1

BUSINESS IN SOUTH AMERICA

Concepts from Brazil and Chile


Prepared for Copper Range







Francarlo Barilla 5410339 Jirapan Kunthawangso 7264364
Ligia Morffe 7261926 Thi kim anh Phan 7253494



HBI552: Business in Asia, the Americas and Europe

9 September 2011




i
1. Executive Summary

Copper Range, a South Australian copper-gold-uranium miner, is an exploration company that is
looking to expand its explorations beyond its Australian boundaries. After unsuccessful
negotiations that carried out in Brazil, Copper Range has contracted us to provide them a synopsis
on the cultural considerations that need to be considered before conducting business in a foreign
market. As with Brazil, Chile has also been identified by Copper Range as a possible market
location where it could establish a joint venture with a reputable Chilean Copper Mining
company. Referring to appendix one, Copper Ranges inconclusive meeting between its Australian
Business Development representative and Brazilian executive, served as a significant exercise as
it highlighted to the companies board that they were not ready to operate cross-culturally. As
cultural analyst, the basis of this report is to provide Copper Range executives with the necessary
information to better understand both countries national environments and cultural mannerisms
when doing business.

The purpose of the report is to provide Copper Range with a greater understanding of the various
informal cultural differences that need to be considered before conducting business in either
country. The objective is to provide a general consensus that although similar, the cultural
dimensions of both Chile and Brazil are vastly different in a business context. Commencing with
a PESTLE and SWOT analysis of both countries, the report will follow with a comprehensive
look at the various cultural dimensions that cultural analyst such as Hofstede and Trompenaar
propose. Correlating with their external business environments, a summary on the international
strength of both economies has also been conducted to better understand how internationalized
both market economies are. Drawing on the cultural differences between both countries, the final
section of the report attempts to provide Copper Range with a better understanding of the nature
in which business is conducted in both countries. Looking at the relative importance of personal
relationships, the power distance between management and lower subordinates, and the
significance that dress and personal appearance play in workplace, are a few of the areas that
have been analysed comprehensively.





ii
Impartial research on the ethical standards and principles of both countries illustrated that the
morals incumbent in Chile and Brazil are vastly different to the mandatory morals that most
Australian businesses encompass. Although Brazil encompassed the market characteristics that
posed the most growth opportunities and financial reward, it was envisioned that the relative
political instability and high level of seemingly acceptable corruption was something too
significant to combat in Brazil. Chile was the more conservative recommendation that was felt to
offer a stable market economy that had little corruption, minimal government intervention, high
transparency, and a business culture that is adaptive to an Australian expatriate. Based largely on
the concept of morality, it was therefore recommended that Chile be the appropriate market that
Copper Range establishes a joint venture in.





iii
2. Table of Contents

3. Introduction ...................................................................................................................................... 4
4. National Characteristics ............................................................................................................... 5
5. Cultural Dimensions ...................................................................................................................... 9
6. International Dynamics: Size versus Efficiency ............................................................... 12
7. Business Practices in Chile ....................................................................................................... 15
8. Business Practices in Brazil ..................................................................................................... 17
9. Recommendations ...................................................................................................................... 19
10. References ...................................................................................................................................... 20
11. Appendices ..................................................................................................................................... 24
Appendix One: Minutes from Brazilian negotiation .................................................. 24
Appendix Two: Brazil PESTLE Analysis ........................................................................ 26
Appendix Three: Chile PESTLE Analysis ...................................................................... 29
Appendix Four: The Economist Magazine Worldwide Cover 2009 Edition ... 31
Appendix Five: Brazils GDP Growth Rate Chart ....................................................... 32
Appendix Six: Chiles GDP Growth Rate Chart ........................................................... 32
Appendix Seven: SWOT ANALYSIS ................................................................................. 33
Appendix eight: Halls Cultural Dimensions .................................................................. 35
Appendix nine: Alternative Culture Studies ................................................................. 35
Appendix ten: Trompenaars Cultural Dimensions ................................................... 36
Appendix eleven: Schwartzs Cultural Dimensions .................................................. 37
Appendix twelve: Ronen and Shenkars study Error! Bookmark not defined.




4
3. Introduction

The world of international management has brought about many cultural complexities that all
multinational businesses must address in their cross-border pursuits. Rather than just focusing on
the formal strategies and operations of an organisation, multinationals must also draw
considerable focus on the informal behaviors that best describe the culture of the relevant host
market. The importance of understanding the uniqueness of cultures around the world and how to
apply the skills of cultural understanding are necessities that all multinationals must consider to
become successful in the global business environment.
The purpose of the report is to provide Australian Copper Mining company, Copper Range, with
a synopsis into the cultural dilemmas that will be faced in both Brazil and Chile. Rather than
focus solely on the formal requirements that are addressed in most domestic business
negotiations, this report attempts to analyse the various informal areas that will impact the way
that business is conducted in both countries. After unsuccessful attempts to negotiate a joint
venture arrangement in Brazil, (See Appendix One) Copper Range commissioned this study to
provide further insight into the relevant areas that they neglected in there preliminary cross-
boarder discussions. Rather than selecting a host market based solely on economic validity, this
report attempts to provide further emphasis on the cultural significance of both countries ways of
doing business and how that will impact Copper Ranges ability to develop a sustained
competitive advantage.
The scope of the report will commence with a PESTLE and SWOT analysis on both countries,
which are used to give Copper Range a greater understanding of the type of external environment
in which domestic firms operate. This information is critical to understanding the nature of the
way that domestic firms operate in both countries, and the relative strengths and opportunities that
are present in both markets. Diversity studies, such as Hofstede and Trompenaars Cultural
Dimensions, have also been analysed to provide further insight into the inhabitants and national
cultures of both countries (Itim International 2009a). Whilst the overriding focus of this report
will address the numerous cultural differences between Chile and Brazil, this report will also
consider the market attractiveness of both countries in the context of the globalized world. The




5
succeeding stage of the report will then analyse the fundamental characteristics that describe how
business is conducted in both countries.
4. National Characteristics

When analyzing the national characteristics of two different countries it is imperative to conduct
thorough analysis on their external business environments PESTEL and SWOT analysis.

The SWOT analyses in appendix seven help provide further evaluation on the Strengths,
Weaknesses, Opportunities, and Threats of an investment in either country. Some of the persistent
threats in Brazil relate to its economys high reliance on its exports (notably Iron Ore), rising
interest rates and substantial public debt (Franko 2010). Correlating to these threats, notable
weaknesses in the Brazilian market pertain to its lack of infrastructure investment, inefficient tax
system and corrupt bureaucratic system (Franko 2010). However, from the SWOT analysis it is
conclusive that Brazils economy still offers many positive opportunities for investors as the
recent resource boom and economic reform will continue to make Brazil an attractive investment
haven for many years (Franko 2010).

Similarly with Chile, the SWOT analysis draws foreign investors to the nature and threat of
Chiles volatile environment, which is prone to natural disasters. Among the environmental
threats in Chile, the unequal distribution of wealth in Chile is seen as a significant weakness of its
national economy (Duncan 2009). Whilst many foreign investors are able to reap benefits from
foreign investments in Chile, very little is actually remunerated towards society (Duncan 2009).
On the other hand, a favorable tax regime and a strong willingness of domestic institutions to
allow foreign investors to create wealth with no restrictions, provides many strengths that make
Chile an attractive investment market (Duncan 2009). Unlike Brazil that is highly reliant on its
export commodities, the Chilean market is constantly diversifying itself to include energy and
construction as possible growth areas in the future (Duncan 2009). Chiles vast trade relations
also offer promising opportunities to foreign investors, as Chilean law has ratified an agreement
that allows foreign investors to use Chile as a base to enter other countries aligned to it (Duncan
2009).





