Most common challenges faced by Brazilian Businesses

Growing at a rate of 5% per year over the past ten years, Brazil is one of the fastest growing Economy in the world. However, some barriers are still hard to overcome and directly affect the “doing business” part.

Through this article, I have decided to emphasize the most common problems that organizations face in Brazil in order to give you a better understanding of what  you should be careful if you become a leader in Brazil.

      First, there is a high staff turn-over within the workplace. Brazilians do change jobs very often and are not afraid to do so because it is a part of their tradition in which a successful career is directly linked to money and not to the construction of a company or a brand. Be aware that they are used to leave the organization without any warning before, leaving the employer in a tought situation as he will have to rush the hiring process to replace the employee. Also, when an employee leaves, he creates a lot of problems, like both generating costs for the hiring of a new employee and overwork for other employees, which tend to negatively affects the workforce performance and may lead to poor development of the workflow.

So, if you intend to lead a Brazilian business, be careful to spend lots of time discussing with your team and give regular feedback to your employees in order to make them feel valued for their work and increase their satisfaction.




The second challenge that I would like to talk about is the high amount of taxes paid by Brazilian Businesses. Brazil still has the highest tax burden of all BRIC countries (Brazil, Russia, India and China). When opening a company in Brazil, it is estimated that entrepreneurs spend at least 67% of their profits with taxation matters because Brazil has got more than 275000 norms regarding the payment of taxes.

So, before doing business in Brazil, inform yourself on all the taxes usually charged in this country, such as the CIDE, the COFINS, etc, with the aim of forecasting your future expenses.

         
    Thirdly, delay and absenteeism is also threatening at a high level the growth of Brazilian businesses because delay and absenteeism affect negatively the workflow in several different ways.


In fact, because this absenteeism is mostly caused by diseases, stress, demotivation or the willingness to be fired by employer, if you are leading a team in Brazil you have to remember to look carefully after your employees by listening attentively to them, asking them about their satisfaction within the organization, fully engaging them, recognizing their individuality, what stimulates them and keeps them striving to do their best, while maintaining a collaborative environment where everyone is working toward the same end goal. And as Richard Branson, founder of Virgin Group, perfectly said : « take care of your employees and they will care care of your business ».





    Also, benefits are another challenge that Brazilian companies have to deal with. Benefits are what make hiring in Brazil so expensive and is one of the reasons why Brazilians change working position so frequently. But, contrary to what you are probably thinking, I am not speaking only about mandatory benefits but also about non-mandatory benefits. Among the mandatory benefits, we could find extra paid vacations, paid transportation, the 13th Salary, meal’s ticket for employees working more than 8 hours a day, or also the paid leave (four months for pregnant women and five days for men who have become fathers). Among the non-mandatory, we could mention the life insurance and health insurance, the day care center, and the Programa Participação nos Lucros e Resultados (profit sharing plans).

Thus, to avoid loosing any employees within your business, I would suggest you to not forget rewarding your team when they deserve it. For example, by promoting the most efficient workers, giving them rewards when they deserve it, etc.



    Finally, you have to be conscious of the high percentage of the overtime payment due to your employees, directly linked to holidays. In fact, Brazil has got 11 federal holidays and each Brazilian city has its own holidays. For example, Sao Paulo has its birthday on January 25th and celebrates the revolution in July 9th. Most Brazilian holidays are of religious nature and very much related to traditions, like Carnaval. Officially, Carnaval is only a holiday on Tuesday, but most people take off Saturday, Sunday, Monday, Tuesday and half of Wednesday. Be aware that a a leader you are not obliged to give away this day between the holiday and the weekend, however, you are very expected to do so if you want to gain the respect of your team. 

Nevertheless, the negative outcome of this kind of holidays is that Brazilian employees are used to work extra hours to compensate for these days, and companies are required to pay overtime of 100%. So, the advice that I could give you is to spend time on creating a structured environment in order to be proactive in time management and avoid employees to work extra hours. To achieve this, think about planning tasks, developping a precise schedule, and communicating with your team members in order to be fully aware of their own schedule. 

