Archive for February, 2009

Brazilian music, samba

February 18, 2009

Here’s a pdf file with the lyrics to some of the songs that we’ll go over in class today.

brazilmusic.pdf

Kjersti Burnham will be in class from 4:30 – 5:30 to teach us how to samba.

You may also want to check out the links that Paulo Martin wrote under “Welcome to Global Connections South America 2009”

 

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O brasileiro

February 10, 2009

Vamos ver alguns desses:

Joga bonito: http://www.youtube.com/watch?v=6cVn4-VtHtE&feature=related

Futevolei: http://www.youtube.com/watch?v=H5jFf7fhkmM

Argentina, MasterCard: http://video.aol.com/video-detail/publicidad-argentina-quilme-tevez/732891771

Lula da Silva: http://www.youtube.com/watch?v=2NB91D-Da50

Pixote: http://www.youtube.com/watch?v=GPu_cQ11Tb0

Ford Motor, American Idol: http://www.youtube.com/watch?v=mUTcE08wuSI&feature=related

Ford Motor, Versão brasileira: http://www.youtube.com/watch?v=BuUxIxi_fCE

WorldShip: Kelm & Risner 2007

February 9, 2009

In preparation for class, read the following cultural case, taken from Kelm & Risner 2007. “Brazilians Working with Americans.”

Chapter 2

World Ship

Company: World Ship

Focus: Overnight delivery of packages

Case Objective: Update the policy on sales executives’ activities

Cultural Conflict: Dealing with differences between Brazilian personal style and new corporate policy

 

Introduction and Synopsis

In this case we see an American perception on how some new changes at World Ship will help it to be more productive. The new policy divides clients into three categories based on the revenues produced. Each group receives different levels of attention. It is interesting to talk to North Americans who have never worked with Brazilians and to see their opinions about this case. Most do not relate to the problem at all. “What is the problem? The clients can still get all the help they need and the sales executives won’t waste their time in all of those unproductive visits.” The problem is that there is a big difference in the definition of “waste of time.” As the North American executive Terry Kahler observes “American companies are focused primarily on logic, primarily focused on productivity, and really trying to maximize their investment in their business. Brazilian companies, on the other hand, are focused a lot more on relationships and how to deal with their customers and suppliers on a one-on-one basis.” This case also shows how Brazilians have responded to the new policies and how they try to get around some of the parts that they feel less comfortable with.

 

Case: World Ship

In the movies Tom Hanks spent four years on an island in the Pacific Ocean and still delivered his guaranteed package. In this case a policy change at World Ship is not quite as dramatic, but a change in company policy has left some Brazilians wondering if life on an isolated beach wouldn’t be so bad. World Ship has operations all over the globe and a local office in Salvador, Bahia. Clóvis Oliveira has been the branch manager of the Salvador office for the past three years and one of his top sales executives is Nelson Barbosa.

Last year World Ship introduced a new focus called Primary Customer Prioritization (PCP). World Ship prioritizes customers into three categories. For the infrequent and the low revenue customers there are drop-off sites, pamphlets, online descriptions and a host of other services that are available to all customers. These customers do not require any special, specific, or additional contact with sales executives. Those mid-volume customers who generate revenues of between $500 and $5,000 dollars per month require additional assistance and this is provided over the telephone through World Ship customer service representatives (CSR). High-volume customers who generate revenues above $5,000 dollars are classified as PCP1 customers and they receive direct visits from the sales executives of the local World Ship station.

Under the new guidelines, when a potential customer calls a sales executive, the sales executive provides the customer with a phone number where a profile is created. Based on the answers to the profile questions, the new customer is categorized PCP1, PCP2, or PCP3. The new profile system is designed to be advantageous for both the customers and the sales executives. PCP3 customers become aware of the services provided. PCP2 customers, by using the CSRs over the telephone, receive assistance in tracking packages and advice in payment options. These levels of assistance also mean that the sales executives now have more time to attend to the personal needs of the PCP1 clients. The sales executives can be more flexible, have more time at their disposal, develop future projects, and be more focused on the changing needs of the PCP1 customers. For example, before the new policy Nelson Barbosa worked with 200 clients, clients that he visited on a regular basis. Only 60 of those clients are now classified PCP1, but those 60 clients represent more than 80% of his total revenue in sales. The other 140 are now classified PCP2 and receive their services from CSRs over the phone.

