Brazil adheres to global productive restructuring

In the early 1990s, factors linked to the international and the domestic environments gave rise to a highly turbulent period in Brazil. On the political front, a series of scandals led to the impeachment of the elected president. On the economic front, inflation spiraled out of control, reaching more than 2,000 percent a year after a disastrous attempt to freeze it through the confiscation of savings. Furthermore, subsidies were slashed abruptly while tariff and non-tariff barriers were reduced, thus opening the domestic market to international competition. The presence of foreign subsidiaries increased significantly and importing became far easier.

Therefore, the period of productive restructuring in Brazil was particularly complex and exceptionally demanding for all corporations. Traditional industrial groups and leading firms disappeared. Important state-owned enterprises were fully privatized. Nevertheless, the competitive environment thus instated generated a selection process that revealed which Brazilian enterprises could develop the competences needed to survive and prosper and which could not. This was the setting in which the internationalization of Brazilian firms grew and became solid.

This chapter first describes the context of productive restructuring in the 1990–2008 period, to highlight how the selection process also laid the cornerstone of a sort of Brazilian management model. This is followed by a section on the resurgence of the movement of Brazilian firms toward foreign countries, starting with Mercosur. Then a panoramic view of Brazilian multinational enterprises (MNEs) is presented.