Assessing Problems

1
Assessing Problems

• Teams 2 Colombia, 2 Ecuador and 2 Venezuela and
  a leader (tie-breaker)
  
• Work with someone who read about the same
  country. Reach an agreement of what are the main
  problems/challenges of the country and why is
  similar/different to the traditional problems of
  LA.
• Expose your dyads perspective to the rest of the
  team
  
• Allocate 1,000,000 for expansion plans of a soft
  drink bottler in C, E and/or V assuming that the
  markets are very similar in size and consumer
  behavior
• Present your plan and justification.

2
Latin America and the World
3
Drivers of US interest in LA

• Spaniards had Catholicism..
• US had
• Manifest Destiny
• US as Gods tool to create a modern society
• Monroe Doctrine
• Two words to European countries Hands off!
• Roosevelt corollary
• Keep peace and help LA countries to keep their
  promises
  

4
Really short outline

• Colonial period (1520s-1840s)
• Monopoly
• Independence (1850s-1880s)
• England took the lead
• Economic drive, no politics
• US presence was mainly in Mexico and Cuba
• French influence culture and values of high
  society.

5
Outline (cont.)

• 1880-WW I
• Great Britains influence went down, US up
• US military interventions/war with Mexico and
  Cuba.
  
• Racism and power
• Marti, Dario and Blanco-Fobona
• Professionalization of the military
• Trains, fruits, and communications

6
Outline (cont.)

• WW I WW II
• European countries had to finish their
  investments in LA.
  
• US as a political, economic, pop culture and
  military force.
  
• Great depression created a need to look inward
• Other countries were also interested in LA
• Italy
• Germany

7
Outline (cont.)

• WW II 1960s
• US accounted for 2/3 of global exports
• No interest in LA until communism became a
  threat
  
• Alliances
• Black gold
• Investments in LA had no large effect in its
  progress
  
• Economic Commission for Latin America
  (http//www.eclac.cl/)

8
Outline (cont.)

• 1960s-1980s
• Cuba
• Alliance for progress
• Growth and social change
• Fight non-pro US groups
• Manufacturing sector vs. raw materials
• Failures of reforms
• Debt No growth More debt Crisis
• Brady plan

9
Cuba

• A la Maestra, hermano!
• Fidel Castro raises to power
• Expropriation of US assets
• Tension
• Embargo
• Joke of Cubas ubiquity

10
Outline (cont.)

• Heavy concentration
• 3 countries had the largest share of FDI 88
• Argentina, Brazil and Mexico
• 6 industries account for 84 of FDI
• Motor vehicles, food products, beverages and
  tobacco, wholesale and retail trade, electronics,
  petroleum, and chemicals,

11
Outline (cont.)

• 1990s
• FDI Privatization, purchase of new assets and
  private assets
  
• Privatization program
• Lack of technology
• Vertical integration
• Caribbean countries receive 4 of FDI
• Intraregional investment 4.35 billion
• Chile, Colombia and Venezuela

12
FDI in LA 1990-1998
13
FDI in 1988
14
Strategies for the new Millennium

• The search for greater efficiency through
  internationally integrated production systems of
  transnational corporations
  
• The search for access to national and subregional
  markets
  
• The search for raw materials
• The search for access to domestic markets for
  services.

15
Culture and IB
16
What is culture?

• Broad view
• Common values and expectations as well as
  supportive stories, legends, rituals and
  ceremonies (Schein)
  
• Narrow view
• Basic assumptions that underlay shared meaning
  and values.

17
Levels of Culture (Schein 1985)
Artifacts and Creations Technology Art Visible
and audible behavior Values Basic Assump
tions Relationships to environment Nature of rea
lity, time and space Nature of human nature Natu
re of human activity Nature of human relationship
s
Visible but not decipherable Greater level
of awareness Taken for granted, invisible
, preconscious

18
Why study culture in IB?

• Human resources
• Expatriates
• Management
• Marketing
• Design of products and services
• Advertising
• Investment decisions
• Joint ventures instead of acquisitions

19
Elements of culture

• Material life
• Language
• Social interactions
• Religion
• Education
• Value systems