Opportunities and Resources in Latin America
Chapter 3: The Influence of Culture on Governance, Innovativeness and Knowledge Generation in Brazilian Family Businesses
Adriane Vieira, José Antônio de Sousa Neto and Maria Teresa Roscoe INTRODUCTION Family business management sparks great interest among scholars and researchers, mainly due to the complexity of the succession and professionalization processes involving family business leaders. Another reason is the importance of these companies for economies worldwide. According to Scheffer (1995: 80), family businesses account for approximately 90 per cent of all private companies in Brazil, and they are responsible for twothirds of all jobs. One of the strategies for survival and continuity is innovativeness, understood in this chapter as a process of seeking, discovering, experimenting, developing, imitating and adopting new products, processes and services that will lead to profits (Nonaka et al., 2003). This process in family companies is, however, usually conducted very carefully, because few of them will run risks in exchange for short-term gains when they perceive that such an action can become a blot on their reputation. For example, in associating their names with inferior or defective products they can affect their family members’ own identities (De Vries, 2003). The issue of innovativeness in Brazilian society has its own peculiar features as it is associated with a core cultural trait called ‘flexibility’. According to Barros (1996), flexibility is the modern version of the process known as ‘the creole way’, that is, the way things are done as the result of a long process of adaptation to local circumstances. The disadvantage of flexibility is a tendency to excessive self-confidence, which reinforces a lack of planning,...