And as Joyce Meyer claimed: "we don't grow when things are easy, we grow when we face challenges". 

 

Sources:

Shaw, C. (June 21, 2015). Virgin shows links between employee experience and customer experience. Retrieved from:
https://beyondphilosophy.com/virgin-shows-links-between-employee-experience-and-customer-experience/

Novais, A. (2012, June 25). The 7 Most Common Problems for Businesses in Brazil. Retrieved from:  http://thebrazilbusiness.com/article/the-7-most-common-problems-for-businesses-in-brazil

Kelley, M. (2015, August 5). The spiritual importance of scheduling. Retrieved from: http://www.lifeway.com/leadership/2015/08/05/the-spiritual-importance-of-scheduling/

Brazil - Hofstede's Six Dimensions of Culture

If you are reading this blog, it‘s maybe because you have been asked to manage a team in Brazil, and even if you are getting excited about the opportunity, you are also nervous about making cross-cultural faux pas. You are conscious that cultural differences can act as a barrier to communication, and that they could affect your ability to build connections and motivate people. 

Through this article, I will explain you how the use of Hofstede's Six Dimensions of Culture could help you to work effectively with Brazilian people, by making you understand the deep drivers of Brazilian culture.

But first, let me talk to you about the Hofstede's Six Dimensions of Culture. In fact, at the end of the 1970s, Psychologist Dr Geert Hofstede published his cultural dimensions model where he identified six dimensions that could distinguish one culture from another: Power Distance Index (high versus low), the Individualism Versus Collectivism Dimension, the Masculinity Versus Femininity Index, Uncertainty Avoidance Index (high versus low), the Pragmatic Versus Normative Index (known as Long Term Orientation), and the Indulgence Versus Restraint Dimension

The Power Distance Index (PDI):

This dimension refers to the degree of inequality that exists, and is accepted, between people with and without power.

With a high score of 69, Brazil reflects a society that believes in an unequal, hierarchical distribution of power. The authority is centralized and Brazilians accept the privileges that come with power. According to Hofstede, “the different distribution of power justifies the fact that power holders have more benefits than the less powerful in society”. 

In addition, in Brazil, the family provides refuge and safety, but it also implies responsibilities and duties’ restriction. For example, Brazilian children are committed to their parents, as are the parents committed to them all their growing lives’. In fact, children are expected to care for their parents throughout their life and, if living away, to contribute to their welfare because they strongly believe in the Asian saying: ‘You can get another wife or husband but not another mother or father’.

Individualism vs. Collectivism:

This dimension refers to the strength of the ties that people have to others within their community.

Brazil scores 38 in the Individualism Index which means that its society values more collectivist behaviors than individualist behavior. In fact, Brazilians are integrated into strong cohesive groups, especially represented by the extensive family who continues protecting its members in exchange of both respect and loyalty. In fact, as you probably already understood, Brazilians believe in placing the interests of others before their individual ones, and they like to take responsibility for one another's wellbeing.

Therefore, doing business in Brazil implies spending time on building up trustworthy and long-lasting relationships (as I explained in my article- Brazil: A collectivist Culture!). And, if you are doing business in Brazil, remember one thing: Brazilians do business with people, not with companies or organizations. Besides, in the working environment too, family relationships are really important in Brazil where older generations are supposed to help their younger relatives to be hired for a job in their own company. Therefore, if you are doing business in Brazil, you should not be surprised to encounter in the same company Brazilians belonging to the same family.

Masculinity vs. Femininity:

This index refers to the distribution of roles between men and women. 

With an intermediate score of 49 on this dimension, I could easily claim that the Brazilian culture is both “tough” and “tender”. Brazilians value the assertiveness, competition and material rewards for success (masculine society) as the same level as they value the cooperation, consensus and lifestyle (feminine society). In fact, the Brazilian society has a perfect balance between those two ratios but still place higher value on people, quality of life and nurturing. In Brazil, modesty is perceived as a virtue. 


