Brazil gives multinationals a chance to polish their image
Sao Paulo, Brazil
A German chemicals manufacturer gives microscopes to Brazilian public schools and runs TV ads to get children to form science clubs. Coca-Cola prints magazine ads to tell people it has confidence in the country and is investing money here.Skip to next paragraph
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As Brazil's three-year-old civilian government tries to cross the rocky ground to a functioning democracy, the changes are already making a difference for the multinational companies here.
``In a democratic environment, a company begins to understand that if it relates to the surrounding community, it will have allies. If not, it won't have allies,'' says Nemercio Nogueira, corporate affairs director at a leading Brazilian machinery manufacturer, and author of a new book on democracy and corporate communication.
During Brazil's 21-year military dictatorship that ended in 1985, foreign companies from the United States and elsewhere were often forced to keep a low profile. For one thing, the nationalist military used slogans such as ``The petroleum is ours,'' and kept multinationals out of the infant computer industry. Meanwhile, many universities taught students that foreign companies were in Brazil only to exploit its natural resources and cheap labor, barring the way to lasting economic development.
Real decisionmaking, however, centered on the president and his handpicked ministers. In a business crisis, all an executive needed was to know the right man at the right government ministry.
But the new Constitution, promulgated Oct. 5, decentralizes government, protects individual and civil rights, safeguards the environment, and outlaws censorship. These changes have shaken up the relationships among government, business, workers, and consumers.
Meanwhile, business is gradually being seen as less of a villain. ``Profit today is a synonym for sin in Brazil, but the need to survive in a more competitive world is changing this,'' says Agostinho Gaspar, director superintendent of AAB, the public relations arm of the advertising agency Standard, Ogilvy & Mather Publicidade.
Businessmen in Brazil began waking up when their Congress started drafting the new Constitution, in March 1987. As the representatives' bias against business, especially foreign business, became evident, foreign companies began to act.
They paid for research on their contributions to the economy, sent videotape documentaries to congressmen, and ran aggressive ad campaigns. But they found that the congressmen's ideas weren't easy to change.
``We began to organize ourselves very late,'' says Antonio Teixeira da Silva, coordinator of the New Group of Brazilian Companies of Foreign Capital, part of FIESP, the Sao Paulo State Industrial Federation. But ``today's businessman, aside from working to make profits and to develop the country, should pay attention to politics and participate in politics,'' he says. Mr. Teixeira da Silva is also vice-president for corporate affairs of Philip Morris marketing in Brazil.
Congress, apparently, did not buy the business pitch. It eventually restricted mining to local companies, prohibited foreign oil exploration, and left room for new limits on foreigners' access to public funding and incentive programs.
The multinationals ``concentrated too much on the congressmen's offices,'' says Marco Antonio Rocha, a business journalist who runs executive seminars on dealing with the press. ``They made people think they were bribing officials. They should have spoken directly to the public, so the public would pressure congress. The TV [ads] were too late.''
With a review of the Constitution due in 1993, the lesson has quickly been taken to heart. Members of the local US Chamber of Commerce are already planning events to include union leaders, professors, congressmen, church officials, and students. And both foreign and Brazilian businesses are talking to the public through the press.
One company that has been at the heart of this change is IBM do Brasil, which would like to sell more computers than the government now allows foreign companies. Last year, IBM invited 400 journalists to attend a three-day seminar on journalism, with speakers from France's Le Monde, Spain's ``El Pa'is, USA Today, Columbia University, and Business Week, among others. The company got more press coverage than it expected from the seminar, and is now interviewing 300 journalists on ways to improve its corporate image.
Coca-Cola Brasil also got on the bandwagon, after surveys of opinion leaders and government officials done last year showed it was time to get our message across specifically to them, says Raymond De Lagrave, vice-president and general director of the local soft drink division. This year, Coke began a planned two-year ad campaign highlighting its commitment to Brazil, in the form of a $500 million, three-year investment program.
Hoechst, the West German chemicals maker, was an early bird. Eight years ago, the company began a book distribution program. In 1986, the company began equipping 700 schools with microscope kits and training teachers to use them with students. This year, the project sparked the creation of 1,300 science clubs and more than 3,000 letters from children.
``When we speak with government officials, politicians - our target audience - we try to emphasize that a company is not only a productive, commercial entity,'' says Hoechst do Brasil president Claudio Sonder. ``It's an entity that has to make a contribution [to society].''