6
A comparative PESTEL analysis on both Brazil and Chile has been provided below. Please refer
to Appendix two and three for a more comprehensive PESTEL analysis of both countries.


Political
Brazil enjoys a relatively stable democratic political system amidst widespread corruption
and bribery (Investment International 2009)

Chile has maintained an open and transparent political system that has strong policy ties
towards social welfare and economic stability (CIA World Factbook 2011)

Current public debt in Brazil (end of 2010) is 59.0% of GDP while in Chile its remained
low at 9.2% (CIA World Factbook 2011). An increase of 2.5% from 2009

Economic
Brazil is the largest economy in South America, emerging as a powerhouse among other
BRIC nations

Chile is the fastest growing economy in South America, growing by a further 5.2% in
2010 (CIA World Factbook 2011)

Brazilian economy is highly dependent on inbound Foreign Direct Investment (FDI) and
exports of Iron Ore, Sugar and Coffee (CIA World Factbook 2011)

Brazils unemployment decreased from 8.1% in 2009 to 6.7% in 2010. Chiles decreased
from 9.6% in 2009 to just 7.0% in 2010 (CIA World Factbook 2011)

Brazil and Chile both have well-developed agricultural, mining, manufacturing, and
service sectors (CIA World Factbook 2011)





7
Social
Brazil has a very wide disparity between those living in major cities and those living in
poverty. 26% of the population live under the poverty line, while only 11.5% in Chile
(CIA World Factbook 2011)

The Spoken language in Brazil is Portuguese. Whereas in Chile it is Spanish

Over 70.0% of people in both Brazil and Chile are Roman Catholics. Brazil also has a
large group of Protestants (15.0%) whereas in Chile there are many Evangelics (15.0%)
(CIA World Factbook 2011)

The literacy rate of those 15 years and older is 88.0% in Brazil and higher at 95% in
Chile (CIA World Factbook 2011)

Technology
Brazil and Chile both have low patent fillings and R&D spending of only 1% of GDP
(CIA World Factbook 2011)

Brazilian infrastructure is generally moderate, but is developing quickly up to the
standards of the developed world

Chile has well-developed telecommunication infrastructure. Its broadcast media and
telephone system privatized in 1988, drawing rapid new developments (CIA World
Factbook 2011)

Brazil has a very well developed tourism industry which has helped them attract large
scaled events such as the 2014 Fifa World Cup and the 2016 Rio Olympic Games

Environment
Brazil has very rich biodiversity with the Amazon forest covering almost half of the
country (CIA World Factbook 2011)




8

Chile is prone to natural disasters such as earthquakes, volcanic eruptions and tsunamis
(CIA World Factbook 2011)

Brazil has ongoing issues with deforestation in the Amazon Basin, as well as water and
air pollution which is caused by improper mining activities (CIA World Factbook 2011)


Legal
Brazil has a very lengthy business registration process (152 days) (Oppenheimer, A
2001). In comparison, it only takes about 28 days to register a business in Chile

In Brazil, it takes an average of 566 calendar days to enforce a contract in court
proceedings, whereas it takes only 305 days in Chile (Oppenheimer, A 2001)

Chile reformed its Criminal Procedure Process in 2000 promoting Human rights,
transparency in its judicial system, and shaped imperative changes towards opening its
economic market (Gomez, S 2005)

Brazil has a very complicated tax system. The comparative strength of legal rights in
obtaining credit (scale 0=weak 10=strong) Brazil is ranked 3 according to Trading
Economic (Trading Economics 2011e)

Chile practices anti foreign-bribery laws in conjunction with the OECD and UN drug and
crime commission





9
5. Cultural Dimensions need in my report

In an international business context, gaining a deep understanding of cultural differences is
crucial in maintaining a good relationship with business partners. Issues regarding cultural
sensitivity need to be addressed to avoid possible conflicts and culture clashes. Thus, the
Hofstede typology
1
of cultural dimensions, a widely known reliable index of categorized cultural
values, is used as a framework to compare and contrast the national cultures of Chile and Brazil.
Geert Hofstede Cultural Dimensions

Source: (Itim International 2009a) Source: (Itim International 2009b)


According to Hofstede, both Brazil and Chile rank high in Uncertainty Avoidance (UAI) scoring
76 and 86 respectively (Itim International 2009a&b). The higher rank of UAI in Chile indicates
that laws and rules are implemented more strictly, allowing for less acceptance towards sudden
change and risk. Even though Brazil has a slightly lower UAI rank than Chile, its large population
must be taken into account, as Brazil is still considered as a high uncertainty avoidance society.
The lowest Hofstede dimension of both countries is Individualism (IDV). While the average
South American score is 21, Brazil is considered as a slightly less collectivist society with a
higher tendency towards personal needs and aims (Itim International 2009a). Chile, on the other

1
The five cultural dimensions are: Power distances index (PDI), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance
Index (UAI) and Long-Term Orientation (LTO). PDI is the indicator of a countrys level of equality. A country that has a prevalent
class system will be ranked highly in this area. The IDV refers to the level of individualism in society. A collectivist society such as
China, will have a low rating in this index. The MAS indicates the equality of women in society and how people strongly bond toward
each other. A male dominant society such as the United States will score highly in this index. The UAI dimension basically shows a
societys ability to tolerate unexpected circumstances and change. A country with a high UAI rating would be a very rule-oriented
society with many laws and regulations. This kind of society would be less likely to take risks and embrace change. Finally, the LTO
refers to a societys commitment to long-term values and tradition. If the society values common interest over self-interest, it is likely
to have a high score in this area.




10
hand, is more committed to harnessing strong family bonds and long-term relationships in both
business and society (Itim International 2009b).

The level of Masculinity (MAS) in Chile is much lower than in Brazil. Chile is regarded as a
feminine society that highly respects the rights of women and equality in society (Itim
International 2009b). Conversely, Brazil, whilst regarded as a feminine culture, is much more
assertive and goal orientated than Chile (Itim International 2009a). In saying this, however, their
masculinity ranking is still much lower than Western countries like Australia and the United
States who have Masculinity ranks just under 60 (Itim International 2009a). According to
Hofstede, both Chile and Brazil also encompass a unique tendency towards long-term orientations
when decision-making. Both cultures encompass a predisposition that looks to focus on the long-
term impacts of a decision rather than the short-term effects. However, Brazilians tend to have a
slightly shorter-term orientation than most other South American nations, persevering less than
these countries (Itim International 2009a).

Brazil also personifies a society that has a stronger power distance index (PDI) between those in
privileged position and lesser subordinates. The power distance index indicates that Brazilians
have a stronger inclination towards hierarchies and social status than Chileans. This is
exemplified in most Brazilian workplaces, as social hierarchies divide employees according to
power and status (Barker 2004). The high importance that Brazilians place on dress further
illustrates how rigid its society is towards hierarchies and materialism.

In addition to Hofstedes study, there are also other cultural dimension studies that attempt to
provide a broader view in distinguishing the cultural characteristics of various societies around
the world. These notably include; Trompenaar, Schwartz, Hall, Ronen and Shenkar, and Sirota
and Greenwood (See Appendix Nine). In order to provide Copper Range with the broadest
understanding of both Chile and Brazils national cultures, it is imperative to refer to the work
that these other cultural analyst have provided.




11
In reference to appendix eight, Hall classifies culture into three dimensions: context (High vs.
low), space
2
(center of power vs. center of community) and time (monochromic vs. polychronic)
(Changing minds 2011). In the dimension of space, Chile is categorized as center of community
where the ownership of space and boundaries is not so important. Problems with theft in Chile are
not perceived as extensive as Hall believes that people tend to be less materialistic than those in
Brazil (Changing minds 2011). Hall also classifies Chile as a monochromic culture that likes to
do just one thing at a time valuing orderliness and consistency. However, Brazilian culture is
clearly categorized as Polychronic. This indicates that Brazilians have a tendency to do multiple
things at the same time, explaining why negotiations in Brazil can often be lengthy and tiresome.
Most polychronic cultures are also classified as high context societies, personifying Brazilians
who are not generally seen to be direct people to deal with (Nardon et al 2009).








