strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
(originally published by Booz & Company)


Pitting Latin Multinationals against Established Giants

Such steps are essential because most multilatinas — 85 percent of companies in one of our studies — provide their international operations with only the minimum of independence. Their ambivalence is clear. “Our main challenge is to speed up the international expansion, and we will be able to achieve this only by delegating more to the field,” said one CEO. “But I am not sure I want to give [country managers] more authority.”

Why this reluctance to empower? Many companies have enjoyed success with the centralized management style of an owner or CEO. This leader is often reluctant to share power or may simply enjoy playing a direct role in day-to-day operations. A disinclination to delegate is also often exacerbated by the company’s limited experience with new businesses or geographies and by a shortage of managers with the necessary skills and consistent track records to lead international businesses. In addition, due to immature processes and systems, most multilatinas lack the minimum control mechanisms needed to manage decentralization. These factors tend to lead to inconsistent relations between headquarters and the field. Periods of delegation are often followed by periods of strong central control, especially when results fail to meet expectations.

The path to internationalization for multilatinas is demanding, often forcing them to fight in unfamiliar environments. But if they truly learn to master the complexities of governance, multilatinas will win access to capital to sustain expansion and at the same time increase their ability to navigate the myriad obstacles that stand in the way of their success.

Author Profiles:

Paolo Pigorini is a partner with Booz & Company based in Rio de Janeiro. He specializes in major transformation and reorganization services, including change management, business models, and organizational design.
Arthur Ramos is a partner with Booz & Company based in Sao Paulo. He works with companies in the energy sector on merger strategy and integration, regulation, governance, and organization.
Ivan de Souza is a senior partner with Booz & Company, a former member of the firm’s board of directors, and head of the firm for south Latin America. He is based in Sao Paulo, where he specializes in strategy, marketing, and organization services for financial institutions and conglomerates.
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store



  1. Letícia Costa, Paolo Pigorini, Arthur Ramos, and Ivan de Souza, “Setting Out to Conquer the World: Business Model Challenges and Lessons Learned in the Internationalization of Latin American Companies” (PDF), Booz & Company white paper, December 2007: The article on which this piece is based goes into challenges beyond governance.
  2. Charles Davidson and Stephen Kay, “Latin Multinationals Become Global Headliners,” EconSouth, vol. 9, no. 3, Third Quarter 2007: A look at Latin companies in the context of all emerging market multinationals.
  3. Ivan de Souza, Paolo Pigorini, and Arthur Ramos, “Tailored to Fit: How Brazilian Companies Can Improve Their Governance Structure,” Booz & Company white paper, October 2008: An in-depth assessment of how every Brazilian company can devise a governance structure suited to its circumstances.
  4. Clifford Krauss, “Latin American Companies Make Big U.S. Gains,” New York Times, May 2, 2007: A look at the strategies of multilatinas in the American market. 
  5. Alonso Martinez, Ivan de Souza, and Francis Liu, “Multinationals vs. Multilatinas: Latin America’s Great Race,” s+b, Fall 2003: One of the first examinations of the subject.
  6. Javier Santiso, “The Emergence of Latin Multinationals” (PDF), Organisation for Economic Co-operation and Development Emerging Markets Network Working Paper, April 2007: Explores the impact of Spanish companies on the emergence of Latin American counterparts.
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.