International Business in General, These Essay

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Brazilians score highly on uncertainty avoidance -- where Americans may be willing to accept a certain degree of ambivalence and leave details unfinished, Brazilians are less likely to do so (Hofstede, 2009).

These differences can have a significant impact on business activities. At the broader cultural level, the government is much more actively involved in the economy in Brazil than in the United States. Where a firm can do business in the U.S. without running into anything more than routine government paperwork, in Brazil the government may take an active role in transactions of all sizes. The public interest and greater good are taken into consideration when making decisions, not just the firm-specific economic consequences of a deal. It might be difficult for American companies to adjust to this high level of government intervention in business activities, especially when this intervention occurs post-deal. Difficulties in dealing with the Brazilian government may be compounded by the country's relatively high rate of corruption (Michener, 2011).

At the firm-to-firm level, the cultural differences between Brazil and the United States can manifest in a number of ways. Because of the difference in power distance, Brazilians are likely to want to negotiate with their equals. If the CEO of a Brazilian company arrives at a meeting and the U.S. firm sends only lower level representatives, this will be taken as an insult, even if the lower level representatives are far more qualified to conduct the negotiation.

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The lower level of tolerance for uncertainty also means that contracts need to be negotiated and written in full. Details are not to be hashed out later after an agreement in principle.

Deals are also affected by risk aversion. Americans -- and by extension their companies -- have embraced their economic freedom with a willingness to take on relatively high levels of risk related to most companies. In Brazil, this is not the case. The Brazilian side of any negotiation is likely to reject any risky aspect of a deal. They may also seek to offload some of a project's risk on the willing U.S. partners.

Overall, the differences between Brazilians and Americans are not insurmountable, but they do present challenges on a number of fronts for companies seeking to do business in Brazil. As a result, American companies need to familiarize themselves with the finer points of Brazilian culture -- on a much deeper level than Carnival and soccer -- and how those points might affect the business climate between the two nations and the business relationship between two firms from these countries. Understanding how to navigate cultural differences is a critical component of doing business overseas.

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