2
The information regarding Chile has not been explicitly mentioned, however it is impliedly understandable as the country falls into
the category of Latin America.




12
6. International Dynamics: Size versus Efficiency

Being regarded as the fifth largest country in the world and the largest in South America (CIA
World Factbook 2011) has enabled Brazil to gain superior weight over other South American
nations when it comes to business and foreign investment. Besides being a large market with vast
natural resources, Brazils economy has been experiencing growth in recent years that has help
stimulate immense investment opportunities in the country. In 2009, The Economist magazine
reported a 14 page special report of Brazils economic situation as Latin Americas big success
story (See Appendix Four). The report notes Brazils growth will continue as it further develops
oil fields, increases its demand for food products and natural resources from Asian nations, and
better allocates its own resources. The report concludes with the projection that envisions Brazils
economy to grow to become the worlds fifth largest economy in the next ten to fifteen years (The
Economist 2009). The magazine also notes Brazils growing presence in the world stage as it will
be hosting FIFAs 2014 World Cup and the 2016 Olympics in Rio de Janeiro (The Economist
2009).

Currently Brazils GDP (See Appendix Five) expanded 1.3% in the first quarter of 2011 over the
previous first quarter in 2011(Trading Economics 2011). Brazils main trading partners the
United States, China and Argentina. Its principal export destination in 2010 was China with
15.3% and its principal import source was the United States equating to 14.9% of imports (DFAT
2011a). However, Brazils trading relationships with the above mentioned partners have shifted
recently. China is investing heavily in the region with recent investments of approximately
US$30 billion in Brazil, as currently there is a growing competition between the United States
and China for a foothold in Latin America (Kurczy 2011). Moreover, China has taken the lead
replacing the United States as Brazils biggest trading partner, in fact, Brazils total exports to
China increased by 65.0% in the first four months of 2009 (Boyce 2010).

Although there are some monumental benefits present in the Brazilian economy, one of the
persistent problems that all interested investors need to be aware of pertains to Brazils high level
of public debt. Rising public debt over 60% in the first quarter of 2011, severely reduced
consumer confidence in the Brazilian market despite small improvements. As a result, Brazil is
slowly improving its macroeconomic stability by building up its foreign reserves and shifting its




13
debt burden towards real denominated and domestically held instruments (CIA World Factbook
2011).

Since 1991, Brazil has been a sovereign member of the Southern Common Market, Mercosur
3
.
Being the largest associated member in this regional group, Brazils main focus has been to
stimulate new trading opportunities and improve efficient cooperation between its members.
Brazils current position in South America is one of regional hegemony, which it constantly
enhances through diplomatic activities with the goal of achieving clear supremacy over its South
American neighbors (Varas 2008).

Brazils position as a key player expands globally as well. Besides having the position of being
Latin Americas largest economy and the eighth largest in the world (Oconnell 2010), Brazil is
also a BRIC
4
nation and a member of the G20. Being recognised as a G20 nation has given Brazil
the privy position of speaking on behalf of its fellow South American and developing nations,
allowing them to prove its leadership role in a global context (Kirton 2011). Due to the current
shift in power and the ongoing Global Financial Crisis, many multinationals are looking to the
BRIC nations as a source of foreign expansion and direct foreign investment (Investopedia 2011).
Brazils association with BRIC countries and its seemingly insulation against some of the
biggest problems facing the rest of the world, has further enhanced it position as a global key
player to watch (Kirton 2011).

In contrast, Chile is a much smaller country with only 17.2 million inhabitants (DFAT 2011b).
However, it is projected that real GDP will grow by a further 6.0% by 2012, making Chile the
fastest-growing economy in South America (Euromonitor International 2011). Similar to the rest
of the world, Chile is still recovering from the recent Global Financial Crisis and economic
slowdown that resulted from the 2010 earthquake. Economic growth and stabilization has been
supported by rising commodity prices, which have reached record heights, helping to alleviate
much of Chiles previous economic strain (Global Edge 2011). Chile is recognised as a world

3
Mercosur: The "Common Market of the South," is the largest trading bloc in South America. Mercosur's primary interest has been
eliminating obstacles to regional trade, like high tariffs, income inequalities, or conflicting technical requirements for bringing
products to market (Klonsky, Hanson 2009).
4
BRIC: is an acronym representing the emerging economies of Brazil, Russia, India and China used by Goldman Sachs and which
speculated that by 2050 these four economies would be wealthier than most of the actual economic powers (Investopedia 2011).




14
leader in the copper-mining industry. In fact, its annual output is a third of the worlds mined
copper, which in 2010 accounted for 66.5% of its total exports. This amount is expected to
increase by a further 6.4% by the end of 2011 (Euromonitor International 2011).

Chiles GDP (See Appendix Six) expanded 1.40% in the second quarter of 2011 over the previous
quarter in 2011 (Trading Economics 2011). Chiles economy is marked by high levels of foreign
trade supported by favorable exchange rates and efficient flows of imports and exports with low
or no tariffs. Such transparent trade conditions make Chile one of the most open economies in the
world (GlobalEDGE 2011). Chiles main trading partners are China, the United States, and
Argentina. Its principal export destination last year was China with 24.4% and its principal import
source was the United States recording 17.6% of total imports (DFAT 2011b). Currently Chile
maintains free trade agreements with diverse countries; these include Canada, the United States,
Mexico, South Korea, Australia, and the European Union (Euromonitor International 2011).

Due to its progress and efficiency, Chile has been catching international attention. As a matter of
fact, it is the first and only South American country to be part of the OECD, pledging to achieve
the highest sustainable economic growth among other aims of the organization (OECD n.d). In
addition, Chile promises to expand its presence as it is also a member of the Asia-Pacific
Cooperation Forum and is negotiating free-trade agreements with China and other Asian
countries (Euromonitor International 2011).

Regionally, Chile plays also a key role by being one of the members of the South American
trading bloc Mercosur and which gives the countrys industries and business partners access to
other markets in South America like Brazil, Argentina and Uruguay (GlobalEDGE, 2011).







15
7. Business Practices in Chile

Before looking to conduct business in Chile it is extremely important to understand the various
cultural elements that govern the ways that Chileans do business. The importance of personal
business relationships, the nature of social hierarchies, tendencies towards nepotism, and strict
policing against corruption, are just a few of the features that make doing business in Chile vastly
different to Australia.

Building lasting and trusting relationships is very important to many Chileans, who often find it
essential to establish strong bonds prior to closing any deals. Establishing productive business
cooperation requires a long-term commitment as formal business negotiations generally
commence once a level of comfort has been established (Katz 2008). Chileans usually only want
to do business with those that they know, like, and trust. Acceptable tendencies towards nepotism
correlate with such mindsets, as Chileans believe that it is much more reassuring to do business
with a family member rather than with a foreigner (Katz 2008).

Chileans tend to converse in close proximity, often-displaying emotion and outlandish hand
movements. For Westerners that perceive this as an invasion of space, backing away would send
the wrong message to a Chilean as they would associate this with a lack of comfort and disinterest
in the relationship (Katz 2008). While Chileans are generally warm and friendly people, they are
also very proud and may be easily offended by direct criticism and comments. Rather than being
open towards criticism, Chileans tend to avoid public confrontations out of respect for peoples
honour and personal pride. Causing embarrassment to other people through open criticism can
have a devastating impact on a negotiation, particularly when it involves a Chilean national (Katz
2008). Respect is earned by showing empathy towards others, treating everyone with dignity and
without aggressive behaviour (Katz 2008).

