Short study of the specificity of managing a Latin American company, taking IT developer Blue Trail Software as an example.
In late 2018, Julián David Cortés Sánchez, professor of the Universidad de Rosario in Colombia, published an article on the state of research on management in Latin America. He found out that, besides bibliometric publications, there is very few studies conducted on this topic.
Not only does the world scarcely know who the Latin American man is, the world has barely cared.Georgia Anne Geyer, US journalist
In the book Management in Latin America: Threats and Opportunities in the Globalized World (2011), Paulo Roberto Feldmann, founder of the Centro de Estudos Sociedade e Tecnologia of São Paulo, exposed the fact that only 12 Latin American companies were part of the world’s top 500. His research further investigated why such a resourceful region produced so little unicorns, and raised the question “Is there a Latin American way to manage a company?”
A different type of corporate governance
Paulo Roberto Feldmann found that many Latin American companies mixed the administrative and the executive. Very often, the same persons within a company concentrate all the decision-making powers, and very often, those persons are members of the same families. To diversify their financial power, they usually create personnel firms that supply to the main group.
This development model is legal, but its large-scale practice in Latin American countries creates two main issues: It makes grassroots entrepreneurship much more difficult as all sectors of the economy are occupied by a few groups through diversification tricks, and it weakens the top companies’ performance by diluting their capital, which feeds the economic instability of the region. Business leaders usually prefer political influence over market competition. But when the economy goes wrong, the government’s policies are systematically scapegoated, leaving very little room for criticism of the management style of the region’s major companies.
One sees in Latin America, and also elsewhere, among many Catholics a certain schizophrenia between individual and public morality.Pope Benedict XVI
In the book Managing Human Resources in Latin America (Anabella Dávila and Marta M. Elvira, 2005), the authors refer to Latin American companies as being family-driven. The head of a company usually feels a social expectation to protect his/her employees and their families. Collectivism is strong in Latin American cultures, and social groups find confidence in cooperating as family members. Recruitment and personnel management reflects this cultural trait. Latin American companies believe that hiring family members increases trust and loyalty among employees.
This family-driven management style has its downsides when it comes to pushing new management processes within the company. Very often, the group will adopt a protective attitude and refuse new management models. This often leads to neglected training programs and a gap between employees and their managers. The matter of the salary is contradictory as favoritism often leads to rejection, but top-level high pays and rewards are respected, as more value is placed on the centralization of authority. But any honor, small or large, needs to involve some form of ceremonial recognition to feel as such.
Portrait of a Latin American IT company
This cultural portrait of Latin America may dazzle some managers in the USA, but for Latin Americans, this is just… normal. In Mexico, the midsize pan-American company Blue Trail Software exemplifies how Latin American management works. Based in Tepatitlan de Morelos in the state of Jalisco, Blue Trail Software provides IT development services with a business development arm in the United States, and a production body In Mexico, Argentina and Uruguay. Blue Trail Software knows all about the North-meets-South management issue.
Mexico is becoming the northern part of Latin America, not the USA’s Southern outpost.Jeremy Corbyn, UK politician
Blue Trail Software is Mexico-centric, and prefers the country’s midsize towns to develop its presence. Centralizing operations in Mexico is key as US clients expect their development partners to be as close as possible, economically, geographically and culturally. Yet the production happens between Mexico and the company’s other production units in Argentina and Uruguay. Blue Trail Software embeds a wide diversity of Latin American cultures.
Being away from major Mexican Metropolitan areas creates a more authentic experience for the tech workers looking to preserve their traditional lifestyle, avoid the anonymity of large westernized cities, or simply stay close to their relatives. Inside the offices, a startup-like atmosphere reminiscent of the Silicon Valley vibe rules over the interior design: Resting room, video game room, pool table, sodas and healthy drinks in the fridge, company lunches and regular after-work parties to relax. The office is vast enough to run a scooter contest, and the roof was remodeled as a chill area. «We don’t make rules, we create values» says Rosalba Reynoso, CEO of Blue Trail Software.
Cultural diversity lies in the DNA of the company. The two co-founders are a French-Mexican couple. Both US citizens, they met in San Francisco where they created Blue Trail Software. He develops the business, she handles operations. To even out their power within the company, they appointed a board of independent directors to oversee all operations. This third-party ruling entity breaks the absolutism of the co-founders’ powers, making it an hybrid type of corporate governance that mixes a traditional model (parent-like management structure) with a more modern one (independent ruling committee).
Both co-founders seek to empower their human resources assets (i.e. employees) to create an energetic company. With its offshoring business model, the company offers both competitive prices to its clients and competitive salaries to its employees. Performance is rewarded with increased responsibilities and salary promotions, but the company refuses to apply a strong hierarchic system, pursuing a more linear approach to management and democracy in general.
I have to do the best I can in my own work to represent my culture, represent the women of Latin America. What we stand for. What we’re made of.Shakira, Colombian singer
30% of Blue Trail Software’s employees are women. Rosalba Reynoso, the CEO, would like to increase that ratio as the company grows. In Latin American cultures, women very often play a central role in maintaining the social fabric of the community. Blue Trail Software seeks to replicate this dynamic within its management to recreate a more authentic Latin American social life within its offices. The co-founders believe in the rising power of Latin American cultures, and that is the true secret of a company with a successful Latin American management style.