Within the workplace, leaders don’t give too much importance on competitiveness, resulting in a friendly atmosphere, and places greater value on cooperative efforts and service. In fact, if you are a foreigner, it is not really difficult to adapt yourself to a Brazilian business regarding this dimension as Brazilian leaders possess a strong concern for social harmony and human relationships. They tend to interprets sex roles more fluidly than in many other countries worldwide and places greater value on cooperative efforts and service.

Uncertainty Avoidance:

This dimension describes how well people can cope with anxiety.

At 76, Brazil scores high on the Uncertainty Avoidance Index, which means that Brazilian society show a strong need for rules and elaborate legal systems in order to structure life. In fact, Brazilians are used to obey laws and rules made by higher institutions and, according to the Hofstede’s model, in Brazil “if rules however cannot be kept, additional rules are dictated”.

But, Brazilians also need to have some good and relaxing moments in their everyday life, chatting with colleagues, enjoying a long meal or dancing with their guests and friends.

To maximize results from a team in Brazil, you should be aware that, within the workplace, Brazilian employees love to follow guidelines and precise rules. To succeed in their job, they need to be guided and are not used to unknown situations as they are risk averse. Thus, it is important to create a safer and consistent working environment by structuring the assigned tasks, defining the role of each stakeholders and planning activities. Finally, if you are leading in Brazil, you should think about giving some leisure time to your employees because Brazilian society enjoys life and discussing with their counterparts.

Long-Term vs. Short-Term Orientation :

According to Hofstede, this Index describes “ how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently.”

Brazil scores at 44 in the Long Term Orientation Dimension, which is an intermediate score. However, Brazil will be more considered as a normative society than a society with pragmatic approach, as Brazilians prefer to respect the past traditions and norms of their country which has contributed to build the unique identity of Brazil. They are viewing societal changes with more suspicion, but are not against those changes if they are beneficial for the society; above all, the newest generations who are more supporting the modernism movement with the aim of improving the Brazilian economy for the coming years.

So, if you are doing business in Brazil, be careful to perfectly balance the expectations of the oldest generations and the ones of the youngest generations, because conflicts could appear rapidly, with the oldest employees concentrating more their efforts and beliefs on matters related to the short-term, and the youngest, more focused on concentrating their efforts on future-orientated goals.

Indulgence vs. Restraint:

This dimension refers to the degree to which societies can exercise control over their impulses and desires.

With a high score of 59, Brazil is an Indulgent society. In fact, Brazilians are possessing freely satisfy basic needs and behavior, and they cannot easily be motivated with material reward. They will feel more reward by enjoying moments of pleasure in their life rather than by competing with others. If you are leading a Brazilian team, don’t show your negative emotions because, in Brazil, people have a tendency towards optimism. In addition, they place a higher degree of importance on leisure time, act as they please and spend money as they wish; so, learn to not be always authoritative with them by letting them act as they want sometimes. 

Brazilian Social Issues

Nobody can refute the fact that Brazil is a stunning country, with a very vast amount of natural beauty and a strong cultural identity, rich in traditions, colours, flavors, customs, and languages.
However, as in many South American countries, Brazil has to face lots of social issues, which tend to make people think that the country is not a safe place.

I couldn’t start this article without first speaking about the problem of poverty in Brazil. Did you know that the richest 10% of people in Brazil have access to over 40% of the country’s income? And that the poorest 10% receive about 1% of the income? Everyone who has ever been in Brazil would be able to certify that this poverty is visible and tangible all over the country. And this contrast is even clearer by the fact that the rich live alongside the poor (as you can see in the picture). Some of the best-known slums, also called favelas, are those that cling to steep hillsides in Rio de Janeiro. In those dangerous places, the constant promiscuity leads to unsanitary conditions, and pollution. Besides, people don’t have any access to water or a decent food, so, they suffer from malnutrition, and diseases. The infant mortality rate (IMR) is really high, which is another social issue that affect badly the country. However, the government is not rejecting these people anymore, like it did by the past, but in contrary many community initiatives have been set up in order to help the hungry and the homeless. 