Most Chilean firms tend to be very hierarchical as people are expected to work within rigid well-
established lines of authority. Decision-making is usually reserved for top executives who never
consult with lesser subordinates, but will always consider the interests of the group or
organisations. Such a collective style of management illustrates the paternal role that managers
have towards their employees (Katz 2008).




16

Decision-making can also be a slow process that requires much patience and diligence. Attempts
to rush or put pressure on the process often results in failure as Chileans encompass a long-term
orientation towards business decisions. Rather than just relying on rules and laws, personal
feelings and experiences are also taken into consideration when decision-making. Conversely,
Chileans are often apprehensive towards change and reluctant to take risks. An emphasis on
contingency plans, support, and guarantees, must be shown to allow them to become comfortable
when making risky decisions (Katz 2008).

Unlike other prominent South American nations, Chile has worked tirelessly to eradicate
corruption from its economy. According to the 2010 Corruption index, Chile is ranked 21 with a
transparency rank (CPI)
5
of 7.2, which is the highest among the South American region.


5
Transparency International World Corruption Index (CPI). 0 = least transparent and most corrupt 10 = most transparent and
least corrupt. 178 countries were ranked on this index in 2010.




17
8. Business Practices in Brazil

Anybody wishing to do business with Brazil and Brazilians should be aware of the various
cultural and structural barriers that might confront them. The importance to building lasting and
trusting personal relationships is one of the critical aspects of the Brazilian business culture that
must be firstly considered. Business meetings can often take many forms, ranging from
boardroom meetings to low key meetings in up scaled restaurants and nightclubs. As exemplified
in appendix one, business relationships in Brazil exist between people, as Brazilians prefer to do
business with people not companies. Therefore, even if a company member has won the trust and
friendship of a local Brazilian firm they will not necessarily trust others from the same company
(World Business Culture 2011). It is essentially very important to keep company interfaces
unchanged, as each change (as exemplified in appendix one) signifies the beginning of a new
business relationship.

Most Brazilians also encompass a polychronic work style as they have a tendency to pursue
multiple actions and goals in parallel (World Business Culture 2011). When negotiating, they
often take a holistic approach and may jump back and forth between topics rather than addressing
them in sequential order. Negotiators that are from strongly monochronic cultures, such as
Australia, may find this style confusing to deal with. However, attempts to rush the process are
unlikely to produce better results and may be viewed as offensive. Correlating to their
polychronic work styles, Brazilians value face to face interaction more than any other
communication method. Indirect communication through telephones and emails are not received
well (as exemplified in appendix one) as Brazilians encompass a very close proximity towards
space and emotion. Such tendencies often make them seem aggressive and intimidating even
though they are very caring and relaxed in nature.

In Brazils business culture, the respect a person enjoys depends primarily on his or her status,
rank, and education (World Business Culture 2011). Showing status through things like dress is
extremely important as it displays the level of respect that one commands from others. Similarly,
it is expected that everyone shows respect to those of higher status and age, although, younger
generations are starting to question these beliefs exhibiting more emphasis on merit and personal
character. Even though hierarchy is enforced within Brazilian organisations, when empowered




18
employees are encouraged to be extremely creative and assertive. As in most Australian
organisations, Brazilians are accustomed with working in teams and taking on responsibility
when given the authority (World Business Culture 2011). Decision-making follows a similar
premise, as many lower level employees liaise with business partners in the absence of their
inaccessible senior managers. However, upper-management is eventually responsible with
making final decisions.

But arguably the most pervasive barrier encountered by foreign businesspeople refers to the very
real extra costs of doing business in Brazil. Malleable ethical standards and moral perceptions that
exist in Brazil allow for corrupt behaviour such as bribery or intercedes to occur, as they are
morally seen as effective tools to progress business negotiations (World Business Culture 2011).
To an Australian executive, such illicit behaviors would be perceived as being morally
unacceptable and frowned upon when confronted. However, when doing business in Brazil it is
necessary to disregard ones moralistic intentions and play by the same game that Brazilians do
(World Business Culture 2011). For Copper Range, such a stance must be considered as it is the
general consensus that most mining companies in Brazil have to pay some intercede towards
government projects to alleviate any negative externalities caused from mining (World Business
Culture 2011).





19
9. Recommendations

Taking into account the various cultural studies and national business tendencies, it appears that
Chilean culture offers a more suitable business environment towards Australian businesses.
Chileans tend to value punctuality and team fullness more than Brazilians, exerting an efficient
attitude that desires rules and framework when decision-making. Apart from being one of the
most efficient economies in South America, Chile has established itself as the fastest growing
economy in the region with minimal red tape habits and stringent law enforcement. Its relatively
transparent business environment offers many possible trade benefits to Copper Range, as its
economic landscape offers a platform into many diverse markets that Chile has established free
trade agreements with.

However, when deciding upon which market Copper Range will better integrate in, the strong
stance that Chile takes concerning anti-foreign bribery and corruption needs to be decisively
considered. In light of the recent foreign bribery cases that other mining companies such as BHP
Billiton and Rio Tinto have been involved in, it is our opinion that Copper Range take a
moralistic approach to its expansion process and choose Chile over the immorally inclined
Brazilian market. Taking such a strong stance against corruption and unethical procedures will
reinforce a strong culture within Copper Range and its new partnership, as an organization that
will not tolerate any inappropriate dealings.









20
10. References

Barker, D 2004, US cultural management vs. Chilean cultural management, John buyer, viewed
30 Aug 2011, < www.davidkbarker.com/papers/US_vs_Chilean_Management.pdf>

Bloomberg 2011, Chiles annual inflation rate surges to 10 year high, market snapshot, viewed 4
September 2011,
<http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOg901PgsioA>

Boyce, L 2010, Emerging Markets: Nuts about Brazil, 25 August 2010, This is Money.co.uk,
viewed 26 August 2011, <http://www.thisismoney.co.uk/money/investing/article-
1702520/Emerging-markets-Nuts-about-Brazil.html>

Changing minds 2011, Halls cultural factors, changing minds.org, viewed 5 September 2011,
<http://changingminds.org/explanations/culture/hall_culture.htm>

Connerley, ML 2004, Cultural Frameworks and their importance for leaders, Leadership in a
diverse and multicultural environment: Developing awareness knowledge and skills, Sage
Publications Inc, viewed 7 Sep 2011, <www.sagepub.com/upm-
data/4964_Connerley_I_Proof_2_Chapter_3.pdf>

Corruption index 2010, Transparency international: how corrupt is each country, DataBlog,
viewed 5 September 2011, <http://www.guardian.co.uk/news/datablog/2010/oct/26/corruption-
index-2010-transparency-international>

DFAT, 2011a, Brazil Country Fact Sheet, June 2011, Australian Government Department of
Foreign Affairs and Trade, viewed 30 August 2011, <http://www.dfat.gov.au/geo/fs/braz.pdf>

DFAT, 2011b, Chile Country Fact Sheet, June 2011, Australian Government Department of
Foreign Affairs and Trade, viewed 30 August 2011, <http://www.dfat.gov.au/geo/fs/chle.pdf>

Duncan, R 2009, Spain-Chile Relationship: A SWOT Analysis, 21 November 2009, Ezine articles,
viewed 4 September 2011, < http://ezinearticles.com/?Spain-Chile-Relationship---A-SWOT-
Analysis&id=3306416>

Encyclopedia of Nations, 2011, Chile: Politics, government, and taxation, Encyclopedia of the
Nations, viewed 4 September 2011,
<http://www.nationsencyclopedia.com/economies/Americas/Chile-POLITICS-GOVERNMENT-
AND-TAXATION.html>