So what is the downside? As Clóvis Oliveira explains, “Technically, the new policy is 100% correct. Culturally, it is 100% complicated.” To begin with it was culturally bizarre to tell the 140 clients that Nelson had been visiting, some for over three years, that he could no longer attend to them personally and that instead they would have to call a number to talk to a representative on the phone. Brazilians want to be treated special. The pleasure of doing business is found in the pleasure of dealing with people. “You mean you won’t be able to take care of me any more Nelson? What do you mean you can’t come and see me? We can’t even go out for coffee Nelson? Oh Nelson, what’s going on at World Ship?” A similar problem arises when new potential customers give the sales executives a call. Culturally it makes no sense for someone, who is already talking to Nelson, to be told, “You need to call the central office, build a profile and then they’ll tell you who to talk to.” Every Brazilian on the planet will respond by saying, “But Nelson, what’s going on? I’m already talking to you and now I need to talk to someone else to find out if I can talk to you?” That, however, is the way it is now at World Ship. Without knowing the buying potential, the sales executives cannot make personal visits. To be clear, World Ship is not refusing any customer. They simply have different levels of assistance.

In addition to the restriction of visits to PCP1 customers, the home office also has a new set of guidelines for how often PCP1 customers can be visited. Each kilometer traveled and every visit made needs to be reported. If a sales executive is allowed 10 visits with a certain client and he visits 20 times, he will have to answer to the station manager and the home office. The number of visits is determined by a matrix based on the revenues generated and any increase or decrease in sales. The home office has really been cracking down on how sales executives spend their time. Sales executives need to know the costs of their time as related to visits that do not correlate to sales. A good portion of Clóvis’ time is now dedicated to helping the sales executives understand the actual costs involved with how they spend their time. World Ship may be a global company, but in Brazil this is seen as a very “American” way of doing business.

Lately the Brazilians have been discovering alternate ways of getting around the new policy. It is not their intent to do anything illegal or underhanded, but they want to soften the harshness of the new policy for those old customers who no longer receive personal visits. For example, the station in Salvador has a secretary named Sandra. Of course Sandra’s job is not to be a sales executive. However, the station does receive a number of over-the-counter drop-off packages. Normally these in-station deliveries do not account for more than $2,000 in revenues per month. Since the new policy, however, over-the-counter revenues are up to nearly $30,000. Old clients simply go straight to Sandra. Sandra also seems to be enjoying an increased amount of flowers and chocolates from grateful customers who thank her for tracking their packages.

 

American Executive Comments

Terry Kahler

World Ship is a very classic example of a culture clash between Brazilian companies and businesses and American companies and businesses. As I read through the synopsis I discovered that this example fits very much, and is very much in line, with a lot of American companies trying to do business in Brazil. American companies are focused primarily on logic, primarily focused on productivity, and really trying to maximize their investment in their business. Brazilian companies, on the other hand, are focused a lot more on relationships and how to deal with their customers and suppliers on a one-on-one basis. This culture clash sometimes creates problems in business models and sometimes Brazilian people and Brazilian companies will try to find ways to go around the business models, and try to find ways to create a hybrid model that doesn’t necessarily meet the original design of the company. My recommendations for people finding themselves in this situation is to really trust the business model, to really understand when the business model will impact negatively on the financial results. If they do find themselves where the business model doesn’t work in a particular case, then in some cases you may not want to do business in that particular area and you may want to focus specifically on areas which might bring profit, it might bring better results. And when that area is saturated, we’ll call that say, the available market, when that area is saturated then you can refocus your efforts in finding ways of doing business in areas that are not part of that original plan and not part of that available market. When you have success in those areas, it will spread quickly and customers and employees alike will tend to gravitate towards the model. When you have failure it will be big and you will definitely want to change your model at that time.

