This volume is based on empirical study of managerial attitudes in a number of Latin American countries. Albert Lauterbach interviewed some 400 persons (including 324 managers) to get “a cross section of managers from a great variety of industrial, commercial, and financial enterprises” (xiv). He collected much of the material during a Brookings Research Professorship (1962-1963).
Lauterbach argues that similarities between Latin American and Western European or North American management are superficial. He cites the strong agrarian basis of business in most Latin American countries, the Indian heritage in some, and the central position of the extended family in all. The typical Latin American enterprise emerges as “a family-rooted power structure.” “Without the top man’s political links and family standing,” the author holds, “little could be achieved in the conduct of any of these firms, and informal conversations with friends or influential people take up a very substantial part of the top man’s activity” (pp. 8-9).
In sharp contrast to the typical U.S. manager, his Latin American counterpart fails to perceive that high productivity must be achieved largely through his own efforts and skills. Nor does the typical Latin American manager think of a real capital outlay in terms of economic risk. “When there is risk there will be no new investment” (p. 76). The political risk factor, however, looms importantly in managerial decision-making. Frequent change of ministers and the extreme possibility of social revolution suggest that “one must make profit promptly while one’s friends are still in government” (p. 159).
Many of us are familiar with the Schumpeterian model in which the innovating entrepreneur is cast in the role of active agent in the development process. Lauterbach’s findings indicate that Latin American managers view economic development as “something for which ‘they’—the Government, the development planners, perhaps the foreign aid agencies or objective changes in the world markets were responsible, not ‘we’ in the sense of enterprise managers as individuals or as a group” (p. 84). It is not surprising, therefore, that most Latin American managers regarded infrastructure investments and development planning of “a guiding and coordinating type” as “legitimate, perhaps indispensable, activities of the state” (p. 115).
The author points briefly to the “substantial quantitative and qualitative share” of first- or second-generation immigrants in the Latin American managerial class, a line of discussion which, I believe, could have been elaborated with profit. For example, are there substantive differences in managerial attitudes between the “foreign” and indigenous groups?
I find the last section (“Policy Implications for the United States”) of his concluding chapter less than compelling. U. S. assistance to Latin America, with all of its drawbacks, cannot be legitimately characterized as an “entering wedge for a huge flow of foreign capital in search of easy profits” (p. 194). My own studies of foreign investment in Latin America persuade me that profits have not been easy, and that it will take more than a U. S. government wedge to bring about a large flow of private capital to the area. The author’s prescription for future U. S. direct investment in Latin America (given in the light of the attitudes of Latin American enterprise managers) would effectively cut off that vital source of capital and technology. And without direct foreign investment (over a third of Latin America’s industrial and mining output is attributable to U. S. subsidiaries) the development process would lose its momentum. Whatever Latin Americans may think of direct foreign investments, I would argue that necessity is no less important than attitudes (including those of business managers) in shaping future economic behavior and policies.
On the whole, this is a good book which should interest both behaviorally oriented Latin Americanists and students of international business.