Euromonitor International, 2011, Chile: Country Profile, 27 May 2011, Euromonitor
International Passport GMID, Swinburne University of Technology, Australia, viewed 24 August
2011,
<http://www.portal.euromonitor.com.ezproxy.lib.swin.edu.au/Portal/Pages/Search/SearchResults
List.aspx>





21
Franko, P 2010, SWOT Analysis: Brazil, 15 April 2010, Colby College, viewed 4 September
2011, <
http://www.ndu.edu/inss/docUploaded/Franko%20Brazil%20Roundtable%20Presentation.pdf>

GlobalEDGE, 2011, Take a Chance with Chile, 18 February 2011, GlobalEDGE International
Business Blog, Michigan State University, USA, viewed 26 August 2011,
<http://globaledge.msu.edu/blog/articles/?t=Take-a-Chance-with-Chile&ArticleID=986>
Gomez, S 2005, Essential issues for the Chilean Legal system, Hauser Global Law School
Program, viewed, 4 September 2011, <http://www.nyulawglobal.org/Globalex/Chile.htm>
Gupta, V,Hanges ,PJ. & Dorfman, P 2002, Cultural clusters: methodology and findings, Journal
of World Business, viewed 7 Sep 2011, <http://wase.urz.uni-
magdeburg.de/evans/Journal%20Library/International%20Management%20Models/Cultural%20
Clusters.pdf>

Investment International 2009, Investing in Brazil, 16 October 2009, The Publishing Group,
viewed 4 September 2011, <http://www.investmentinternational.com/magazine/alternative-
investments/investing-in-brazil-3057.html>

Investopedia, 2011, Brazil, Russia, India and China-BRIC, Investopedia ULC, viewed 24 August
2011, <http://www.investopedia.com/terms/b/bric.asp#axzz1WyzZvrQd>

Itim international 2009a, Geert Hofstede Cultural Dimensions, Brazil Country Focus, viewed 30
August 2011, <http://www.geert-hofstede.com/hofstede_brazil.shtml>

Itim international 2009b, Geert Hofstede Cultural Dimensions, Chile Country Focus, viewed 30
August 2011, <http://www.geert-hofstede.com/hofstede_chile.shtml>

Katz, L 2008, Negotiating international business: Chile, The negotiations reference guide, viewed
5 September 2011, <http://www.globalnegotiationresources.com/cou/Chile.pdf>

Kirton, J 2011, Brazils Contribution to G20 and Global Governance, 18 May 2011, G20
Research Group, University of Toronto, Canada, viewed 24 August 2011,
<http://www.g20.utoronto.ca/biblio/kirton-eneri-110518.html>

Klonsky, J & Hanson, S 2009, Mercosur: South Americas Fractious Trade Bloc, 20 August
2009, Council on Foreign Relations, viewed 5 September 2011,
<http://www.cfr.org/trade/mercosur-south-americas-fractious-trade-bloc/p12762>

Kurczy, S 2011, Chinas role in realizing Latin America decade, 12 April 2011, The Christian
Science Monitor, p. 1, viewed 25 August 2011,
<http://www.csmonitor.com/World/Americas/2011/0412/China-s-role-in-realizing-Latin-
America-decade/%28page%29/3>





22
Lenartowicz, T & Johnson, JP. 2002, Comparing managerial values in twelve Latin American
countries: an exploratory study, Management International Review, viewed 7 Sep 2011,
<http://findarticle.com/p/articles/mi_hb3265/is_3_42/ai_n28955593/pg_2/>

Lim, R 2010, Brazils currency wars: A Real problem, 11 October 2010, Sounds and Colours,
viewed 4 September 2011, <http://www.soundsandcolours.com/articles/brazil/brazils-currency-
wars-a-real-problem/>

Nardon, L & Steers, RM. 2009, The culture theory jungle: divergence and convergence in models
of national culture, Cambridge University press, viewed 7 Sep 2011,
<http://assets.cambridge.org/97805218/77428/excerpt/9780521877428_excerpt.pdf >

Oconnell, D 2010, The BRIC Project-Brazil-A nation In Flux, An Economy On The Move, And
The Slowly Rising Tide Of Corporate Governance (Part 4), 14 April 2010, The Race to the
Bottom.Org, viewed 26 August 2011, <http://www.theracetothebottom.org/international-
governance/the-bric-project-brazil-a-nation-in-flux-an-economy-on-the-m.html>

OECD, n.d, Chile and the OECD, Organization for Economic Co-operation and Development
(OECD), viewed 26 August 2011,
<http://www.oecd.org/document/4/0,3746,en_33873108_39418658_39549636_1_1_1_1,00.html
>

Oppenheimer, A 2001, Too much red tape leaves Brazils economy lagging, HACER, viewed 4
September 2011, <http://www.hacer.org/current/Brazil053.php>
Spencer Global 2010, U.S and Chile Sign Income Tax Treaty, Legal, Relocation, and Investment
in Chile, viewed 4 September 2011, <http://www.spencerglobal.com/chile-tax-law/35-chile-
taxes/103-us-chile-double-tax-treaty.html>
The CIA World Factbook 2011a, Country Profile: Brazil, United States of America Department
of State, viewed 29 August 2011, < https://www.cia.gov/library/publications/the-world-
factbook/geos/br.html>

The CIA World Factbook 2011b, Country Profile: Chile, United States of America Department of
State, viewed 29 August 2011, < https://www.cia.gov/library/publications/the-world-
factbook/geos/ci.html>

The Economist, 2009, Brazil Takes Off, 12 November 2009, Economist Print Edition, viewed 24
August 2011, <http://www.economist.com/node/14845197>

The Treasury 2010, Australia and Chile sign new tax treaty, 12 March 2010, Australian
Government, viewed 4 September 2011,
<http://www.treasury.gov.au/contentitem.asp?NavId=055&ContentID=1752>

The World Bank 2011a, Ease of doing business in Brazil: Measuring business regulations,
International Finance Corporation, viewed 28 August 2011,
<http://www.doingbusiness.org/data/exploreeconomies/brazil/>




23

The World Bank 2011b, Ease of doing business in Chile: Measuring business regulations,
International Finance Corporation, viewed 28 August 2011,
<http://www.doingbusiness.org/data/exploreeconomies/chile/>

Thomas White Global Investing 2011, Brazil: Beyond Natural Riches, Capturing value
worldwide, viewed 4 September 2011, <http://www.thomaswhite.com/explore-the-
world/brazil.aspx>

Trading Economics, 2011a, Brazil Balance of Trade, August 2011, Trading Economics, RTT
News, viewed 30 August 2011, <http://www.tradingeconomics.com/brazil/balance-of-trade>

Trading Economics, 2011b, Brazil GDP Growth Rate, March 2011, Trading Economics, RTT
News, viewed 26 August 2011, <http://www.tradingeconomics.com/brazil/gdp-growth>

Trading Economics, 2011c, Chile Balance of Trade, June 2011, Trading Economics, RTT News,
viewed 30 August 2011, <http://www.tradingeconomics.com/chile/balance-of-trade>

Trading Economics, 2011d, Chile GDP Growth Rate, June 2011, Trading Economics, RTT
News, viewed 26 August 2011, <http://www.tradingeconomics.com/chile/gdp-growth>

Trading Economics, 2011e, Strength of legal rights index, Trading Economics, RTT News,
viewed 4 September 2011, <http://www.tradingeconomics.com/brazil/strength-of-legal-rights-
index-0-weak-to-10-strong-wb-data.html>

Travellerspoint 2011, Most dangerous cities in the world, General Talk, viewed 4 September
2011, <http://www.travellerspoint.com/forum.cfm?thread=11730&start=21>

Varas, A 2008, Brazil in South America: from indifference to hegemony, May 2008, Fundacin
para las Relaciones Internacionales y el Dilogo Exterior (FRIDE), Madrid, viewed 24 August
2011, <www.fride.org/download/COM_Brazil_Sudamerican_ENG.pdf>

