Johnson's Emerging Markets Institute (EMI) spotlights Brazil
3/15/2011 11:53:00 AM
Brazilian business conference sponsored by EMI reveals that as the eighth largest global economy, Brazil is indeed 'emerging' and facing its challenges head-on
Brazil may be the land of economic opportunity, but there are some caveats for investors and others doing business in South America’s largest nation. That was the message delivered by a panel of authorities on the subject who shared their wisdom during an international conference at Cornell sponsored by Johnson's nascent Emerging Markets Institute (EMI).
With the world’s eighth largest economy, a trade surplus and political stability on a continent known for upheaval, Brazil is positioned for growth, both domestic and international, the panelists said. At the same time, poverty, rising inflation, regulatory red tape and cultural differences are all challenges to be met.
This information-sharing, from business leaders in a foreign land, represents one of the key goals of EMI, established last fall (2010) by Johnson to expand its global footprint and to establish ties that connect MBAs with opportunities in developing markets worldwide.
While some of the advice given at the conference applies to emerging economies across the globe, there was an emphasis on understanding the business culture in specific corner of the world.
Antonio Roberto Cortes, CEO of MAN Latin America, the leading truck manufacturer in Brazil, noted that his company’s success is based on being receptive to change and an ability to adapt to local conditions and needs.
That includes constructing a simple but efficient manufacturing plant that employs a modular approach to truck manufacturing, creating vehicles tailored to customers’ needs that are robust enough to handle a plethora of unpaved roads and focusing on sales marketing and cutomer service while letting suppliers put all of the components together.
Investors, too, are advised that their profits hinge in part on understanding the local business and cultural climates. “Brazil has shed the ghosts of its past, when there was more faith in government involvement and less interest in private enterprise,” Raul Herrera, a partner in the law firm Arnold & Porter that represents the Brazilian government, said. There is a good reputation for corporate governance in Brazil, Herrera said, although there is a lack of investor protection for Brazilian companies doing business overseas. He suggested that Brazil should pursue participation in international treaties to protect investors doing business abroad.
Enzo Villani, Cornell MBA '07, CEO and president of the international financial consulting firm Villani Advisors, said foreign investors are advised to focus on the growing agribusiness sector and technology firms, noting that investment funds from China, the Middle East and Europe, as well as the U.S., are providing capital in Brazil, at different levels of support.
For businesses looking outward and pursuing international expansion, an improving national economy offers hope for the future, while hiring the best and brightest locally and abroad is critical, said officials from two multinational companies based in Brazil.
Leonardo Mattiazzi, vice-president of software developer and Web design firm Ci&T, noted hat his company employs developers and engineers from all over the globe, with centers in Brazil, China, Argentina and the U.S. His clients include corporate giants Johnson & Johnson and Coca-Cola. “Technology is all about the people,” he said. “Talented people can be found anywhere, but you need workers with a mindset focused on creating an environment for innovation and excellence, and let them develop their talents.”
Todd Nelmark, managing director of chemical manufacturer Oxiteno USA (Ultra Group), said that his company’s international expansion also relied heavily on hiring individuals, including MBAs, who are adaptable, quick-learners and who understand the dynamics of the business they are in.
To compete outside of Brazil Oxiteno has established a science and technology board, drawing on the expertise of consultants from universities and research centers worldwide. “We have a competitive advantage in that we take a team approach. We develop our products with our customers, and use global forums to build the knowledge base,” he said.
Nelmark, an American who has worked in many parts of the world, noted that understanding cultural differences is critical to doing business in Brazil. “Brazilians are, for the most part, forward thinking and optimistic. But they also are more relaxed about time and are more touchy-feelie than people in America or Europe.”
One of the lessons, then, for MBA students is that accepting frequent hugs and learning to conduct business over four-hour lunches may not seem like critical components of economic development, but such cultural differences can’t be overlooked by those engaging in emerging markets.
Cortes, of MAN Latin America, provided some basic instruction of his own for future business leaders heading out into the wide world: “Be willing to change, be optimistic and enjoy what you do. Good luck!”
Reported by Jay Wrolstad. Additional report on the conference and Brazil's leadership position with biofuels is available here.