Doing bussiness in Brazil

Abstract

Brazil has had one of the worst records of hyperinflation in Latin America, with rates reaching 5,500 percent in 1994. Yet the author contends that, despite sharp price fluctuations from one day to the next, a company can learn to manage hyperinflation through flexibility and a willingness to adapt and reinvent. McCann-Erickson, the advertising agency that formed the original nucleus of what is now the Interpublic Group of Companies, found it had to abandon conventional planning during the worst periods in order to focus on how best to juggle cash resources on a week-to-week, or even day-to-day, basis.

Brazil has weathered such storms by maintaining a relative openness to “the commercial imperative.” Communications has remained relatively unfettered by government regulation in Brazil, and Brazilian television has always been strictly commercial. Recently Brazil has encouraged foreign investment by the lowering of prohibitive tariffs and the privatization of many state-run companies.