The social cultural environment refers to a set of customs and beliefs together with behaviour and practices found within a population. In other words, it is the immediate social and physical setting where people live or where something happens or something develops from. On the other hand, the political environment refers to the government or state with its legislations and institutions, together with the private and public stakeholders who operate and interact with or influence that system. Usually, the international business persons or international business companies examine the social-cultural environment prior to entering their target markets; they also pay close attention to the political environment so as to gauge how the government would affect their businesses.
Over half of Brazil’s constituent states enjoy a strong political stability. However, there are some states which experience political instability; this might have been as a result of poor governorship, corruption and illegal activities in the states concerned. Pre and post-election political alliances have a great impact on the overall level of political stability in Brazil. The state legislators often support incumbent governors in order to promote their political interests; by joining a ruling alliance, they are more likely to withdraw their support, for instance, in the event that a governor’s term draws to an end or suffers from waning popularity. On the other hand, on examining the economic environment of Brazil, its slowdown has been concentrated in manufacturing whereby, states with manufacturing bases post weaker growth rates while the states that have primary or tertiary sectors play more roles and fare better economically.
In the Latin American nations, Brazil has the largest economy and the second largest in the western hemisphere; it generally has the seventh largest economy by nominal GDP in the world and the seventh largest by the purchasing power parity. Brazil is one of the fastest growing economies in the world. The three major parts that contribute to its economy structure include agriculture, industry and services. Brazil has a large population and a great geographical variation. It, however, presents high levels of income disparities. Generally, the income inequality, GDP per capita and illiteracy rates, among its states are associated with the life expectancy. There is also an association between income and mortality rates which is possibly mediated by education. The low social class is associated with the relapse from acute leukaemia among the Brazilian children; meaning health is also an important factor. Income inequalities that occur among the social groups are contributed by violence which end up causing death, and thereby affect the income levels. The serious lack of resources in areas with greater income disparity has putative mechanisms as a consequence. Over the years, however, the income inequality has reduced drastically.
The Brazilian society originally had the Mediterranean double moral standards for men and women. Men had more power than women but at the beginning of the twentieth century, the Brazilian women were allowed access to schools and employment, but they were still no on equal foot with the men with regards to family affairs. However, in the twentieth century, women became entirely equal to men for all legal purposes. Nevertheless, there still are relatively few women in the position of power; they have low political and economic participation and power over economic resources. The trade and other economic policies have also contributed to the economy improvement in Brazil. Its government dominates many areas of the country’s economy and hence undercutting the development of a more vibrant private sector. The government services and efficiency are inadequate, and it seeks to be more skilled at collecting taxes than at implementing reforms.
Under the Hofstede framework, it is may be observed that values in Brazil are influenced by culture. There are five primary dimensions that assist in differentiating cultures namely; power distance, individualism, masculinity, uncertainty avoidance and long-term orientation. Brazil is influenced by a high uncertainty avoidance meaning that it has a low level of tolerance for uncertainty. On the other hand, the dimension of power distance deals with the fact that all individuals are not equal in the society; it, therefore, expresses the attitude of the culture towards the inequalities. Brazil, therefore, reflects a society that believes that the hierarchy should be respected; meaning that inequality among different people is accepted. Power is distributed differently and this, therefore, justifies the fact that the people with power have more benefits than those with less power. For instance, in a company there is one person who takes complete responsibility of the business.
Individualism is also another dimension that is influenced by culture under the Hofstede framework. It is the degree of interdependence that a society tries to maintain among its members; it majorly deals with the self-image of an individual, where the individualists take care of themselves and their families only. In Brazil, people are integrated into strong cohesive groups from the time of birth, and this continues to protect its members in exchange for their loyalty. Therefore, in a working environment an older and powerful member of the family is expected to help a younger member of the family to get a job in his company, the same applies in business and is important because it creates trustworthiness and long lasting relationships.
On the other hand, the dimension of masculinity means that the society is driven by competition, achievement and success and, in this instance, the success is defined by the winner or the best one in the field; the score in this case is said to be high. Indulgence is also another dimension that is defined as the extent to which people try to control their impulses and desires based on the way they were raised. Brazil is said to be an indulgent society, where people generally exhibit a willingness to realise their impulses and desires to enjoy life and have fun. They, therefore, possess a positive attitude and a tendency toward optimism. In addition, they value their leisure time and spend their money the way they want to.
Brazil has undergone major and drastic economic and social changes due to the urbanization in the 1970s and globalization at the end of the Cold War; this has led to a high-context Brazilian culture. This encompasses the cultural behaviours such as rationality and emotion, individuality and collectivism, straightforwardness and indirectness and trust in self and trust in the community. Economically developing societies, generally, tend to adopt cultural values from already economically developed countries at a higher rate and this is the case in Brazil. Brazil as a developing country is, however, still pursuing horizontal digital inclusion; for instance the technological knowledge of using computers and the internet is still a privilege among the middle and upper classes together with the younger generations.
In an instance where Brazil conducts business with New Zealand, there would be certain cultural differences, for example, it is important to note that communication is a very important issue in business. Therefore, language is fundamental especially during negotiations. Although it is not always indispensable to know the partner’s language, several studies have shown that there are links that exist between successful companies’ performance in winning new businesses in foreign markets, and the ability of the companies to conduct their businesses in the language of their customers. If there is a language barrier, however, there is a high possibility that the business deal would not be as successful.
The political environment in a country is a critical concern for the international economy. It should be understood that the political and legal environment of the foreign market is different from that of a domestic market and the complexity increase with an increase in the number of countries in which companies conduct business. The government policies and regulations also motivate internationalization. Some governments give support to domestic companies to export and to invest in foreign countries. Democratic nations, more often than not, have stable governments despite head of states changing from time to time and both the economic and political policies remain intact. There is a risk to business interests resulting from political instability, which may result from war, terrorism, labour strikes or other factors. International businesses face the economic risks that may result to imposing restraints on the business activity to protect national security, protect an infant industry or raise revenues. The government may also mandate local ownership and greater national involvement in a foreign company’s management.
Deaton, A., & Hopkins, J. (2010). Analysis of Households Surveys. New York: University Press.
Muniz, O. T. (2012). Differential Reproduction, Poverty and the Dynamics of Inequality in Brazil. New York: University of Wisconsin-Madison.
Welford, R. (2013). Business Strategy and the Environment. London: John Wiley and Sons Ltd.