Week 1 Takeaway: Sao Paulo Business and Culture

My homework assignment this week was to provide a 1 page reflection paper on some of the teachings and learnings from this week’s classes. Unfortunately, with such an intense amount of information, concepts, and culture exposure during these past few days … writing 1 page paper sounded impossible. Especially since I really like to hear/see myself talk…

For the paper, I chose to focus on one key quote, concept, or theme from each professor/guide, and how it helped shape my unique cultural understanding of the people and business in Sao Paulo. After evaluating the notes and pictures I took this week, I am submitting what you see below. Take much of my “facts” with a grain of salt, as they are completely unverified.

Sao Paulo City Tour: “This train station is an exact replica of the King’s Cross Station in London.” -Tour Guide
Our Sao Paulo tour guide said this proudly as we walked around the mega train station pictured below. At first I thought it exciting as well, but then the day went on: the Banespa skyscraper built as an exact replica of the Empire State Building, Cable cars surrounding a “Largo de San Francisco”, Ibirapuero Park resembling Central Park in NYC, the upcoming Templo de Solomao being built as an exact replica to Jerusalem’s Temple of Solomon. These buildings provide visiting tourists and businesses with familiarity and sites to visit, but it was a slight disappointment to me as well. In my pre-trip preparations, I read about how Sao Paulo is known for its incredible architecture and design by famous designers like Azevedo, Niemeyer, Marx, and Mendes da Rocha. There definitely are other incredible works, such as the Sao Paulo Museum of Art that is suspended above ground by 2 lateral beams, but we we were not exposed to these. This theme of replication may tie back to Brazil’s natural culture to avoid planning. More on this next…

 

Brazilian Business: “You don’t have to do it today, if you can pay someone to do it tomorrow.” -Prof. Gilberto Sarfati

Brazil is a culture of avoidance. The culture has a lack of planning, accountability, timeliness, and inhibits a general stereotype of “”laziness””. Sound bad? To us, sure … but apparently not to native Brazilians. This is the style they enjoy, and business tends to follow the trend. If a Brazilian worker says “”I will get this to you tomorrow””, what they are really saying is “”I will get this to you anytime after today.”” Coming from a consulting background, this concept feels exceptionally foreign to me. How can you deliver results by the timelines promised, meet contractual obligations, and provide high value consistently if you do not respect timelines? The architecture examples discussed above help explain my understanding of this concept. Why expend more effort and money to design a new train station, when there is a very reputable train station in England you can easily replicate? To readers unfamiliar with São Paulo, this may sound like negative stereotyping and discrimination. However, this is how it was shared to us by Prof. Sarfati, and apparently how most people from São Paulo would describe themselves as well. To Brazilians, it is not laziness, in fact it is considered noble to not work. But perhaps this is due to the lack of social discrimination in Brazil. More on that next…

 

Brazilian Culture: “I am an Egyptian Jew, my wife is Japanese, but we are both Brazilian and that’s it.” – Prof. Gilberto Sarfati

Brazil is a true Melting Pot. Initial ethnic figures were a mixture of native Indians, black slaves, and Portuguese colonizers. Now, as a historian I will need to look this up at home, but apparently the Portuguese plan was never to colonize and push other cultures out, like the Spanish and English. Portugal simply wanted to export the resources back to Europe and did not care about the inhabitants of Brazil. Instant social acceptance, right there. From the very beginning, these cultures merged together and it was not only acceptable, but expected, to instantly merge communities together. There is literally no term for “”Mixed Couple”” in Brazil, and their has never been a Civil Rights Movement. Simply put, there are no minorities in Brazil, because social integration is natural. São Paulo is only 150 years developed as well, with means everyone is basically still an immigrant. Being from the US, this is very difficult to believe, but here is an example: The most authentic Sao Paulan food is Pizza (Italian), and the most common is Rice and Beans (African). Having spent years studying social culture and humanities in the US, this concept is amazing to me. Imagine how different the world would be if European countries all shared this concept before spreading out to “”conquer”” the western world. All cultures in Brazil simply work well together, which is one of the reason’s the Natura company’s Ekos line is so successful. More on that next…

 

Natura Company Visit: “The sustainable business model for Ekos takes into account the socioeconomic development of rural producers” – Natura website

On Wednesday we visited the Brazilian company Natura. Natura is a consultant-based cosmetic company similar to Avon or Mary Kay. The produce products and catalogs, and then employ millions of consultants to sell them in stores, door-to-door, etc. One of the key differentiators of Natura, is their consistent focus on corporate responsibility to the environment, sustainability, and organic products. To understand this better, we discussed a new product line called Ekos, which partners with 50 underdeveloped communities in Brazil that help produce the goods. As a skeptical American, I naturally think “”ok, Natura sought out these communities so they can take advantage of cheap labor””. However, if you read their website, watch the videos, etc. you can see that this is not the case. The Ekos line truly helps benefit these communities, lifting them out of third world status and allowing Natura to give back to the community as much as they take. Much more than just paying for the labor, Natura is investing in communities with infrastructure, technology, etc. According to my very limited research, these amenities are more important to the community’s wealth than the paychecks they receive. However, this may be because their paycheck is literally worth less tomorrow than it is today. More on that next…

 

Banking in Brazil: “Brazil has the highest inflation rate of any country. The cumulative devaluation of Brazilian currency, over past 70 years, added up to 2,750,000,000,000,000%.” Prof. Rafael Schiozer

Many of our professors talk about the inflation rate in Brazil, and how it is the highest in the world. Stories were shared about getting your paycheck and immediately buying groceries, because food prices go up 20% the next day. I struggle with understanding the true impact of this inflation rate, but even more I wonder how Brazil can be an emerging market if investments will be worth so little over time. Why would I invest money in this market, if it will be worth 20% less tomorrow? I imagine this has been a significant barrier to entry for many foreign companies looking to do business in Brazil. However, this is also probably why the banking industry is so successful. Citibank and HSBC expanded to Brazil and have done very well here. And you can not walk 10 feet without seeing an advertisement for Banco Itau, Brazil’s largest domestic bank (even our classroom is sponsored by Itau, see pic). The Brazilian President made this one of his top priorities over the past 10 years, championing a campaign to move to “”0% inflation””, and it will be very interesting to track this and foreign expansion here over time.

This reflection was supposed to be just 1 page, but it is hard to stop once you get going. I’ve already shared, from previous posts, my reflection on a couple other professors and concepts. and will continue to reflect on these learnings and more while down here. Brazil is an incredibly unique country and Sao Paulo’s financial success is one that every business student should study. No doubt the other programs at the Carlson school are equally beneficial, but I am very glad I chose this one and am excited to see what next week’s classes and company visits bring.

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