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| Part I |
Understanding the Latin American cultural and economic context |
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1 Culture and human resource management in Latin America
ANABELLA DAVILA AND MARTA M. ELVIRA
Defining the Latin American management model has been the aim of many studies. Most of these studies highlight two cultural emphases upon which the Latin American management model is based: social relationships and respect for authority (Davila, 2004; Diaz-Saenz et al., 2004). These characteristics themselves rest on work values that suggest an appropriate cultural frame for understanding how Latin American organizations manage human resources (HR). Understanding such values will help scholars explain HR practices and their influence upon organizational performance in Latin America.
In this chapter, we first review research on Latin American work values and then suggest a cultural framework to explain how such values influence human resource management (HRM) in the region. We conclude by suggesting cultural guidelines to improve such management.
Work values in Latin America
Several scholars and practitioners have described the Latin American management model as transitional or in the process of development (e.g., Abarca et al., 1998; Aguilar, 1993; De la Cerda and NĂșñez, 1993) because Latin American firms are trying out different theories, methods, and tools proposed by developed countries. This book is based on different assumptions. We assume that Latin Americaâs work culture has developed through a unique historical process shaping its economic, political, and societal structure. We view Latin American organizations as embedded in their historical tradition even though globalization forces have deeply changed the region. These combined historical and global processes have determined unique characteristics for business management and created a hybrid management model. That is, we find that successful organizations in Latin America â international or local â use global as well as local management practices. Nevertheless, universally accepted practices are more effective to the extent that they respect and adapt to local idiosyncrasy. To contribute to the development of HRM in the region, we should therefore study the local culture in which these practices exist.
Geertz (1983) argued that local knowledge could only be acquired from the nativeâs point of view. He used Kohutâs method of distinguishing between local knowledge concepts of âexperience-nearâ versus those of âexperience-distantâ. Geertz explained these concepts as follows:
An experience-near concept is, roughly, one that someone ⊠might himself naturally and effortlessly use to define what he or his fellows see, feel, think, imagine, and so on, and which he would readily understand when similarly applied by others. An experience-distant concept is one that specialists of one sort or another ⊠employ to forward their scientific, philosophical, or practical aims.
(1983: 57)
Our aim in this section is to identify experience-near concepts of work that Latin Americans use naturally, and to relate these substantively to experience-distant concepts of HRM theory. Thus, we focus on Latin American work-related cultural values.
While work is intimately connected to organizationsâ technological context, work values derive from social, economic, and political environments and are thus rooted in history. Given this, the study of work values will require examining national culture as an institutional process (Guillen, 1994). Hofstede (1982: 21) defined culture as âa collective programming of the mind that distinguishes members of one group from another ⊠Culture, in this sense, includes the system of values; and values are part of the cultureâs infrastructure.â Hofstede proposed the dimensions of power distance, individuality, masculinity, and uncertainty avoidance as critical to differentiate national cultures.1 We use Hofstedeâs research as a point of departure because his work is widely recognized and used to study cultural differences. Then, we add a finer reading of work values in the region.2
The âpower distanceâ dimension indicates the degree of inequality accepted as normal within a society. The power distance index (PDI) is measured such that the greater the level of equality in a society, the smaller the power distance, and the lower the equality the greater the power distance index. Based on this index, Latin American countries are characterized by a high power distance. PDI values for these countries are: Panama (95), Guatemala (95), Mexico (81), Venezuela (81), Ecuador (78), Brazil (69), Colombia (67), El Salvador (66), Peru (64), Chile (63), Uruguay (61), Argentina (49), and Costa Rica (35). Organizations in societies with high power distance tend to be centralized and pyramidal and have many supervisors, large wage differentials among occupations, a large percentage of unskilled workers, and a higher appreciation for clerical than for manufacturing jobs (Hofstede, 1982).
âIndividualismâ is the degree to which people of one country prefer acting individually rather than as member of a group. The dimension opposite to individualism is âcollectivismâ. A collective culture is characterized by low individualism. Latin American countries rank high in collectivism and low in individualism according to the individualism index (IDV), as shown in the following measures: Argentina (46), Brazil (38), Uruguay (36), Mexico (30), Chile (23), El Salvador (19), Peru (16), Costa Rica (15), Colombia (13), Venezuela (12), Panama (11), Ecuador (8), and Guatemala (6). Organizations in collectivist societies are characterized by a concern for the individual and his/her family welfare, as well as reciprocity for loyalty and a sense of duty. This dimension includes collectivism at different levels: the primary group (in-group) or an entire community (out-group) (Hofstede, 1982).
