A key to manage effectively across national and cultural boundaries, which is critical to the success (Browaeys and Price, 2011), lies in the understanding the different means of in various cultures (Trompenaars, 1993). Hence, basic cultural analysis should be conducted to better plan the new manufacturing business unit in Brazil where there are many differences from the Swedish culture. The famous analytic models from Hofstede (1980) and Trompenaars (1993) are applied to identify the key distinct dimensions of the two national cultures in terms of their management implications.
The most influential factors chosen from Hofstede’s model are PD and UA, with the largest gap in scores and significant differences from table 1. Table 1 Different Scores of Brazil and Sweden in the national cultural dimensions
Source: Hofstede (1980, p315)
Firstly, PD refers to the interpersonal power or influence between the powerful member of an organization and the least powerful one (Browaeys and Price, 2011). It, however, reflects the human inequality with a range of aspects, including rewards, wealth, prestige and privileges, etc., in the hierarchies of the organization. Normally, a higher high PD value implies the requirements of a centralised and direct decision-making process rather than plural participations of members in different levels (Velo, 2012). Brazil is, as many as around one time larger in land size and populations of Sweden (Findthedata, 2012), which contribute to the centralisation trends of organisations. Meanwhile, the large PD of Brazil means inequalities of power and wealth are however likely tolerated (Stephen, 2006) since the resources are concentrated. For instance, Azevedo (2009) concluded that most companies from São Paulo Stock Exchange has strong power concentration characteristics in terms of fact that most controlling shareholders or their relatives hold or chaired CEO positions.
However, Brazil also suffers from, in return, burdensome bureaucracy and deep social imbalances (James, 2011). Reversely, Sweden companies are more democracy, less hierarchical and even, for employee able to make comment to their managers (Porter, 2006). Secondly, the UA represents the degree to which a culture prefers risky, flexible and new situations over conversational, rigid and regular status (Browaeys and Price, 2011). UA, as Hofstede (1980) noted, indeed suggests, uncertainty about the future and cope with it through technology, law and religion. Commonly, a high UA scores means the national residents are unlike to do risky things and try to avoid changes (Velo, 2012), which directs the activities in working are supposed to be planned with less ambitious and stable employees (Hofstede, 1980).
The managers are expected to be more task-oriented and involved in more details to control, if not eliminate, the uncertainty in work (Hofstede, 1980). Oppositely, Sweden companies are high possibile to have adverse attitude towards risk with different attributes in management (Porter, 2006). Predominantly Catholic population in Brazil reinforces the philosophy of the existence of an absolute ‘Truth’, that those individuals, thereby, should make efforts to lower this level of uncertainty (Vincent, 2003). Instead, in order to prevent the unexpected, the ultimate goal of this society is to control everything by means with adopted and implemented strict rules, laws, policies, and regulations (Stephen, 2006). Brazil companies are operating under a highly complex and expensive tax with a regulatory environment (James, 2011) aimed at reducing uncertainty in business circumstances.
Also, Brazilian companies are showing growing interests in implementing modern enterprise risk management techniques (Ernst & Young, 2012). In comparison, the Sweden companies are welcome the relaxed atmosphere in which managers are interpersonal and strategy centred and flexible in style whereas employees are ambitious with high turnover probability (Hofstede, 1980; Porter, 2006). The most vital factor taken from Trompenaars’ framework is individualism versus collectivism, which means people in certain culture are oriented to the self or common goals and objectives (Browaeys and Price, 2011). These two elements affects the international management in negotiation, decision-making and motivation and are often related to religions (Trompenaars and Hampden-Turner, 1997).
Catholics are likely to do group work while Protestants rely more on themselves. Brazil is a typical collectivist community that places family at the center of its social system and depend heavily on relationships (Malinak 2012). Accordingly, Brazilians are of loyalty and duty to their group, especially within their extended families (James, 2011). The firms are anticipated to care employees like family member. For example, a job are considered when it includes mandatorily paid vacations, Fundo de Garantia do Tempo de Serviço, at least one meal for employees working eight hours and the 13th salary (Novais 2012). Sweden companies are generally quite different. The common Swedish word “lagom” are used to inform the importance of one’s own performances in workplace (Porter, 2006).
MOST IMPORTANT DIMENSION IN THIS CONTEXT
Among all the dimensions in these two models, individualism should be the most important one that calls for intensified attention when setting up a new manufacturing business unit in Brazil. From a theoretical level, individualism is contained in both Hofstede’s and Trompenaars’ model and is suggested by some scholars (e.g., Dunnette & Hough, 1990) as the essential dimension to analyse culture. Because a large number of studies have proved the impact of individualism on the behaviour of members belong to a social group (e.g., Smith & Bond, 1999; Ashmos & McDaniel, 1996). Moreover, individualism usually has impact on some other dimensions in the models. For instance, people belong to collectivist culture and individualist culture is suitable to different motivation method (Hofstede, 1980). In this case, the most significant reason is the big gap between Sweden and Brazil in individualism. Just as mentioned above, Brazil gets 38 points while Sweden scores 71 in Hofstede’s analysis (Hofstede, 1980).
In Sweden culture, individuals usually are regarded as the end achieved by the improvements of communal arrangements (Hampden-Turner & Trompenaars, 1994). On the contrary, groups are regarded as end in Brazil culture achieved by the improvements of individual abilities (Hofstede, 1980). It can be reflected by the splendent performance of group sports in Brazil such as soccer (Wikipedia, 2012). The difference in individualism would lead to various factors that require more attention in management. Organizational structure usually takes the brunt of this change. People in Brazil would prefer group work rather than individual work. The group leader or the older and powerful member of a group is expected to offer help to younger colleagues (Hofstede, 1980).
It also leads to the changes in reward system. Since people in Brazil often motivated by group interests rather than their own, it would be better to set group goals and reward members on the basis of the group achievements. Decision making process is another significant different caused by individualism. In Sweden, people view themselves as being empowered to make the decisions needed to meet one’s own goals thus the decision making is very quickly. When it comes to group decisions, voting is a common method. However, Brazilians sometimes would give up their personal interests to collective interests thus decisions usually are not based on democratic voting (O’Keefe, 2004).
Moreover, Brazil people are usually integrated into strong, cohesive groups thus they attach great importance to relationships. Businessmen should pay more attention to develop good relationships to their potential distributors and government officials. Senior manager should spend as more time as possible with chatting and making jokes. Similarly, making a call or talking to someone in person is preferred to writing e-mails. To sum up, the big gap between Sweden and Brazil in individualism demonstrates that it is the essential dimension to analyse culture as it would lead to various difference in organization structure, decision making process and the importance of relationships. Thus, from both theoretical and practical level, individualism is the most important dimension in this case.
In conclusion, there are several significant cultural gaps between Sweden and Brazil including power distance, individualism, uncertainty avoidance, neutral versus emotional and attitudes to the environments. Individualism comes out to be the most important dimension because of the considerable gap between the two countries in their attitudes towards collective interests and personal honour. And this difference would have a significant impact on transnational management. Thus, the management method should be sharpened in order to consider them when extending business in emerging economies of Brazil. This allows to avoid misunderstandings caused by cultural reasons and to improve the efficiency of management and communication in new manufacturing business unit.
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