Business System Analysis for Brazil

Mini Case Study 3.2

Business System Analysis for Brazil

1

The table provided in the next two slides, along

with the information in the case study, will help

your team define Brazil’s business system.

2

Governance Description Analysis of Brazil

Ownership System

• How is the ownership of companies distributed among the public sector, the corporate

private sector, the family controlled sector, the associative sector (cooperatives,

associations)?

• What is the relative weight of big business vs small business?

• How is power practically distributed in business between shareholders, managers,

trade unions, authorities, pressure groups?

• What is the weight of diversified conglomerates?

Networking System:

• What is the relative weight of vertical integration, conglomeration vs contractual

relationships in the coordination of firms?

• What is the relative importance of alliances, partnerships, joint venture business

associations in the business landscape?

• What is the importance of ethnic, religious, regional, or alumni networks?

Management System:

• Is the decision making primarily autocratic, participative, or bureaucratic?

• On which criteria does career advancement depend: performance, loyalty, nepotism,

membership of a particular group.

Social Culture

Rationality

• How far does society agree that the main mission of business is to create value for

shareholders, stakeholders, and society?

• Are goals set for the long or short term, and are they growth or profit oriented? • Does

society consider that the appropriate process for reaching business objectives should

be

democratic or autocratic, through negotiation or dialogue?

Authority • Is hierarchy or egalitarian democracy the main basis for authority? • What are the

sources of power in the society: religion, castes, wealth, ethnic belonging, university

degree and so o

Identity • Is individualism or group-oriented collectivism prevalent in the society? • If group

orientation, what is the relevant grouping (family, clan, company, religion, region,

ethnicity)?

Assessing a Business System – Case Study 3.2: Brazil

3

Assessing a Business System

Institutional Fabric Description Analysis of Brazil

Financial Capital

• How is capital allocated: planned economy, banks, financial markets, or informally?

• Are financial markets open and transparent?

• Is foreign capital welcome

Human Capital

• What is the quality of primary, secondary and tertiary education?

• Is education primarily practical or theoretical?

• Are on-the-job training and apprenticeships encouraged?

• What is the role (if any) of trade unions?

• Are trade unions organized at the level of companies, industries, or nationally?

• How strong are the craft-based unions?

• Does the employment system encourage long-term tenure? Flexibility? Turnover?

• Is there a healthcare social security system? Unemployment compensation?

Social Capital

• Is the society based on interpersonal trust, institutionalized trust (in the law) or

hierarchical trust (in leadership)?

• In the case of interpersonal trust, what is the reference group (family, school,

religious, clans and so on)?

Role of the State • Is the government interventionist in business or labor conflicts?

• Is the market highly regulated?

• Is there a central planning authority?