The other social issue that I would like to talk about is the high level of crimes. Brazil is one of the most unsafe place in the world. The most common forms of crime in this country include mugging, robbing, kidnapping and gang violence. According to Rapoza Kenneth,"Brazilian cities dominate a list of the 50 murder capitals of the world". But, in addition to the crime, there is another danger that threat the country, which is the corruption and violence made by the police themselves. Many Brazilians don't sue their attacker because they fear that this action could result in their death as the police is highly corrupted by gangs, and particularly in the slums. In fact, Joshua Hammer claimed that in those places “drug-trafficking gangs controlled everything” as “the police rarely entered out of fear they could be ambushed in the alleys.”

This article allows me to talk to you about the lack of education, which is another issue directly threatening the country and negatively affecting the Brazilian's economic growth and development. The number of illiterate people in Brazil is still really high as the government has always ignored this problem throughout the years. In fact, according to the article "The Brazilian Educational System", "nearly 18% of the Brazilian population is functionally illiterate, meaning that they know words and numbers but are unable to comprehend a sentence or perform a simple mathematical operation." Besides, poor families tend to encourage their children to start working as soon as possible because it can be another source of income. So, despite that it is being illegal to employ a child less than 16 years old, child labor amongst poorer children is very crucial. 

During the last decade, Brazil’s public investment in education increased steadily between 2000 and 2010 by 2.1 percentage points, from 3.5 percent to 5.6 percent. However, even if the Brazilian government is paying to create programs for supporting children from all areas of the communities to have access to education, Brazil still lags behind developed countries such as Australia, Germany, the United States, France, etc.

Sources:

Hammer, J. (January 2013). A Look Into Brazil’s Makeover of Rio’s Slums. Retrieved from: http://www.smithsonianmag.com/people-places/a-look-into-brazils-makeover-of-rios-slums-165624916/?no-ist

Rapoza, K. (2016, January 29). Brazil Is Murder Capital Of The World, But Rio Is Safer Than Compton, Detroit, St. Louis... Retrieved from: http://www.forbes.com/sites/kenrapoza/2016/01/29/months-before-rio-olympics-murder-rate-rises-in-brazil/#4effa48a1a0b

Nes, C. F. (2015, August 12). The Brazilian Educational System. Retrieved from: http://thebrazilbusiness.com/article/the-brazilian-educational-system

Is the Brazilian society misogynist ?

Recently, a trend in Brazil has appeared and seems to increase more and more every year: the place of women in Brazilian society. So, how easy is it for women to join the business world in modern day Brazil? 

Over the last decade, Brazil’s women are entering the business world at a rate never seen before and have been making quiet significant advancements. This is due to the extreme willingness of Brazil to make economic trade with western countries, where women are treated with fairness and respect by the men.

At the opening of the U.N. General Assembly in 2011, Dilma Rousseff, first female president of Brazil, has claimed that the 21th Century was going to be the one of women. “I speak to you with a feminine voice; it’s the voice of democracy, of equality.” Today her words seem to be ringing true as the trend of women entering into the Brazilian business world steadily increases. According the population estimates of the labor force made by the World Bank, between 2001 and 2015, women comprised 43.8% of the entire Brazilian workforce. Besides, Women have narrowed the gap in education and are now graduating at a faster rate than men: nowadays, 60% of all college graduates in Brazil are women.

Nevertheless, despite this increasing trend, when it comes to senior level positions within the business world in Brazil, the lack of women is still predominant. In an Executive Opinion Survey done by the World Economic Forum, the ability of Brazilian women to climb the corporate ladder was measured and received a mediocre score of 4.06 out of a possible scale of 7. 