World business culture 2011, Background to business in Brazil, Doing business in Brazil, viewed
5 September 2011, <http://www.worldbusinessculture.com/Brazilian-Business-Style.html>










24
11. Appendices

Appendix One: Minutes from Brazilian negotiation

Copper Range Mining Group

Meeting Agenda: Formalization of Joint Venture agreement between Copper Range and
Millinea Mining
Date: 3 September 2011
Destination: Rio De Janeiro, Brazil
Start time: 2pm
Estimated end time: 3Pm
Attendees: Robert Jones (Copper Range)
Federico Thiago Robinho (Millinea Mining)

Items Discussed:

Greeting:
Sr. Federico Thiago Robinho greeted Mr. Robert Jones warmly and said Ahh Senhor Johnson
welcome.
He then provided an excuse for being one hour late for the appointment, Traffic was crazy
Mr. Jones then introduced himself, before Sr. Robinho corrected him and invited him to call him
by his first name Federico as they already had an established relationship
Mr. Jones then explained that the previous person Sr. Robinho liaised with was actually not him,
but Mr. David Johnson
S.r Robinho was shocked and distraught about the change in personal that Copper Range sent for
such an important meeting
The waitress then ushered them to their table

Negotiation/Preliminary discussion

Immediately, Mr. Jones offered Sr. Robinho with a warm welcome: Firstly I would like to thank
you on behalf of Copper Range, for the commitment and level of support that you have shown
towards our business aspirations. I think that after todays efforts we will be able to create a
fruitful business relationship that will
Sr. Robinho then cut off Mr. Jones and instructed him to wait one moment un momento Senhor
Sr. Robinho seemed disinterred in Mr. Jones and rather decided to order a large tray filled with
wine, scotch and cigars
He offered Mr. Jones a sample of everything, but he gratefully denied
Sr. Federico Thiago Robinho then looked mysteriously at Mr. Jones and said: you are not the
one that I have been dealing with, where is Mr. David Johnson?
Mr. Jones once again explained the reason for his visit and as to why Mr. Johnson could not make
this trip
Sr. Robinho seemed very interested in knowing the fate of Mr. Johnson as he repeatedly asked
questions relating to his where about and status in the company going forward




25
Mr. Jones then became blunt and confessed that he was retrenched from the company and will no
longer be involved in any decisions or negotiations with the two companies
To the surprise of Sr. Robinho, he looked sternly at Mr. Jones and said: I liked Mr. Johnson, I
felt very comfortable with him and with the direction that our companies were going. But now I
am sitting here with you, and Snr I dont know who you are
Mr. Jones attempted to explain to Sr. Robinho that is office sent numerous emails and messages
regarding the Millinea office explaining the situation with Mr. Johnson. He also tried to reassure
Sr. Robinho that going forward there would be no other issues for his concern
Sr. Robinho then became annoyed and said to Mr. Jones: let me tell you something Snr, In Brazil
we do business with people only that we trust. So now that Mr. Johnson is gone as far as I am
concerned we are starting fresh. And another thing, I dont care for faxes or fancy emails, in
Brazil this is how we do business Cara a Cara (Face to Face)
Mr. Jones made the error of not understanding the situation and status of the relationship as he
referred to Sr. Robinho once again as Federico
Sr. Robinho then became very angry with Mr. Jones and told him to call him only by his surname
Senhor Robinho as they were not mutual friends and were still in the process of being
acquainted with one another
Mr. Jones then resentfully accepted the situation but once again tried to push the purpose of the
meetings agenda. He said: Sr. Robinho, that this shouldnt change anything and that the main
thing is that we are here today to meet and greet and get on with finalizing the original joint
venture agreement that was agreed on months ago
However, Sr. Robinho made it known that here in Brazil we do not like any uncertainties. What
are the guarantees that doing business together will benefit my family as well as the families of
all my employees?
Mr. Jones then started explaining the financial gains that could be met and further explained to Sr.
Robinho: as individual companies we are both achieving good things, but as a unified company
we can achieve even greater things and kill off any competition from all around the world
This seemed to spark interest in Sr. Robinho as he explained to Mr. Jones: look stay in town for
a couple of weeks, come with me to our headquarters and meet some of our employees, they will
be very interested in meeting you. You will then see how we do things here in Brazil so that your
Australian managers can handle my employees as a Brazilian would. Then if we are all satisfied
that we can work together over time, then we can sign the agreement and move forward

Mr. Jones then became very concerned with the intensions of the Millinea group and Copper
Range as he rationalized with Sr. Robinho: I understand you would like me to have a look and
see how everything runs down here, but we are not planning on absorbing the Brazilian
corporate culture here. We have had success back home in Australia and the United States and
therefore plan on bringing over all over work processes to manage the company the same way as
ours in Australia
Sr. Robinho became very defensive once again and asserted himself on Mr. Jones by staring him
with a cigar in his mouth momentarily
He then declared angrily: thats out of the question. We will run the business the way that it
always has been run...after all we are in Brazil and our workers will not respond to your ways the
same as in Australia
Mr. Jones recognised the anger shown by Sr. Robinho, so he attempted to salvage the deal by
saying rather cunningly: look Im sure we can come to an agreement later when it comes to
deciding these things, but right now lets get the agreement signed so I can go back to my office




26
and push forward all the arrangements and let my shareholders and related firms know the
direction we are taking
Sr. Robinho then shook his head and said to Mr. Jones: I apologize if I havent made myself
clear Mr. Jones, but we will not be signing anything today and definitely not under your
conditions
Mr. Jones then became completely dejected and said: well I guess we are just wasting our time
here today
Sr. Robinho agreed with Mr. Joness sentiments and again offered Mr. Jones a drink and a cigar

Meeting Conclusion/Notes

Rather than accept, begrudgingly, to have a drink with Sr. Robinho and attempt to build a solid
personal relationship for future business prospects, Mr. Jones instead chooses to leave the
meeting abruptly. Any immediate business relationships between the two companies but ended
when Mr. Jones departed the meeting. Copper Range is now aware that a new approach to cross-
boarder business is required to ensure that no such transgressions occur in the future.



Appendix Two: Brazil PESTEL Analysis

Political
The Federative Republic of Brazil is a federal republic made up of 26 state divisions with
its Capital Brasilia (CIA World Factbook 2011a)
Brazil maintains a stable democratic political system, although is hindered by a
dysfunctional and corrupt Judicial system (CIA World Factbook 2011a)
According to Travellerspoint, Brazil ranks as one of the most dangerous cities in the
world (Travellerspoint 2011)
Second largest single-country market for cocaine in the world which highlights the lack
of political influence in the trafficking of illicit drugs (CIA World Factbook 2011a)
Drugs trafficking and criminal gangs often are the core concerns around political debates
and electoral campaigns (CIA World Factbook 2011a)
Brazil has long-standing disagreements with Argentina, Guyana, Suriname and
Venezuela (CIA World Factbook 2011a)
Brazil has established preferential trade arrangements with the United States engaging in
the trade of electrical and transport equipment, footwear and coffee (CIA World
Factbook 2011a)
Signed Mercosul in 1991, an agreement among Argentina, Brazil, Paraguay, and
Uruguay (Klonsky, J & Hanson)
Integral member of UNASUL, ALADI, CASN, IBSA, and is among the fasting growing
trade blocks in the world BRICs (CIA World Factbook 2011a)
Brazils government offers economic growth programs that allow investors to access the
support of government for financial and advising aspects (CIA World Factbook 2011a)
Current public debt (end of 2010) is 59% of GDP (CIA World Factbook 2011a)





