Implementing Globalization Strategies in Latin America

the people within it. One way to conceive the strategic decision process is to paint These demands have been especially challenging for comtwo opposite cultural scenarios in business organizations, one panies operating in Latin America in recent years. After what totally authoritarian and the other totally empowering. In the has been described as the “lost decade” of the 1980s, national first, there is no participation by anyone other than the owner economic policies throughout the region have shifted away or “patrón,” in the second, everyone in the organization is from active state intervention to deregulation, the opening of provided with the resources and incentives to fully develop economies, and the invigoration of markets. This has pretheir creative potential. Between these extremes, one might sented both problems and opportunities for Latin American imagine several intermediate cultures, such as a rational planenterprise. New markets have opened, but competition has ning culture that is basically top-down but allows for some intensified. input at middle levels or a culture of negotiation and conflict As discussed in the preceding article by Esteban Brenes, resolution. most companies throughout the region are abandoning the The strong tradition of centralism, inherited from Spanish short-term notion of “national defense” to seek strategic allicolonial governors and intensified by personal loyalties, has ances, expand regionally and internationally while they posiproduced the authoritarian style so often found in the tradition themselves to compete with multinational rivals in their tional Latin American family firm. This centralist tradition has own countries. And they also have taken steps to improve produced a vicious circle of bosses who refuse to delegate their internal capacities to compete, as the cases in this Special and employees who are unwilling to accept responsibility. Issue demonstrate. Many of the early INCAE case studies described problems of Now that we have examined the strategies that companies organization and control in this type of firm. Among the in Latin America have been pursuing in the new global envicases in this volume, these traditions may be observed in the ronment, let us turn to how they have been implementing Mexican air conditioning company prior to its purchase by these strategies and examine the lessons that might be learned Carrier and in the paternal authority exercised in Virutexfrom their experience. The way in which a company impleIlko, S.A. before the organizational process initiated by the ments its strategic will depend in large part on the way in founder’s eldest son. which it formulates strategy, as the two activities are inextricaWe might expect that the changes in the external combly bound in a single process. We shall therefore begin by petitive environment would obligate Latin American compalooking at the strategic decision process as it occurs in the nies to move along this continuum from the authoritarian, Latin American company, as revealed by the cases presented directive extreme toward the center. It is reasonable that would in this issue. We shall then turn to how Latin American be some movement toward opening the firms to participation