 

Paul Cluff

World Ship was an interesting case and I had personal experience in this because I worked in a financial bank which also had salesmen there which were selling tractors. And we would do the financing side of that. And to see these sales people go out, they made various visits on site to talk to these clients and make sure that they were satisfied so that they could get more business from them and it did take a lot of time. They would go out there for a full day. They would go out there and go to lunch with them. And if they did jeopardize that, then they did jeopardize losing a client as well. So, I can totally understand from the Brazilian side of this where you can’t just put a dollar figure and say that you can only visit a certain number of people because there might be some who actually turn into bigger revenue. There might be some who have friends in other places. It’s who you know in Brazil that’s more important. So to have this secretary do personal business is probably a good idea, but at the same time there has to be an analysis of future business for Brazilians of some different kind of connection with these clients, whether they can do a meeting together with that sales executive. Something that keeps them in touch still because just cutting yourself off from these clients you would definitely lose your business. Also I was thinking about schedules. If you could make some kind of schedule that told the American executives why you were doing this and what clients you wanted to stick more closely to and have a report, then they are probably more likely to allow you to do that. But it sounded like here that they just wanted to have a certain way to get around the rule and do it the way they wanted to. So there was definitely a gap between the American executives and the Brazilian executives there.

 

Walter T. Atkinson

World Ship was a very interesting case study, mainly because having been in the airline industry for about 35 years, it kind of hit home, especially when it’s dealing with cargo or small packages. It was interesting because my very good friend is vice-president of cargo for the Brazilian carrier down there and we’ve talked about how you deal with a business down in Brazil. But when we started flying down there we had to fly into two different airports, but we were allowed to pick one airport when we got our final authority to fly into there. So we hired some local sales people. Well we thought that we’d hire local sales people to sell out of both airports and we’d truck the product back and forth to each airport. Well, that’s not the case because when I started meeting with the sales people down there, they had their set of customers in their general airport area and they didn’t go over to the other airport. They were not socializing with those individuals. Well, I couldn’t understand this. So by this time I had a lot of experience in international, but I’d never had any experience in this Brazilian concept of working with the customers a little differently, more on a social level. So I went along on several sales calls with the sales people. And they were long sales calls. You’d go in there and you’d have to sit down and you’d have to relax and you never even talked about buisness until the last 2 or 3 minutes of the sales calls. You’d walk in there, the sales person always got a big hug from whoever they were talking to and they’d ask about their families and they’d talk, everything was social. And business was probably about, over here, you know, in our country we’re talking 90% business, 10% social. Over there it’s about 90% social, 10% business. And we just couldn’t change that around. And finally we just had to accept that, you know, that is how we were going to do business down there. And mainly because we were an international air carrier flying into there we probably adapted a little bit quicker, but I still had people that worked for me back at headquarters in Miami that just couldn’t comprehend that. That was just not the way that you did business. Interestingly enough our operation was bought out by a major US package carrier who wanted our whole airline operation and they went into all of the markets we had. We had about 500 people working down there. And they tried to change things to exactly the way that they were doing things in the United States. Well, as of about 6 months ago, everybody who worked down in Latin America for us, that were Latin American nationals of each country, they’ve all resigned because they did not want to do business that way. And most of the customers down there have moved over to those carriers that still operate and give that same courtesy and service that they expect being in their country.

 

Brazilian Executive Comments

André Medeiro

OK, this case is interesting because in Brazil, and I believe in Latin cultures, physical contact it is very important, sitting with your client, talking, and being able to take care of his needs. When you change this, you are going to have strong resistance from those you have been working with and you may lose them to another company. This type of strategy isn’t well received. What you can do to try to change this, for those clients who will have to stop receiving direct visits, is that you can give them a price incentive. People in Brazil are very sensitive to price issues. If you lower the price just a little bit and say, “Look, if you use the phone system things will be cheaper” without a doubt the majority will change. I have no doubt about it. I once had an experience with televisions where we lowered the price on a pay-per-view package by 12 reals. We increased sales from 5,000 to 18,000 all because of 12 reals. So you can see that this case is very similar. If you give him an incentive, he’ll change without any problem at all. The thing is that over time you’ll get them to feel better about talking on the phone instead of speaking with a person directly, and with incentives he’ll adapt.