27
Economic
Brazilian economy is highly dependent on exports of Iron Ore, Copper and coffee, as
well as being a very attractive destination for inbound Foreign Direct Investment (CIA
World Factbook 2011a)
Has a rigid labor force, 66% in Services and 20% in agriculture (CIA World Factbook
2011)a
In 2010 Brazil had a Trade surplus on its current account of USD$20 billion (CIA World
Factbook 2011a)
Main export include, Iron ore, soybeans, ethanol, coffee and copper (CIA World
Factbook 2011a)
Major exports markets include, China 12%, United States 11%, Argentina 8.4% (CIA
World Factbook 2011a)
Main imports include, machinery, electrical and transport equipment, chemical products
and oil (CIA World Factbook 2011a)
Major import suppliers include, United States 16%, China 13%, Argentina 9% (CIA
World Factbook 2011a)
Composition of GDP: Services (66%), Industry (28.5%), Agriculture (5.5%) (CIA World
Factbook 2011a)
Ongoing problems with a high interest rate: 12.5% (CIA World Factbook 2011a)
Inflation rate has remained stable at 6.87% in 2011 with very minimal increases in prices
from 2009 rate (CIA World Factbook 2011a)

Socio-cultural
Big regional disparity between those living in major cities and those in smaller towns
Widespread urban poverty, with 87% of total inhabitants coming from these regions (CIA
World Factbook 2011a)
26% of population live under the poverty line (CIA World Factbook 2011a)
Infant mortality rate is 21.17 deaths/1,000 live births (CIA World Factbook 2011a)
Ethic groups are comprised as: white 53.7%, mulatto (mixed white and black) 38.5%,
black 6.2%, other (includes Japanese, Arab, Amerindian) 0.9%, unspecified 0.7% (CIA
World Factbook 2011a)
Major religions according to 2000 census include; Roman Catholic 74%, Protestant 15%,
Spiritualist 1.3%, Bantu/voodoo 0.3%, none 7.4% (CIA World Factbook 2011a)
Languages: Portuguese, Spanish, German, Italian, English and a large number of minor
Amerindian (CIA World Factbook 2011a)
Literacy rate of those 15 years and over that can read and write: 88.6% of population
(CIA World Factbook 2011a)
Working age: (15 64 years): 67% of population (CIA World Factbook 2011a)
Brazil facing problem of having an aging workforce as Australia does

Technological
Low patent filings and R&D spending (only 1% of GDP) (CIA World Factbook 2011a)
Low telecommunication penetration in far-flung areas
Infrastructure varies but is developing quickly up to the standards of developed countries




28
Brazil has the second largest amounts of airports in the world (4,072) only behind the
United States (15,079) (CIA World Factbook 2011a)
Many of its shipping vessels in the Atlantic ocean are under constant threat from attacks
and hijackings (CIA World Factbook 2011a)
Has a working telephone system that has extensive microwave radio relay systems and a
domestic satellite system with 64 earth stations (CIA World Factbook 2011a)
Very developed tourism projects that attract many foreign visitors 2014 Fifa world Cup
Finals and 2016 Rio Olympic Games

Environmental
Very rich biodiversity the Amazon covers almost half of Brazils terrain
Climate: tropical or semitropical (CIA World Factbook 2011a)
Deforestation in Amazon Basin is destroying the habitat and endangers a multitude of
plant and animal species
Problems of ongoing illegal wildlife trade (CIA World Factbook 2011a)
Air and water pollution in Rio de Janeiro, Sao Paulo, and several other large cities (CIA
World Factbook 2011a)
Land degradation and water pollution caused by improper mining activities (CIA World
Factbook 2011a)
Wetland degradation; severe oil spills (CIA World Factbook 2011a)
Has now become the largest producer of ethanol in the world (CIA World Factbook
2011a)

Legal
Complicated tax system
Brazil has a very lengthy business registration process, which usually takes 152 days and
requires about 15 formal procedures with the Brazilian government (Oppenheimer, A
2001)
Strength of legal rights in obtaining credit (Scale 0=weak 10=strong) Brazil is ranked 3
according to (Trading Economics 2011e)
Time to export takes about 13 days once all legal requirements are fulfilled
(Oppenheimer, A 2001)
Has many red tape habits which are holding back the strength of the economy
(Oppenheimer, A 2001)







29
Appendix Three: Chile PESTEL Analysis

Political
Republic of Chile, located in South America at the border of the South pacific ocean with
its capital city Santiago (CIA World Factbook 2011b)
Chile has gained its democracy system in 1990, after a long history of dictatorship.
Sebastin Piera, Current president has reformed the law and maintained open economic
and moderate social welfare after the 20 years of governance (Encyclopedia of Nations
2011)
Until now Chile has considered as the most stable country in Politic, relatively free of
corruption, and has a low crime rate (CIA World Factbook 2011b)
Despite a few disputes over the years, Chile has strong political ties with its neighboring
countries Argentina, Bolivia and Peru (CIA World Factbook 2011b)
Chile maintains both bilateral and multi lateral agreement such as agreement under
Mercosul and UNASUL (CIA World Factbook 2011b)
It is the second Latin American country to become a member of the OECD (CIA World
Factbook 2011b)
Current Public debt (end of 2010) is relatively low at 9.2% of GDP (CIA World Factbook
2011b) which is 3.0% higher than 2009 level

Economic
Chile is the Fastest-growing economy in Latin America. Despite an economic contraction
of 1.7% in 2009, the economy grew by 5.2% in 2010 (CIA World Factbook 2011b)
Main exports include copper (40% of total exports) (CIA World Factbook 2011b)
Major export destinations include China 23.2%, United States 11.3%, Japan 9.2%, South
Korea 5.8%, Brazil 5.1% (CIA World Factbook 2011b)
Main Imports include petroleum, heavy industrial machinery, and vehicles (CIA World
Factbook 2011b)
Major import supplier include United States 16.8%, China 11.8%, Argentina 10.9%,
Brazil 6.7%, South Korea 5.1% (CIA World Factbook 2011b)
Unemployment has been stable at 7.1% (2010 est.), with a favorable country comparison
to the world (rank 72) (CIA World Factbook 2011b)

Socio-cultural
Big regional disparity between those living in major cities and those in smaller towns
Widespread urban poverty, with 87% of total inhabitants coming from these regions (CIA
World Factbook 2011b)
11.5% of total population live under the poverty line (CIA World Factbook 2011b)
Infant mortality rate is 14.33 births/1,000 population (CIA World Factbook 2011b)
Ethnic groups are comprised as: white and white-Amerindian 95.4%, Mapuche 4%, other
indigenous groups 0.6% (according to 2002 census) (CIA World Factbook 2011b)
Major religions according to 2000 census include; Roman Catholic 70%, Evangelical
15.1%, Jehovah's Witnesses 1.1%, other Christian 1%, other 4.6%, none 8.3% (CIA
World Factbook 2011b)
Languages: Spanish, Mapudungun, German, English (CIA World Factbook 2011)




30
Chile has a very high Literacy rate, with almost 98% of people 15 years and over that can
read and write (CIA World Factbook 2011b)
Working age remains quite high: (15 64 years): 67% of population (CIA World
Factbook 2011b)
Chile facing problem of having an aging workforce as Australia does

Technological
Low patent filings and R&D spending (only 1% of GDP) (CIA World Factbook 2011b)
Chile has well-developed telecommunication infrastructure. Its broadcast media and
telephone system was privatized in 1988 which allowed for rapid progression (CIA
World Factbook 2011b)

Environmental
Chile has a very rich biodiversity
Chile is under constant threat of Natural hazards such as severe earthquakes; volcano
eruption and tsunamis (CIA World Factbook 2011b)
Its natural biodiversity is threatened from improper mining and deforestation, and air and
water pollution through chemical waste from industry (CIA World Factbook 2011b)
Has signed numerous environmental treaties including: The Antarctic-Environmental
Protocol, and The Kyoto Protocol (Ratified in 2002). They have also become party
Marine Dumping Standards, Ozone Layer Protection, and Whaling (CIA World Factbook
2011b)

