This chapter seeks to explain the common features of the ideologies and practices of management in Latin America. Using an institutional approach, the authors show that specific historical, social, and economic conditions have shaped a certain way of management unique to this region. Latin America´s colonial heritage and its contemporary institutions have led to a hybrid managerial ideology that defines how firms interact with their local and global environments.
TopLatin America: Economic And Cultural Background
The first issue to be discussed is the pertinence and the limitations of analyzing Latin America as a common context for management research. Latin America, understood as Ibero-America, consists of one former Portuguese colony (Brazil) and eighteen1 countries which have emerged from former Spanish colonies in the Americas: Argentina, Bolivia, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela. These countries differ in size, demographics, racial composition, and level of development, among others. It is thus legitimate to ask whether Latin America is a useful unit of analysis for describing management ideologies and practices. We will approach this question from two points of view: economics and cross-cultural comparisons.
Figure 1 shows GDP per capita of Latin American countries compared to Canada and the USA. As can be seen, income levels for 2012 varied by a factor of 8.76 between Latin American countries, with Nicaragua as the lowest and Chile as the highest. These data correlate with a greater dispersion in income distribution which is higher in all Latin American countries (except Nicaragua) than in the USA. In turn, this is still substantially higher than Canada’s Gini index (see Figure 2).
Figure 1. 2012 GDP per capita in US dollars