According to Hofstede (1991) power distance and collectivism are positively correlated. That is, countries high on power distance tend to be more collectivistic: people who depend highly on primary groups also tend to rely on authority figures. Therefore, organizational management in a collectivist society is management of groups, not of individuals.
The âmasculinityâ dimension, whose opposite is âfemininity,â concerns the degree to which values for assertiveness, performance, success, or competition are manifested in society. In general, these values are associated with the social role of men and prevail over other values such as quality of life, personal and warm relations, service, concern for the weak, and solidarity, goals associated with womenâs roles in most societies. In this masculine dimension, Latin American countries projected a dispersed scale of highs and lows according to the masculinity index (MAS): Venezuela (73), Mexico (69), Colombia (64), Ecuador (63), Argentina (56), Brazil (49), Panama (44), Peru (42), El Salvador (40), Uruguay (38), Guatemala (37), Chile (28), and Costa Rica (21). Organizations in more masculine societies expect young men to advance in their careers, while few women occupy decision-making positions (even if women do work in low-skill jobs with low salaries) (Hofstede, 1982).
Finally, the âuncertainty avoidanceâ dimension concerns the degree to which people in any society prefer structured situations in which rules for appropriate behavior are clear. Here, Latin American countries scored high according to the uncertainty avoidance index (UAI): Guatemala (101), Uruguay (100), El Salvador (94), Peru (87), Argentina (86), Chile (86), Costa Rica (86), Panama (86), Mexico (82), Colombia (80), Brazil (76), Venezuela (76), and Ecuador (67). Organizations in societies high on uncertainty avoidance are bureaucratic, task-oriented, less willing to make individual or risky decisions, ritualized, and dependent on power to control uncertainty (Hofstede, 1982).
Montaño (2000) critically analyzed Hofstedeâs dimensions in the Latin American context. He stressed that high-power distance characterizes most Latin American countries, except for Argentina and Costa Rica.3 Collectivism is also common in Latin America. However, the masculinity index shows greater dispersion and is only high for a few countries there. High uncertainty avoidance is not unique to Latin America as a developing region, since even established industrialized countries like Japan or France also exhibit this trait.
To understand the influence of national culture in the management and functioning of Latin American organizations, the dimensions of power distance and collectivism need to be explored more thoroughly. DâIribarne (2001) further suggests the need for an anthropological perspective to highlight each cultureâs internal coherence. He argues that societies do not distinguish themselves through universal characteristics of action, but through the meaning they give to action.
Meaning is acquired locally and given to words that describe how common life is organized. It is easy to mistake wordsâ local meanings because equivalent, similar-sounding words cross all cultures. Yet âthe same word does not necessarily evoke in all of us the same realityâ4 (dâIribarne, 2001: 8). It is the meaning of that word which makes us culturally different. Take for example a comparative study of automotive assembly plants in six countries â five European and one Latin American â by Wilkens and Pawlowsky (1997). They found no evidence of the concept âself-managedâ work teams in France or Mexico, although managers in these plants described their plant operations as structured into self-managed work teams. Wilkens and Pawlowsky use a German definition of self-managed work teams requiring a high degree of self-organization. French and Mexican managers had their own separate definition: teams could be self-managed when workers had discretionary control in only selected parts of the production process.
This example of self-managed work teams illustrates how any concept can have a culturally determined meaning. For dâIribarne (2001) concepts are legitimate to the extent they have a local meaning, for which the culture rejects other meanings of the word. For management models to be accepted in a given culture, they should be perceived as legitimate. Managerial models and concepts can sometimes face absence of meaning and rejection when words have different meanings in the society in which they are applied versus that in which they originated.
Given this background, we aim to understand the local meaning of power distance and collectivism in Latin American societies by first identifying within these two dimensions two value categories: respect for authority and social relationships. These categories reflect a hybrid cultural environment. We used Hofstedeâs definition of values: âa general tendency to prefer certain states of behaviors over othersâ (1982: 18). Next, we explain how these work values appear in organizational contexts and then interpret how HRM in Latin America reflects these values.
