Coca-Cola in Brazil

Topics: Luiz Inácio Lula da Silva, Brazil, Coca-Cola Pages: 27 (8739 words) Published: November 28, 2011
1.1 - Country Introduction2
1.2 - Legal Environment2
1.3 - Political Environment2
1.4 - Economic Environment3
1.5 - Business Environment4
1.6 - Culture5
General Brazilian Cultural Values5
Comparison of Cultural Values between Brazil and America5
Power Distance Index (PDI)6
Uncertainty Avoidance Index7
Long-Term Orientation7
2.1 - Coca-Cola in Brazil7
2.2 - Corporate Organization9
2.3 - The Organization of Coca-Cola Brazil10
2.4 - Diversity and Human Capital11
2.5 - Leadership at Coca-Cola12
Geocentric Leadership and Human Capital12
3.1 - Challenge #1 – Brazilian Tax System12
3.2 - Challenge #2 – Potential for Changing Government Relations13
3.3 - Challenge #3 – Recruitment of Transnational Managers14
3.4 - Challenge #4 - Labor Relations16
3.5 - Challenge #5 – Market Share17
4.1 - Conclusion18
Works Cited19

1.1 - Country Introduction
The Federal Republic of Brazil is the 5th largest country in the world with 3.3 million square miles divided into 26 states and 5,000 municipalities. It also has the fifth largest population in the world at approximately 200 million people (CIA, 2010). Only China, India, the United States, and Indonesia currently have larger populations. Having gained its independence from Portugal in 1822, Brazil experienced many of the typical political and social challenges associated with Latin American colonies achieving autonomy. After a century and a half of successive dictatorships, the Constitution of 1988 established a democratic government with three branches: executive, legislative, and judicial. Brazil has since been a relatively stable country.

1.2 - Legal Environment
Within its judicial system, Brazil has both federal and state courts. Federal courts are primarily responsible for cases relating to foreign states or international agencies and maintain jurisdiction over labor and electoral issues. The state courts generally preside over commercial cases. With regard to legal formation of businesses, Brazil has similar forms to those common in the United States. The Brazilian version of a limited liability company, a sociedade limitata¸ is considered most appropriate for wholly owned subsidiaries (Demarest e Almedia, 2006) (See Exhibit 1). Another important aspect of the legal environment is Brazilian antitrust laws. These laws are enforceable whenever an action is determined to “limit or restrict free competition or result in control over any relevant market for product concentration”. A primary difference from U.S. antitrust law is that companies operating in Brazil are not required to obtain preapproval from the authoritative body, Conselho Administrativo de Defesa Econômica (the Administrative Council for Economic Defense or “CADE”) and may negotiate questionable deals. CADE does, however, reserve the right to remedial action in the event that it determines violation of antitrust law (Badra and Romano, 2009).

1.3 - Political Environment
Some of the most important political parties in Brazil are the Workers’ Party, Social Democratic Party, Democratic Movement Party, and Democrats (formerly the Liberal Front Party). The current chief of state and head of government, President Luiz Inacio Lula da Silva is a member of the Workers’ Party, which is considered a leftist party that appeals to the working class, yet maintains relatively conservative economic positions (Brazil - Political Parties, 2010). This has been consistent throughout President Lula da Silva’s two consecutive four-year terms. He is widely credited with the social progress achieved in Brazil while defending relatively conservative fiscal and monetary policies. Upcoming elections will determine the next president to take office in 2011. Candidate Dilma Rousseff is President Lula da Silva’s Chief of Staff and endorsee. The other major candidate is José Serra,...
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