Brazil-USA: Learning to Bridge Cultures

     Brazil-USA: 
Learning to Bridge Cultures

    When
    Brazilian and American executives are briefed on what
    to expect from their counterparts in negotiations, the results
    can be surprising. The key is to understand the differences.
    Brazilians generally prefer to establish personal relationships
    at the start while Americans prefer less initial "small talk."

    by:
    Kim Hugget 

     

    From
    the very start it was apparent to negotiators for an American wine distribution
    company that representatives of the Brazilian winery across the table
    wanted far more than the United States company was willing to give.

    The
    Brazilians had tried to maneuver the distributors into buying their
    wine at a higher price, in larger quantity and over a longer term than
    the Americans could accept. They also wanted far more spent on promoting
    their product in the United States.

    "But
    what really surprised us was that they wanted to get down to business
    right away," said American negotiator Atul Chadha, a senior manager
    with IBM in San Jose, California. "We knew Brazilians like to establish
    relationships before talking contract, but they knew that Americans
    like to take care of business first."

    "We
    knew the Americans had gotten a talk on the way Brazilians like to negotiate,"
    said Sandro Marcelo Grof, a manager with the Brazilian textile firm,
    TEKA. "So they seemed to want to take more time at the start. Our
    side acted more like Americans. Our roles changed because we each knew
    the other’s usual approach."

    "I
    began to worry that if their side acted like Americans and we acted
    like Brazilians, we wouldn’t get anything done," said Kim Smith,
    business development manager for Hertz Corp. in Burlingame, California.

    The
    negotiations were actually part of an exercise designed by international
    business professors from the Centro Universitário de Jaraguá
    do Sul, known as UNERJ, and California State University, Hayward. Twenty-five
    Cal State Hayward graduate students in the Transnational Executive MBA
    program, known as TEMBA, met with a similar number of MBA students from
    UNERJ for a Saturday morning session at the Parthenon Hotel in the city
    of Jaraguá do Sul in southern Brazil.

    Role
    Reversal

    "If
    you put that many Brazilian and American executives in a room and tell
    them to negotiate a business contract, the last thing you might expect
    is that each side would adopt the bargaining style of the other country,"
    said Martin Desmaras, professor of international business at UNERJ.
    "Brazilian and American negotiating styles can be quite different.
    Each side can be so confident in its own approach that it doesn’t realize
    there is a competitive advantage, as well as personal reward, in looking
    at negotiations from the other side."

    "What
    can happen when executives from different business cultures meet head-on
    is that neither side is prepared for the other," said Shyam Kamath,
    an international business professor and director of the Cal State Hayward
    TEMBA program. "Each side can end up thinking that the other is
    stalling, unfriendly, too aggressive, or not committed to the process."

    Desmaras
    and Kamath said that when Brazilian and American executives are briefed
    on what to expect from their counterparts in negotiations, the results
    can be surprising. The key, they said, is to understand the differences.
    For example, Brazilians generally prefer to establish personal relationships
    at the start of negotiations while Americans prefer less initial "small
    talk." Profitability is often a priority for Americans in business
    talks, while gains in power or status can be more important to Brazilians.

    "Americans
    also tend to want negotiations at a faster pace," Desmaras said.
    "And they like to take issues point by point. Brazilians prefer
    to let business negotiations take time to develop and may not be so
    focused on details early in the game.

    "Brazilians
    also tend to consider a signed contract as something that can be revisited
    and revised often. A contract in China is the beginning of a negotiation.
    In America, a contract is binding once it is signed. In Brazil, it is
    somewhere in between."

    Cultural
    Tendencies in Negotiations

    The
    two professors arranged the mock bargaining sessions in December 2002
    and May 2003, when TEMBA participants were in Jaraguá do Sul
    to take classes on the Mercosur South American common market, cross-cultural
    negotiations, and management taught by leading Brazilian professors.
    The negotiation exercise was a required element.

    Before
    beginning the negotiations, each side heard separate presentations from
    Desmaras on negotiating tendencies prevalent in the business culture
    of the other. Neither side knew the specifics in the others’ briefing.

    The
    Brazilians represented the fictional "Garibaldi Winery," which
    was seeking an American partner in order to introduce its product into
    the United States. The confidential briefings given to each team instructed
    the negotiators to protect their own company’s assets while getting
    the other side to take more of the risk.

    "I
    was surprised at the Brazilian team we faced," said American negotiator
    Nabil Al-Hussieni during the joint de-briefing held after the exercise
    with all the participants. "We knew better than to push them into
    a decision at the start, but they came in with their price offer right
    away."

    Al-Hussieni
    is the transportation department manager for Office Depot in Santa Rosa,
    CA.

