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Agenda

1. Economic indicators

2. Political system & its influence on business

3. Managers cultural behavior

4. Country Comparison

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Economic indicators

Agricultural products:coffee, soybeans, wheat, rice, corn, sugarcane

Industrial products:textiles, chemicals, cement, lumber, tin, steel, aircraft, motor vehicles

Population 206 million (July 2012 est.)Currency Real; 1 EUR = 2.3 BRLGDP $2.284 trillion (2011 est. )

GDP per capita $11,600 (2011 est.)GDP growth rate 2.8%Inflation rate 6.9% (2011 est.)Unemployment rate 6.1% (2011 est.)Pop. below poberty line 26% (2008)

http://www.auwi-bayern.de/awp/inhalte/Anhaenge/Exportbericht-Brasilien.pdfEIU, CIA Factbook

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Economic indicators

http://www.auwi-bayern.de/awp/inhalte/Anhaenge/Exportbericht-Brasilien.pdfEIU, CIA Factbook

Exports Imports

$250.8 billion $219.6 billion

transport equipment, iron ore, soybeans, footwear, coffee, autos

machinery, electrical and transport equipment, chemical products, oil, automotive parts

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Political system & influence on business

http://www.pwc.com.br/pt/publicacoes/assets/doing-business-brazil05.pdf

• Official name: Federative Republic of Brazil• President: Dilma Rousseff (since 1 January 2011); four years, chooses a cabinet• Membership in international organizations: UNO & subgroups, IMF, WTO, MERCOSUR, …

Pro´s Con´sSince 1990s: trade liberalizationImport duties being reduced gradually

Considerable bureaucratic interference & regulation

FDI is generally welcome (long-term, contribution to economic development)

Multiple & high taxes

Some geographic tax incentives (but usually treated equal to national firms)

Still some government-owned monopolies (utility sector)

Special federal programs reward investments in the poorer North & Northeast regions

Restrictions on certain strategic sectors: Air Transport & Publishing;Certain restrictions in financing & informatics sector & ownership of rural land

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Manager’s cultural behavior• Manager's personal style: great significance for

getting respect; his bearing & technical abilities very important

• Relationships = key importance, the boss & subordinates work hard to foster a relationship based on trust & respect

• Managers are expected to manage; boss gives direct instructions

www.worldbusinessculture.com/Brazilian-Management-Style.htmlhttp://geert-hofstede.com/brazil.html

• Importance of creating long-term relationships & respect• Instructions from the boss have to be carried out without too much discussion or

debate: If there is debate: should be done in private to avoid showing public disrespect to the hierarchy

• Giving instructions to subordinates: as clear, precise and comprehensive as possible. Subordinates will undertake the exact tasks they are given but no more

Implications for foreign managers

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Country ComparisonDimension Cultural Admin./ Polictical

Brazil High LTO: Brazilians accept more than one truth and change as a part of life; Diverse Ethnicities

MERCOSUR member;Currency Brazilian Real; Federative republic

Spain Very Low LTO: Spanish people like to live in the moment, without great concern about the future; Different Ethnic Groups

Part of the EU;Currency Euro;Constitutional monarchy

Germany Low LTO; Low PD: Direct and participative communication and meeting style is common, control is disliked; Ethnic Groups: German 91.5%, Turkish 2.4%

Part of the EU;Currency Euro:Federal republic

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Dimension Geographic Economic

Brazil Latin-America; 8.547.404 km² (195 million inhabitants), 6 climate regions

GDP: $2.09 Trillion (2010)Inflation Rate: 6.9% Unemployment Rate: 6,1%Sectors: Services 66%, Industry 28%, Agriculture 8%Resources: 14% of the world's renewable fresh water

Spain Southwest Europe; 504.645 km² (46 million inhabitants), 3 climate zones

GDP: $1.41 Trillion (2010) Inflation Rate: 2.00%Unemployment Rate: 23.3%Sectors: Services 66.91%, Industry 11.7%, Agriculture 2.3%

Germany Central Europe; 357. 104 km² (82 million inhabitants), moderate climate 3 zones

GDP: $3.28 Trillion (2010) Inflation Rate: 2.11 %Unemployment Rate: 5.8%Sectors: Industry 28,1% mainly Technological and Automotive industry, Agriculture 0,8%

Country Comparison

http://www.state.gov/r/pa/ei/bgn/2878.htm

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• Culture: Long-Term oriented• Admin./Politics: Restrict certain sectors• Geographic: Diverse and large, but also isolated• Economic: High Inflation; bound to US and China; High

resources and importance of Agriculture

• Compared to Germany and Spain:+ Economic Growth+ Agriculture and Resources- Diversity- Geographic Location

Summary