I appreciated the open and honest way that he communicated this to me.”  Tomás adds that this experience is actually pretty typical when working with Americans.  “You can count on their word, even when things are not written down.”

 

Before Tomás attends these festivals, he begins the process by sending a premarket agenda and a request for a meeting.  At the actual festival however, he realizes that Chile is a second-tier market.  The producers want to spend their first few days meeting with the large markets (U.S., Mexico, Brazil).  So Tomás is usually busier at the latter end of the festivals.  During the meetings the biggest challenge is to work out the criteria for the contract.  “For example, in our case we often buy rights that are subject to whether the movie is shown in the U.S. or Mexico first.”  There is a better chance of success in Chile if the movie has already become popular in one of the large market areas.  Recently Tomás had the experience of securing rights for a movie where the contract stipulated that it had to be released in Mexico first.  For some reason, however, they received an invoice before the Mexican release.  “When I contacted them about this, the Americans apologized, realized their mistake, and immediately cancelled the invoice.”  Tomás mentions this experience because he recently had a similar scenario with a European producer.  The rights were subject to a release in the U.S. and Mexico, but the producer tried to hide the fact that the film hadn’t been released in the U.S. and in Mexico it had only been shown one time on one TV station, not anything like what they had agreed on previously.  “I’m not saying that all Europeans are like that, but it is my experience that Americans have a mindset that you can depend on.  They are good for their word and what they promise is what they do.”

 

“The other thing I like about Americans is that I never have to worry about them asking for a coima,” a great word used in Chile for “bribes.”  Tomás notes that this is more of an issue with other Latin Americans and seems to be more prevalent among TV people than in the movie industry.  “We just don’t do it, and so it’s a lot easier when working with Americans because they never ask for it.”  In fact, “transparency” is a word that Tomás often uses to describe North Americans.  “They tell you exactly what they want and it’s amazing to see how many details they provide.”  Every thing is specific.  For example, the posters that advertise movies come with incredible details on the location and order of the text, names and words, not to mention the size of the graphics, the placement of the icons and sponsor logos, and the dimensions of the pitch and font.  “Of course all producers have their structure for this, but the Americans want to control what is theirs.”  Tomás says that he has learned not to ask a lot of questions about this.   “The producers know what they are doing and they want to approve all of the artwork.  Americans are perfectionists in this area.”

 

Tomás is also sensitive to the fact that Americans have their concerns about working with Latin Americans.  The biggest hurdle is related to copyright issues.  Americans know that there are copyright violations in Chile and it makes them reluctant to do business with them.  Tomás has to live with the frustration.  For example, he is currently dealing with a situation where a well-known movie rental company is selling and renting out one of Dynamite’s movies.  “They have no legal right to show it and they know it!  It happens a lot here and it costs us a lot of business.”  Still, Tomás is happy to say that Dynamite enjoys a positive image among his American and European clients.  Chile may not have the largest market in Latin American, but Dynamite’s professional approach, modern database, and conscientious employees have become an ideal partner for many filmmakers around the world.

MEX Airlines, cultural vignette

January 20, 2012

Write an executive summary (see guidelines in syllabus).  Feel free to write in either Spanish or English.

Company: MEX Airlines

Country: Mexico

Alejandro Naranjo, with 11 years of experience at MEX Airlines and 5 years as their fleet manager, begins by making an incredibly astute observation about business culture.  “When working with foreigners, I divide their cultural tendencies into three areas: the corporate style, the national culture, and the personal traits of the individual.”  Alejandro knows where he is coming from.  His work as fleet manager puts him at the forefront of the purchasing and leasing of airplane and airplane engines for MEX.  His work has included negotiations with people from all over the globe.  Recently he has been dealing with vendors and professionals from Chile, Brazil, France, Germany, England, and the United States.

“As an example of corporate style” he begins, “I find Boeing to be much more rigid and strict in their way of doing things than Airbus.  It can be tough, but you know what to expect from Boeing because they are always the same.  You don’t have to change things with them.”  This is not just a difference between the Americans (Boeing) and Europeans (Airbus), but it is part of their corporate style.