 

Senichiro Koshio

I’ve had experience as the relations manager at a bank, and doing business with clients is similar in any kind of business. And so I can make good comments about this case. What happens is that business is done between people, talking with people. And naturally from the business perspective we want to give greater attention to clients who provide greater revenues, greater earnings. But that isn’t really how it works. We also have to give attention to clients who don’t produce returns, but who do demand our attention. It really is difficult to resolve this problem, that of giving priority to some because it is important for the company, but personal relationships count a lot in every way. So, what is needed in this case is to try to find some middle ground between the relationship with people, doing business, talking with people, and having some mechanism for making priorities based on this policy. But following a rigid policy, eliminating some people because they don’t produce returns isn’t going to work at all in actual practice, in theory yes, but in practice no. Now in Brazil there is a thing called “dar um jeitinho.” There are rules, but “dá um jeitinho” means to not have to follow the rule. A typical example is this secretary, Sandra if I’m not mistaken, who sells products to clients, to the clients who aren’t well taken care of. And there is a lot of that in Brazil. If you want to make a rule, go ahead and make a rule, but there will always be a way to get around that rule. This is why they make rules, they make parallel rules, which are the Brazilian jeitinhos. And there is no way to avoid this habit that is part of Brazilian culture.

 

João Worcman

World Ship was enjoying considerable success in Brazil, but not as much as they wanted and so they began to implement some changes to increase productivity, following more of an American model. This perhaps took away from the direct attention that Brazilians are accustomed to because the change caused clients to be reclassified so that they wouldn’t, so that they wouldn’t take up so much time from the salespeople and from the central system that had been set up by the company. So they decided to divide the clients into three categories and some clients had to call, for example, the sales executive to talk to him, “No you have to call this 0-800 number or to the company’s central office. You are going to be reclassified and then maybe I can directly take care of you. Maybe you won’t be able to be taken care of by me.” Probably they didn’t talk to the client so bluntly but I think that is how it came across to the client. I really believe that they could have reduced this stress if the client, soon after the company had received this news, would have had the marketing folks be the first to contact him directly, and it wouldn’t had to have gone through the sales people. OK, and maybe it would have been interesting if they would have done some research to see how many of these clients weren’t able to be taken care of through the internet. Perhaps they could have done collections, payment plans, those sorts of things to increase productivity in the company. Now it is very important to note that Brazilian clients who are no longer being directly taken care of by sales people and who were used to being taken care of that way, they are probably going to want to know why. What they are thinking is that the company is probably no longer enjoying financial health like they were before, or maybe they will want the company to give them some kind of discount. They will want to have some sort of counter offer. If not they’ll think that the company only cares about money and that it doesn’t care about a long-term relationship with them. I think that World Ship really has to make this change because salespeople in Brazil are not used to and are not trained in appropriate time management. On the other hand here in the United States or in American companies they spend a lot of time training their sales force. They know how important this final connection is with the client and they take care of things more efficiently, helping clients in the best way they can. In Brazil sometimes the salespeople don’t get this type of training, which isn’t valued as much. So I think that as the company does this, putting this policy into effect, the salespeople will be able to spend a specific amount of time with the clients and they need to try to educate them so that they can work more efficiently. I believe this is positive.

 

Discussion Topics and Questions

  1. What is your opinion of André Medeiro’s observation and recommendation that Brazilians are very sensitive to price and that if World Ship were to lower the price for those clients that are now PCP2 customers they would accept the change more readily?
  2. What is your opinion of World Ship’s new policy? Do you find yourself sympathizing more with the American perspective or more with the Brazilian perspective? What recommendations would you give if you were advising the local manager Clóvis Oliveira? What would your recommendations be for the sales executive Nelson Barbosa? How would your recommendations change for those in the North American central office?
  3. Do you agree with Terry Kahler’s recommendation that you trust the business model? What are the ramifications of changing the model versus potentially not doing business in that area?
  4. Walter T. Atkinson seems to suggest that we are looking at a balance between courtesy and service on one end and efficiency on the other. Does one side exclude the other, or are there ways to maintain both?
  5. João Worcman observed that it would be helpful to keep data on what percent of the clients who have been assigned to a PCP2 status really have access to and indeed use the internet for shipping packages. What other data would you find useful for analyzing the effectiveness of World Ship’s new policy changes?
  6. What is your opinion of Senichiro Koshio’s observation that Brazilians bend the rules, break the rules, and make parallel rules. Is the “jeitinho” really so uniquely Brazilian?
  7. How valid of a concern is Paul Cluff’s when he observes that World Ship may lose future revenues from clients who are currently categorized PCP2 but who could potentially produce greater revenues in the future? How does the World Ship model account for future potential of its clients?
  8. How does one interpret the increase of over-the-counter sales and the new role that Sandra plays beyond her duties as secretary? What does it suggest in terms of World Ship’s policy and strategy?