    "After
    we got into negotiating, we started with a higher price, the U.S. team
    came in lower, and we totally disagreed," said Daniel Schultz Machado,
    who works in the export division of Brazilian apparel manufacturer Cia.
    Hering and has made several business trips to the United States. "But
    our goals included expanding into the U.S. market and getting a long-term
    partnership. We ended up reducing our margin and got the longer contract
    we wanted.

    "We
    even got agreement that both companies would put their names on the
    wine label. We ended up building a relationship."

    "By
    the time the team I was on was through with its negotiations we had
    an agreement on price, volume and duration of the contract," said
    TEMBA team member Claudia Halene, until recently a lead account manager
    at Alom Technologies Corp. in Fremont, CA. "We agreed to talk about
    issues such as co-branding and legal issues later. A handshake was good
    enough at this point."

    "An
    important thing I noted was that since the talks were in English, our
    team was talking too fast and in sentences that were too long,"
    said TEMBA negotiator Esma Erisen, until recently a senior sales engineer
    and technical manager for Nortel Networks in Brentwood, CA. "This
    gave our side an advantage, but it’s important that both sides understand
    each other."

    When
    the teams took a brief break in the negotiations to discuss their positions
    separately, Erisen urged her group to speak slower and in shorter sentences
    when they rejoined the talks.

    "This
    is important to keep in mind," Desmaras said. "Sometimes the
    natural reaction if you believe you are not being understood is to just
    talk louder."

    In
    the general wrap-up session after the event, Desmaras also warned the
    Brazilian students to not misjudge the American propensity for self-criticism.

    "Self-criticism
    is one of the great American virtues," Desmaras said. "There
    is a cultural tendency in Americans that you learn from your mistakes,
    get up and move on. Their risk-taking is a consequence of their confidence,
    and Brazilians should not take self-criticism as a sign of weakness,
    especially in negotiations."

    Negotiations
    On A Global Scale

    The
    mock negotiations coincided with the visit to Brazil of United States
    Treasury Secretary John Snow, who announced that America wants to proceed
    rapidly with trade negotiations that could open the door for increased
    imports of Brazilian agricultural products, such as orange juice and
    sugar.

    "We
    are open for negotiations," Snow said during a factory visit to
    São Paulo, the country’s financial and industrial center. "Everything
    is on the table. So we’re anxious to get those discussions under way."

    Snow
    said the United States wants to form a Free Trade Area of the Americas
    that would stretch from Alaska to Argentina, but Brazilian officials
    said the trade obstacles for key agricultural products must be eased
    first. There are political ramifications for President George Bush in
    California and Florida, the nation’s top orange producers.

    Talks
    between these government trade ministers can follow many of the same
    approaches the Brazilian and American students learned in their negotiations,
    said Zinovy Radovilsky, an international business professor at Cal State
    Hayward and a TEMBA faculty member who made the trip to Brazil.

    "While
    understanding another country’s cultural approaches to doing business
    is not the only consideration to make in conducting negotiations, it
    certainly gives the negotiators a better chance for success," said
    Radovilsky. "That’s why it is so valuable for executives to apply
    what they’ve learned in exercises like this."

    "I
    think there is potential for increasing partnerships between Brazilian
    and American firms," Radovilsky said. "In Brazil, our students
    visited companies where they saw modern manufacturing organizations,
    where businesses are producing products of good quality, with high cost-efficiency
    in clean manufacturing environments."

    Radovilsky
    is on the faculty team that works with teams of TEMBA participants on
    consulting projects with leading Brazilian firms in the region. During
    their trip in May, TEMBA participants visited two of their clients who
    have commissioned them for three projects.

    Kyly,
    a manufacturer of clothes for infants and children, has commissioned
    a TEMBA team to help it enter the American market. Rohden, which exports
    100 percent of the pine doors it manufactures, has commissioned two
    TEMBA teams to investigate the potential and entry strategy for their
    doors into the German and French markets.

    International
    visits and the consulting projects are required elements of the TEMBA
    program. Participants must successfully apply the knowledge gained in
    the program to their consulting projects and to the negotiation exercises.

     

    For
    more information on the TEMBA experience in Brazil, go to: http://www.csuhayward.edu/alumni_friends/public_affairs/brazil/brazil1.html 
     

    For
    the Cal State Hayward Web site on the Transnational Executive MBA
    Program, go to: http://www.tembaglobal.com/ 

     

    Kim
    Huggett is director of public affairs for California State University,
    Hayward and accompanied the TEMBA delegation on its recent trip
    to Santa Catarina. He is a former reporter for The Sacramento
    Union newspaper in California. He can be contacted at khuggett@csuhayward.edu

     

     

     

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