BRICs

Gerdau’s Men of Steel: A Unique Case of Leadership Development in Brazil

Joao Paulo Bittencourt, Silvia Pereira de Castro Casa Nova, and Edgard Cornacchione

Introduction

The main goal of this chapter is to analyze the leadership development phenomenon in Brazil, a country facing historic challenges, including workforce qualification, low basic education levels, significant social inequality and infrastructure issues. We discuss the possibilities and challenges in leadership development based on the case of Gerdau, a Brazilian company that operates since 1901, considering internal organizational dimensions as well as external influences. Gerdau is the leading company in the long steel market. Internally, the company has developed, across many years, strategies, policies and practices that emphasize autonomy and self-management, experiencing potentialities and shortcomings associated with external influences and with traits of its own culture.

The keyword to understanding Brazil is diversity, in its many dimensions: human diversity, geographic diversity and cultural diversity. The human dimension is a product of the historical fusion of ethnical matrices as diverse as Portuguese, African and native Brazilian, enriched by

J.P. Bittencourt (*) • S.P. de Castro Casa Nova • E. Cornacchione University of Sao Paulo, Sao Paulo, Brazil

© The Author(s) 2017

A. Ardichvili, K. Dirani (eds.), Leadership Development in Emerging Market Economies, DOI 10.1057/978-1-137-58003-0_2

migratory waves from different countries and continents. Geographically, these groups were distributed differently among the country’s various regions which, in turn, have different climatic, ecological and physical traits, consisting of different biomes. These processes, acting together, resulted in unique socioeconomic developments in each region. One can say, therefore, that there is no single Brazil, but several “Brazils.”

The official language is Portuguese or Brazilian Portuguese, slightly different from the Portuguese spoken in Portugal, a country with which Brazil shares historical roots from the colonial period. This is one of the factors that distinguishes it from its neighbors in Latin America, mostly countries colonized by Spain and whose official language is Spanish. Brazil borders with all other countries in South America with the exception of Chile and Ecuador (Renato Ferreira Leitao Azevedo, Ardichvili, Casa Nova, & Cornacchione, 2016).

The Brazilian territory spans over 8,515,767 square kilometers, being the fifth largest country in the world. The country is divided into five geographic regions: North, Northeast, Central-West, Southeast and South. Its population of 205 million inhabitants (IBGE, 2016a) is distributed unevenly between densely populated areas (e.g., South and Southeast) and “population voids” such as the North region, covered by the Amazon rainforest (IBGE, 2016b; Portal Brasil—Meio Ambiente, 2016).

Brazil’s economy is also very diverse. Brazil has a strong primary sector: Its agricultural output is the fifth highest in the world, being the main producer of many commodities such as sugar cane, coffee, oranges, meat and so on. Brazil has an equally strong secondary sector, its diverse industries ranging from automobiles, steel and petrochemicals to computers, aircrafts and consumer durables. Brazil has also a strong tertiary sector: According to the CIA World Factbook (2014), it occupies the eighth position on the list of the largest countries by tertiary output, comprising the so-called service and commerce sectors, including energy, telecommunication, finance, healthcare, education and technology. This sector in Brazil is characterized by being heterogeneous, dynamic and knowledge intensive, although with significant elements of informality (De Negri & Kubota, 2006).

However, despite its natural wealth and diversity, there are still many hurdles in the path of Brazil’s social and economic development. One particular challenge is structuring an educational system capable of offering a high-quality education that the country requires to achieve its social and economic development goals. This human capital gap has led companies to invest in workforce qualification. However, there are achievements to celebrate: Illiteracy rates have shown a declining tendency during the period 2007-2014, followed by a growth in school enrollment rate in the 6-14 years old age group. Additionally, for the same period, according to the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatfstica—IBGE) the educational attainment has grown among those 25 years or older. For example, the group of population with at least 11 years of schooling has grown from 33.6 percent in 2007 to 42.5 percent in 2014 (IBGE, 2016c).

Taking this context into account, the main goal of this chapter is to analyze the leadership development phenomenon in Brazil, a country facing historic challenges, including workforce qualification, low basic education levels, significant social inequality and infrastructure issues. We aim to discuss the possibilities and challenges in leadership development based on the case of Gerdau, a Brazilian company that operates since 1901, considering internal organizational dimensions as well as external elements.

Internally, the company has developed, across many years, strategies, policies and practices that emphasize autonomy and self-management, experiencing potentialities and shortcomings associated with external influences (i.e., regional differences, cultural diversity, deteriorating public education) and with traits of its own culture which gives prominence to both participatory management (Coutinho & Kallas, 2005) and working cells. The case study adopts a configurational perspective (Martin-Alcazar, Romero-Fernandez, & Sanchez-Gardey, 2005) with respect to leadership development policies and practices, in which the interaction between social capital and human capital becomes more important than any other isolated practice in the development of leaders (Cullen & Yammarino, 2014; Day, 2000). The configurational perspective affords a unique take on educational activities as well as aspects related to career, values, performance assessment, communication and other relevant issues that could emerge.

In this chapter, we work toward contemplating the complexity involved in the interrelations of the factors that influenced the development of leadership in the company, based on company documentation (e.g., business presentations and emails) and in managers’ narratives. We interviewed six managers who were directly involved in two organizational culture change projects. Both projects were connected to leadership development. The interviews were conducted, recorded, transcribed and analyzed in two stages: Analysis of data was performed independently by two of the authors and authors’ notes were compared to develop common interpretations of emerging meanings. As demanded by the company representatives, we kept the interviewees’ anonymity, coding their answers as Manager 1-6.

 
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