 

Class 3 LESCANT

February 3, 2009

It was back in 1992 when David Victor published his LESCANT model of International Business Communication.  I still use it today because it seems to be the best way to categorize cultural differences.  The acronym LESCANT stands for Langage, Environment, Social Organization, Context, Authority, Non-Verbal, and Time.  What follows is a brief powerpoint slide presentation where I have summarized some of the major points of the LESCANT model.

PDF file version

Victor, David A. 1992.  International Business Communication.  New York, NY: HarperCollins Publishers Inc.

Santiago Top Ten

February 3, 2009

dscn4697It’s been quite a while ago that I wrote the Rio top ten, I had better get to a Santiago version.  Here are 10 items, in to particular order.

10. Plaza de Armas.  Walking up through the Paseo de Ahumada will bring you to the old plaza which features the main Cathedral in Santiago and a super spot to view colonial Chile.  It’s always a good people watching site too, with sellers, performers, and artists.

9. Santa Lucia Hill.  Maybe because the first time I ever went up this hill there was a big fire in town and I got to watch the whole event from a great top view, but I always enjoy taking a peek from Santa Lucia Hill.  On the hill you’ll also catch theater groups, singers, etc.

8.  Make sure to take in any one of the millions of places that serve churrasco sandwiches.  Plan on overeating, and if you ask for it “Italiano” you’ll get the tri-colors of avocado, mayonnaise, and tomato.

7.  San Cristobal Hill.  You can hike up, bike up, train up, tram up, drive up, but no matter how you get there, you’ll get a view of all of Santiago, north and south, and you can grab a little snack of cuchufli, mote, or palmeras.

8.  La moneda.  Maybe it’s the architecture, maybe it is knowing that it was the site of the 1973 coup attempt, maybe it is knowing that Allende committed suicide there, I don’t know, it’s just a cool place to visit.  Add the changing of the guards, or a quick stop to the museum underneath, and you’ve got a top ten spot in Santiago.

6.  Parque Forestal.  All along the Mapocho River is a park that makes for a great jogging path.  You can follow the park all the way from the Central Market on up into Providencia if you want.

5.  Pueblito los Domincos.  The arts and crafts that are sold are somehow cooler when located right next to the church.  I’ve always liked handicrafts more when you can see the artists making them in front of you.  Well worth checking it out.

4.  Bella Vista.  I’ve always loved how Spanish uses the word “bohemia” to mean artsy, in a way that it doesn’t have the same exact meaning in English.  Anyway, Bella Vista is the “bohemian” part of town, and fun to look around, including clubs and restaurants.

3.  Chascona.  Every so often it is fun to get a glimpse at how geniuses think. Visiting Neruda’s hideway home with Matilde gives you a view at how eccentric genius minds work.  “Oh yes, let’s make this room look like a boat’s galley.”  “Yes, let’s make a collection of the bizarre in this room.”

2.  Central Market.  I’m not sure why I enjoy this place so much because the smell of fish isn’t really the greatest smell in the world.  But I enjoy seeing all of the Paila Marina and the tons of seafood options that are there.  The fruit sections are always cool as well.

1. Universidad Católica.  Although we’ll be attending a lecture at the university, many people forget to take a little walking tour inside the many buildings.  There are some neat courtyards, gardens, and get-a-way spots that are totally unexpected.

CDUC team

February 3, 2009

Here’s a little summary of the notes that I took last week when visiting with CDUC (Claudio, Marcelo, and Francisca).