Legal
Chile has a common law system in which based on the Constitution of 1980 (October
24th, 1980 with several amendments) (Gomez 2005)
Chile reformed its Criminal Procedure Process in 2000 promoting Human rights,
transparency in its judicial system, and shaped imperative changes towards opening its
economic market (Gomez 2005)
Chile practices anti foreign bribery laws in conjunction with OECD and UN drug and
crime (CIA World Factbook 2011b)
Chile has maintained strong relationship ties with the United States to promote Human
rights and in 2004 after implementing the US- Chile free trade agreement, Chiles net
amount of trade increased tree times (Gomez 2005)
In February 2010, the US Chile formal double tax treaty has been signed to promote
private sector investment in foreign countries (Spencer Global 2010)
In March 2010, the Australia- Chile tax treaty has been signed in order to promote a
harmonized fiscal policy in both countries (The Treasury 2010)







31
Appendix Four: The Economist Magazine Worldwide Cover 2009 Edition


Source: (The Economist 2009)







32
Appendix Five: Brazils GDP Growth Rate Chart

Source: (Trading Economics 2011b)



Appendix Six: Chiles GDP Growth Rate Chart


Source: (Trading Economics 2011d)







33
Appendix Seven: SWOT ANALYSIS

BRAZIL
Strengths S
Brazil is a ethnic melting pot which is
endowed in natural wealth (Thomas White
Global Investing 2011)
The largest economy in South America and
emerging in world economies as a BRIC
nation (CIA World Factbook 2011)
Is a member of the G20 and often speaks on
behalf of other South American and
developing countries (Kirton 2011)
Has very sound financial policies
Agriculture well established and diversified
Is the largest exporter of sugar, coffee,
tobacco, beef and iron ore (Thomas White
Global Investing 2011)
Largest ethanol producer in the world (CIA
World Factbook 2011)
Ability to outbid Chicago and Madrid for
2016 Olympic games

Weaknesses W
Divided social classes and urban poverty -
26% below poverty line (CIA World
Factbook 2011)
Heavy political instability, corruption and
mismanagement (Thomas White Global
Investing 2011)
High income inequality disparity (CIA World
Factbook 2011)
Lack of reputable education providers and
enrolments in higher Education (Thomas
White Global Investing 2011)
Business sector is relatively informal
Inefficient tax system and red tape habits
Poorly developed infrastructure lacks
innovation
Wide spread crime and corruption
Government often involved in illegal
payments from industry
Opportunities O
Workforce becoming highly skilled in
manufacturing and technology
Booming minerals sector recent oil
discovery at Tupi Reserve (Thomas White
Global Investing 2011)
Hydroelectricity and energy sector
emerging Brazil becoming increasingly
self sufficient in conventional energy
(Thomas White Global Investing 2011)
Expanding agriculture sector offers many
business opportunities in industries reliant
on cotton, rice and sugarcane (Thomas
White Global Investing 2011)
Hosting privileges for Fifa 2014 World Cup
Threats T
Highly reliant on only a few exports such as
Iron Ore and sugar (CIA World Factbook
2011)
The Real currencys high value is making it
uncompetitive as many other countries are
devaluing theirs to attract foreign investment
(Lim 2010) Global currencies at war
Rising interest rates which have increased to
tackle the ongoing debt problem (CIA World
Factbook 2011)




34
and 2016 Olympic games Tourism and
domestic businesses will thrive (Thomas
White Global Investing 2011)

CHILE
Strengths S
Chile has a highly efficient economic
structure that has consistently grown
fastest growing South American economy
(Thomas White Global Investing 2011)
Has diverse Free Trade Agreements with
many countries including the United States
and Australia (CIA World Factbook 2011)
Has one of the most open and transparent
economies in the world
Successive budget surpluses has reduced its
national debt to zero (Thomas White Global
Investing 2011)
Has rich agriculture and mineral reserves
Was the first South American nation to
become a member of the OECD (OECD
n.d)
The worlds largest producer of copper and
has the globes largest open-pit copper
mine (Thomas White Global Investing
2011)




Weaknesses W
Has acute energy shortages (Thomas White
Global Investing 2011)
Lack of quality education between low and
high income students (Thomas White Global
Investing 2011)
Divided social classes and urban poverty
11.5% below poverty line (CIA World
Factbook 2011)
High income inequality disparity (CIA World
Factbook 2011)
A lack of government spending in R&D and
innovation (CIA World Factbook 2011)
Dependency on other nations for production
of key necessities such as food and energy
causes high price increases and inflation
(Bloombery 2011)




35
Opportunities O
More young people are enrolling in Higher
Ed (up from 30% to 40% in 2010) higher
skilled inhabitants (Thomas White Global
Investing 2011)
Has gained a strong competitive advantage
in grape growing and wine production
(Thomas White Global Investing 2011)
Due to its varied geography, Chile has
unexploited opportunities in the renewable
energy industry i.e. Solar, wind and
Ocean (Encyclopedia of Nations 2011)
Government sectors becoming more
privatized offers more foreign investment
opportunities and will help the economy
mature (Thomas White Global Investing
2011)
Threats T
Economy is highly reliant on its Copper
exports (CIA World Factbook 2011)
Relies on average 2/3 of its food and energy
sources to come via imports (Bloombery
2011)
Is constantly under threat by persistent natural
disasters such as earthquakes and volcano
eruptions

Appendix Eight: Halls Cultural Dimensions


Source: (Changing minds 2011)


Appendix Nine: Alternative Culture Studies

According to Lanartowicz and Johnson (2002), both Trompenaar (See Appendix Ten) and
Schwartz (See Appendix Eleven) excluded Chile from their studies and conducted analysis on
Brazil that cannot be rationally compared.





36
In regards to other cultural studies, Sirota and Greenwood looked at dividing countries into eight
different regional groups as they felt that a countries geographic position often impacted the
culture of their inhabitants. Ronen and Shenkars study (See Appendix Twelve) also used a similar
framework, as they attempted to examine culture based on the similarities between world regions
and the way employees view their work and needs (Lanartowicz and Johnson 2002).

Amidst these eight-world regions and four independent countries, Chile is classified as a Southern
Latin American country, whilst Brazil is viewed as an independent group. The group of eight
clusters includes: Near Eastern, Arab, Far eastern, Latin America, Anglo, Latin European,
Germanic and Nordic. Whilst the four independent groups consist of Japan, Brazil, Israel and
India, as they are seen to be distinctly different to other country regions around the world
(Connerley 2004, p. 44).

In the Anglo group, the commonality is found in language, business practices and law (largely a
result of British influences). The Arab group shares common language, religion and customs. The
traditions and customs in the Far eastern group are also characterized in many similar ways (8
countries) while Language and history are seen to be common in the Germanic group (3
countries).

Latin America (6 countries including Chile) share language and historic links, largely attributed
to their colonial ties to Spain. Whilst the Latin European group (5 countries) have many
similarities pertaining to their cultural values. Near Eastern (3countries) has the common history
while Nordic (4 countries) is common in cultural dimension and historic links.

Appendix Ten: Trompenaars Cultural Dimensions my report need to use this
theory to analyses and explain why Brazil and Chile is different





37

Source: (Nardon et al 2009)

Appendix eleven: Schwartzs Cultural Dimensions- my report need to use this
theory to analyses and explain why Brazil and Chile is different








38
Source: (Nardon et al 2009)


Your educational progress matters a lot to you, your family and to us also!
That is precisely why we are available 24/7 to help you with writing
assignments, homework, research, essays and projects. No matter what the
subject, Math or Science, Finance or Accounting, Programming or History,
you can depend on us and get customized papers written according to your
instructions. All you need to do is visit us at www.sampleassignment.com.