In fact, Brazil is a country which still faces deeply gender differences between males and females culture in term of job position, communication, health, social awareness and orientation to the environment. Gender roles and inequality do exist in Brazilian society. While the percentage of women working outside the home has increased significantly over the last several decades (between 1950 and 1980), in term of salary, women earned only 28% of what their male counterparts do in 2015. In fact, the gender differences in the workplace are more emphasized in Brazil than in the United States.

Discrimination within the workplace still exists in Brazil, and seems to be the biggest barrier for women to get promoted fairly. According to Time, in 2011, 40% of Brazilian women felt that they were currently receiving treatment at work that was inferior to their male colleagues simply because they were women. According to Time, in 2011, 40% of Brazilian women felt that they were currently receiving treatment at work that was inferior to their male colleagues simply because they were women.

Brazilian men have always respected the “old” traditions. Thus, the gender-based etiquette, such as opening the door for a woman, is not considered as a sign of sexism but of good upbringing. If you are a woman, lucky for you, because you will rarely pay the bill at the restaurant; and you can also expect to be complemented a lot on your look, appearance and dress sense.  

However, it seems that men’s behaviors could still be considered as misogynist sometimes. Indeed, even if a women can afford to hire a nannie and work full time within an organization, she is often dissuaded from doing so, as her first placed is perceived to be with children. For many in Brazil, the word mother is synonymous with the word woman. So, the gender differences still exist with women doing the cooking, cleaning, doing the laundry and taking care of the children, while men do more physical jobs around the house such as home repairs.

Sources:

The World Bank. (2015). Labor force, female (% of total labor force). Retrieved from: http://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS

The World Economic Forum. (2014). Executive Opinion Survey . Retrieved from: http://www3.weforum.org/docs/GGGR14/GGGR_CompleteReport_2014.pdf

Hewlett, S. A. (2011, October 24). Is a Woman in Brazil Better Off than a Woman in the U.S.? Time. Retrieved from: http://ideas.time.com/2011/10/24/is-a-woman-in-brazil-better-off-than-a-woman-in-the-u-s/

Conversation Topics: DO & DON'T

Doing business in Brazil implies a lot of face-to-face time to have small talks in order to establish strong working relationships. In other words, it is really important to show personal interest in your Brazilian business contacts as Brazilians do business with people, not with companies or organizations. 

Nevertheless, as in many countries, you should be knowledgeable about the good topics of conversation among business people in Brazil and the ones you may wish to avoid.

First of all, when you meet someone for the first time, it is polite to say ‘muito prazer’ (‘my pleasure’).  Expressions such as ‘como vai’ and ‘tudo bem’ are common forms of saying hello once you know someone and can show you are making an effort to know them.

Many people will say that talking about soccer is a good topic to start a dialog with a Brazilian. I personally think that it may be seen as kind of cliche, but if you don’t have any subject in mind, and you are enough knowledgeable about soccer, it is still great to talk about it. Nevertheless, it is good to remember that soccer is like a love or hate thing in Brazil; not everyone is crazily passionate about it, actually a lot of people cannot stand it.

Safe topics to talk about with Brazilians could also be food, travel, arts, literature or family life. Finally, as Brazilians like to know the person they are dealing with and are very interested in foreign cultures, you could speak about you, talk about life or talk about your country, the countries that you have visited, what restaurants you visited and so on.

However, when speaking to Brazilians, avoid themes like Carnaval, samba, violence, beaches, Rio de Janeiro, women, favelas, corruption, deforestation and other things that Brazil is stereotyped about. Indeed, it could give the impression that you don’t really know the Brazilian society as you have just the basic knowledge of every foreigner.

Besides, speaking about Politics and the Economy in Brazil are also complicated and polemic matters to discuss about. Politics in . Finally, talking about too personal topics could really embarrass your counterpart, so, keep those kinds of conversations for your family or close friends.





Sources:

Mello, J. (2012, June 17). Converse like a Brazilian. Retrieved from: http://thebrazilbusiness.com/article/converse-like-a-brazilian