1.  Merchandizing.  US sports companies have tons of experience in merchandizing.  They have a wide range of products, distribution channels, and a wide vision of items to sell and ways to sell them.  Latin American sports is much more limited in this way.  CDUC is interested in hearing about the Univ. of Texas strategy.  What is the value of the UT brand? How does it get promoted?  CDUC would like to get a sense of the vision of UT merchandizing and specific ideas about the strategies behind it.  CDUC just recently made online purchases available, but they have just started and feel that there is much more that they can learn how to do.
2.  Naming Rights.  
Claudio recently took a tour of Ohio State University campus.  He was blown away by the facilities and the campus.  (OSU has a student rec facility similar to our Gregory Gym).  CDUC is also about to build some new facilities with basketball courses, facilities for weight rooms, physical fitness programs, volleyball, etc.  They couldn’t believe how impressive the OSU facility was, and how visual the sponsorship and support was:  bricks with the printed name of donors, different sections of the facilities that bare the names of honorees or donors,  plaques and signs with sponsorship, multi-layers sponsorships where shared by more than one company, etc.  CDUC, as a club, doesn’t have alumni per se, but they do have longtime members.  These have never been used for sponsorship or donations.  I would suggest that you learn about UT’s alumni programs and how they are used for sponsorship and donations.  You may even want to take some pictures at the alumni center, gregory gym, and the football and track fields.  The Chilean public is not used to this concept and the possibilities for growth in this area are gigantic.  The new facility that CDUC is going to build is a great opportunity to tap into new financial resources, implementing naming rights, and gaining sponsorship in ways that they never have before.  It may very well be that gregory gym or the improved football stadium will provide insights for them.
I should add that in Santiago (and in all of Chile in general) the most popular club is colo colo (with about 50%).  It is the team of the masses.  In second place is Univ. de Chile and they hold about 20% following.  CDUC takes third place, with about 8% of the fan base.  However, the 8% of the fan base for CDUC draws from a wealthier portion of the population.  So, although they only represent 8%, the purchasing power is much higher than the other leading clubs.  My sense is that this will be an important factor and you’ll want to understand its ramifications when you communicate with Francisca.
One final thing, Francisca is a great fan of field hockey.  Add a little twist to that area and she’d love it.

And here’s a little bio on the CDUC team that Erin sent to Francisca:

TEAM BIOS

 

Edyth Adedeji:

I am a first year student (Class of 2010) at the McCombs school of Business, University of Texas.  Prior to business school, I worked at Accenture for 5 years in its System’s Integration and Technology Consulting division section. I decided to apply to business school because I realized I like to play with numbers and I wanted to increase my finance knowledge. I love to play football(soccer) and I love to travel, so I am excited about working on this project.  I look forward to learning a new culture and learning more about a soccer club.

 

Shadi Afshar:

I am a first year McCombs student, part of the class of 2010.  I am concentrating in Marketing, but also have an interest in Operations.  Prior to business school I worked at Deloitte Consulting, focusing on extremely large technology integration projects.  Although I find the technology industry very dynamic and challenging, I wanted to change direction and work in industries I am more passionate about.  Arts, fashion, traveling and culture are aspects of life that excite me and this project provides an ability to dive into one of the most integral parts of the South American culture, Soccer.  I look forward to learning more as well as contributing to the experience.

 

Vikas Pokala:

I am a 1st year MBA student concentrating in Strategic Marketing.  Prior to business school, I worked at IBM as a product test engineer for the System-p brand servers.  I chose this project because I am interested in both brand management and sports.  It would be interesting to work on a project with both aspects.

 

Hitoshi Emura :

I am a 2nd year MBA student concentrating in Finance. I am a sponsored student by my employer, Nomura Security, which is a Japanese brokerage house. Prior to MBA, I worked at Merger and Acquisition Dept as a financial advisor for six years. After MBA, I will go back to Japan and work for Nomura again. Soccer is the most popular sports in Japan as it is in Chile. I am also a big fan of soccer. I started playing soccer from when I was 7 years old, and I am still playing in MBA soccer club in McCombs business school. This project is a great opportunity for me to observe and experience a real club management business. I believe that our international team can help the company explore possibilities to expand the club brand and business into international markets.

 

Erin Hammond:

I am a 1st year MBA student concentrating in Finance and Marketing. My undergraduate degrees are in Physics and Electrical Engineering, and I worked as an Electrical Design Engineer in the Military Aerospace industry. I chose this project for two main reasons among many. The first main reason is that soccer always has been and always will be a passion and way of life for me. I have played at the competitive level since I was in grade school. I continue to play competitively in leagues here in Austin and tournaments across multiple states. I believe that I know quite a bit about the soccer lifestyle for both athletes and fans. The other main reason is because my ambition is to start building a career at Nike when I finish my MBA. This project provides valuable business experience in the sports arena and helps me better prepare for my desired career path.