Respect for authority
Power distance is evident in different ways within Latin American organizations. Below, we review some empirical studies on power distance and interpret its manifestations with reference to HRM practices.
Benevolent paternalism
A Latin American supervisor has the personal obligation to protect his/her subordinates (Osland et al., 1999). In Mexico specifically, s/he is entrusted with safeguarding the personal needs of workers and their families (Greer and Stephens, 1996). Researchers describe this paternalism as the old hacienda (private, large land-field) leadership style now reproduced in current economic organizations (Diaz-Saenz and Witherspoon, 2000; Martinez, 2003). Characteristics of this leadership are those of a patrĂłn (ownerâboss) who, besides paying salaries, takes care of his/her workers by providing room and board for them and their families. Under this welfare system, the community living in a hacienda develops strong familial bonds. Upon this social structure paternalistic leadership is based: it evokes a âfatherâ who cares for and nourishes his/her children benevolently. Such paternalism is permissive and provides moral support. The result might be that children tend to develop a dependency toward authority figures when they grow up and enter their work life.
We note that Page and Wiseman (1993) find this paternalistic style mainly at the top management level, not the immediate supervisor level. They found that Mexican workers felt free to skip their immediate supervisor and speak to the general manager about their problems â whether work or personal.
At the organizational level, we find that âfamilyâ is the metaphor used by management for leading Latin American firms. For example, dâIribarne (2002) found a collectivistic mentality in a Mexican subsidiary of an international company: âwe are like a familyâ his informants revealed. By this they meant a place to look for support and trust, a social unit based on strong solidarity and mutual understanding. The author found supervisors in roles as âbrothersâ, not âauthoritarian fathersâ which everybody fears. This âfamilyâ metaphor fits well the Mexican mentality where individuals growing up are not fully independent and need the support of their community to reach maturity (Paz, 1950, cited in dâIribarne, 2002). These findings suggest the existence of a paternalistic variant which dâIribarne labeled fraternalismo (brotherhood). In fraternalismo, social relations are oriented to eliminate distances and create a community of support and respect.
Conflict and confrontation
Lenartowicz and Johnson (2002) found that Latin Americans prefer to depend on somebody else at work. They accept authority from and over other employees, if it is conferred on people in a systematized hierarchy. Accepting authority is demonstrated by behaviors that aim to avoid conflict and confrontation with superiors, such as developing friendly, buffering relationships with them. Confronting or entering into conflict with a superior in public could be considered offensive to the superior as well as to other colleagues (Osland et al., 1999). Subordinates who exhibit these behaviors publicly in Mexico could be labeled as disobedient, and then transferred or punished (Page and Wiseman, 1993). The Latin American philosopher Zea (1992) stressed that Latin Americans avoid making and receiving public criticisms because they are considered denigration. Thus, to avoid conflict or confrontation in public, workers use jokes, gossip, or passive-aggressive behaviors (Osland et al., 1999). Different subcultures exhibit different variations of this behavior. Abarca et al. (1998) found that Chilean executives with high levels of education consider themselves assertive and ready to face the consequences of their actions. This did not happen at lower organizational levels in Chile, where individuals depended on the experience of international experts to avoid risky decisions.
Social distance
Latin Americans value hierarchy because it defines status and social distance between superiors and subordinates. Hierarchy is thus used as a mechanism of social differentiation. For example, job titles are local symbols of power distance. As Flynn (1994) indicates, international recruiters agree that job titles in Mexico are inflated and do not necessarily reflect work abilities. Additionally, fringe benefits are more highly valued than wages by Mexican executives, because they symbolize social status. Abarca et al. (1998) also identified accepted social discrimination practices in Chilean companies, based on external status symbols such as appearance, age, and gender that are typically correlated with social status.
Egalitarian sense
Latin American societies and organizations have a positive perspective on paternalistic leadership and rarely consider individualsâ autonomy. Latin American culture looks for a balance between âequals that do not cooperateâ and âauthority that intimidatesâ (dâIribarne, 2001: 28).5 The model that better adapts to this mental structure is a community which offers intense mutual support yet coexists with a managerial authority that gives orders, criticizes and controls. Thus, it appears contradictory for managers to approach lower-level employees and so reduce the power distance that both groups value. Davila and Garcia (2004) found that committees â cross-hierarchical and cross-functional â were legitimate managerial efforts to approach sub...