A few years ago Alejandro was negotiating with Boeing for the purchase of two airplanes.  These negotiation sessions are grueling.  They usually imply spending long days locked up in a conference room full of lawyers, technical support, and negotiators from both sides as you go page by page through the documents to discuss each item in the contract.  On this occasion the American representatives from Boeing had planned on returning to the United States on a Friday afternoon, and they were anxious to have the contract signed before leaving.  As Friday arrived however, it was clear that there were still a lot of details that needed to be worked out.  The Boeing representatives made a list of 10 items that were still pending, which had to be resolved before signing the contract.  Alejandro recalls, “I told them that I would need time to read through all of the 10 items, and that this would take time.”  He even suggested that they give up on the idea of having everything concluded that day, and that they might want to meet on Saturday to finish up.  They did not want to do this and so Alejandro retired to another room to read the 10 items list.  In the end the Americans missed their afternoon flight and the negotiations continued until about 10:00 that night.

“Since we didn’t resolve things that night, on Saturday morning they called me to ask if we could continue with the negotiations.”  By then Alejandro had already made personal plans for the day and although he felt bad for them, there was no other choice but to wait until Monday to wrap things up.  “On Tuesday we signed the contracts, and this was for just two planes!”  The difficulty that Alejandro found was that the Boeing representatives were extremely inflexible.  Often their response was simply, “The home office says no.”  Alejandro laments, “It actually takes a lot of time to understand the reason behind your counterpart’s proposals.  It just doesn’t help to understand their reasoning if the only answer you get is “The home office says no.” or “This can’t be done.”  That sort of approach to negotiations makes it difficult to get anywhere.  It bears mentioning that Alejandro is not criticizing Boeing per se.  He simply uses this example to show the rigid nature of their negotiation style.  Boeing representatives often fall back on the “home office” statements during negotiations.  “I’ve even heard them say things like, ‘Personally I agree with you Alejandro, but we still can’t change this’.”  As opposed to Airbus, for example, Boeing is extremely focused on their ultimate goal.  “I’ve never seen anybody else like that so much” he clarifies.  This is a corporate style, related but separate from a national cultural style.

As to a national cultural style, Alejandro notes that “Americans are always smiling and the tend to speak in superlatives and exaggerated words.”  That is to say, Americans are always saying things like, “Wow, that’s great.”  “Cool, that’s awesome.”  “How interesting, that’s really neat.”  Americans use the word “nice” a lot, which is uncommon in Spanish because the word simpático doesn’t really get used in the same way.  And Americans also use humor and jokes a lot more than Europeans do.  Alejandro has also seen over the years that Americans are more aware of being politically correct when they talk.  They are also reserved in their intimidation tactics.  “They don’t really make ultimatums, but they are always trying to figure out what is fair for both parties.”  Fairness is a big deal for Americans.  “I actually really like negotiating with North Americans because they are very experienced and we get a lot done.”  At the same time Alejandro also knows that Americans can be blunt in their communication style and he’s learned not to take offense at it or to be shocked by it.  He recalls one experience where an American colleague was asked if he had any children.  “No, I hate kids.  What do I have in common with any kids?”  Mexicans would never talk like that. It just sounds way too harsh.  And what is the reaction of the other Americans when they heard him say those sorts of things?  “Cool, how interesting,” all the time smiling of course.

As to personal style, which Alejandro separates from a national characteristic, he has another story about negotiations that were held in Chicago.  “I should begin,” Alejandro clarifies, “by saying that I actually prefer to do my negotiations on the road.”  When in Mexico, Alejandro knows that his personal and family life are more apt to infringe on his negotiations.  “When I am involved in negotiation situations at home, I clear everything else off of my calendar.  When I’m involved in negotiations on the road, it’s easier to dedicate 100% of my energies to the negotiations.”  In this instance in Chicago Alejandro was negotiating with a guy who was determined to end the negotiations by 5:00 o’clock that afternoon.  As the day worn on he got more irritable and grouchy.  Turns out that he had some appointment with his wife that night and as the afternoon wore on that is all he was able to focus on.  He started giving in to everything Alejandro was asking for.  “OK, that’s fine.  What else do you need? What’s the next item on your list?”  Basically Alejandro gained all the concessions, not because of the negotiations, but because the other person was totally uptight about whatever he had to do with his wife.  Alejandro again clarified, “I should say that I don’t have any children and I am not married, so I cannot say what I would do in that situation, but in this case, this man’s personal situation is what molded the negotiations.

So next time you fly with MEX Airlines, take a moment to consider that the plane you are on was purchased or leased during negotiations where corporate, national, and personal cultural differences were taken into account.  And chances are, if you are an American that you’ll say, “Wow, that’s really nice and really interesting.”