Cultural Analysis of Chile

Cultural Analysis of Chile

Cultural Analysis

Executive Summary:

Chile is one of the most economically and politically stable country in Latin America. It is also the most developed and globalized amongst its neighboring South American countries. Chile has enjoyed a strong democracy similar to the one in the United States for the past twenty one years. The economy has also flourished since the 1980’s establishment of free market which has doubled the amount of the middle and upper middle class. Education is an intricate part of Chilean society so most parents tend to splurge on it this has impacted Chile’s literacy rate to reach an outstanding 99%. The majority of Chileans are Roman Catholic causing the church to have a definite influence on society and politics, although it has been slowly shifting away in the past 15 years. Approximately 60% of Chileans live in the metropolitan region of Santiago which heavily effected by smog therefore there is a growing concern for the environment. Chilean art varies from literature to performing arts but the country is very proud of their literary Nobel Peace and Pulitzer Prize winners, Gabriela Mistral and Pablo Neruda. Although most Chileans are Mestizos by definition they do not identify with the term and 90% self-identify as white. Chileans enjoy cooking and food and celebrate most holidays with traditional cuisine. There traditional foods a usually include some type of meat. Although the western side of Chile is bordered by the Pacific Ocean most of the seafood is exported to other countries therefore Chileans usually enjoy poultry and beef for economic reasons. Contrary to the name Chileans do not use much spices rather they use vegetables and herbs to season their food. Chileans tend to have about four meals a day, lunch being the most important and the heaviest. Breakfast and dinner are usually light. Dinner is usually enjoyed late in the evenings so much Chilean households enjoy tea time around six in the evening locally known as Once (On-say). Housing in Chile can vary by city. An alternative to buying a house Chileans have the option of purchasing or renting anapartment also known as a flat which is provided both furnished or unfurnished. It is fairly common to rent a room in a house; this is mainly done by foreigners as it also helps them get acquainted with the culture and city. It is very important that women dress appropriately in the work place, dresses and suits are the norm. Soccer or as located known as futbol is the most important sport is Chile with tennis as a close second. Swimming and skiing are also popular sports. Due to the lack of public swimming pools, private clubs are able to charge a high fee for the use of their pools. Social security is privatized forcing the workers to pay about 10% of their salary. Chileans have the option for public or private healthcare. Everyone is treated regardless of socioeconomic status. Private health care cost more but medical treatment is at a higher level. The Official Language of Chile is Spanish but many native and regional dialects are spoken. Some of the dialects spoken are: Mapudungun, Aymara, Rapa Nui, and Huilliche which are still relevant in the mountain areas. English and German are also spoken by some Chileans.

Introduction:

Whole Foods Market (Whole Foods) started their business in Austin, Texas in the 1980’s. Almost thirty years later they are the leading organic and natural grocery chain in North America and United Kingdom with over 300 stores. Whole Foods Market an American multinational company is analyzing the opportunity of expanding their market into Latin America. Since Whole Foods is dedicated in bringing the best organic and locally grown products to its customer it needs to choose a location that is rich in agricultural and cattle goods. To ensure quality products Whole Foods demands a high standard from their vendors and products resulting in relatively higher prices than their standard supermarket counterparts(About Whole Foods). Another quality that Whole Foods requires of their market is people who are health and environment oriented because they are willing to invest on higher quality products. Whole Foods is examining Chile as the first Latin American country in which to expand because it is considered the most developed country in South America. Over 70% of Chileans are considered middle class or above and they over 80% live in urbanized areas. Education and health are very important for Chileans and they spend a large percentage of their disposable income in attaining these goals. Furthermore, Chile has excellent human resource due to the quantity of college educated individuals which would cut expat costs. Chile also has favorable business and corporate tax laws for investors. Agriculture and cattle play a big part of Chile’s natural resources therefore Whole Foods can find local vendors to supply the grocery products. Chile also has several free trade agreements with countries all over the world which can simplify the importing or exporting of certain non-food related items that are needed or sold in the stores. Due to the urbanized structure of Whole Foods the analysis is based on Santiago, Chile which is home for 60% of the country’s population. The following analysis will further explore the cultural, economic and market in Chile to make an executive decision whether Whole Foods will expand into the country.

History:

Presently Chile is considered one of the most politically, economically and socially stable Latin-American countries but the growth started after a long running political struggle between liberals and conservatives during most of the twentieth century. Until September 11th, 1973 Chile was governed for three years by Salvador Allende a Socialist-Marxist president who was promoting the Marxist ideology across Latin America (CIA). In 1973 the Chilean military along with exterior forces organized a coup d’état against Allende and the established government. Although the new government was headed by four leaders in each sector of the Chilean military,Agusto Pinochet the army general took over as the leader of the country with the other three leaders serving as counsels. Pinochet dictated the country for seventeen years, until 1990, when Patricio Alywin was freely elected into office (CIA).Pinochet was later indicted by Spain and later Chile for the violation of human rights, it is estimated that his regime tortured over 29,000 people and killed over 3,000 during the transition of power (Matear). Chile’s economy started growing steadily in the 1980’s with a movement into free market economy which resulted in the reduction of the country’s poverty rate by half (CIA). The country’s GDP grew at a 6.4% between 1983 and 1990 which was largely due to exports into North America(Countries and their culture -Chile). During the new millennium Chile signed several free trade agreements with Europe, China and the United States to continue economic growth. In 2006 Chile broke social norm by electing a divorced, agnostic, socialist woman president, Michele Bachelet. Predictably after the conservative strict ruling of Pinochet the country opted for a more liberal government therefore electing center-left political parties for twenties years but the pendulum has moved to the opposite direction with the election of the millionaire right-wing candidate Sebastian Piñera. On February 27, 2010 Chile underwent an earthquake with a magnitude of 8.8 in the Richter scale which was felt throughout of six out of Chile’s fifteen regions (Science Highlights 2010 – UNAVCO Event Response – Mw=8.8 Chile Earthquake Feb. 27, 2010 ). The country was given international aid for recovery but was given praised internationally for a quick recovery considering the magnitude of the earthquake.

Geographical Setting:

Chile is located in South America and it is one of two countries (Ecuador) who does not share a border with Brazil. It is a long narrow stretch of land located between the Pacific Ocean and the Andes mountains; besides the continental land mass Chile also has several islands off the Pacific coast which includes Easter Island. Due to the distinct ribbon like shape of land Chile is impacted by three types of climates: dry, mediterranean and damp (CIA). The northern region of Chile is characterized as a desert for being extremely dry but nonetheless the temperature is cool; the Atacama Desert is located in this area and it is known for being one of the direst regions of the world (CIA). The central part of the country and the most resided areahas a Mediterranean climate that can be described as having mild winters and cool summers. The southernmost part of Chile is extremely rainy and cold. The topography of the Chile can also be divided into three main sections; according to the CIA World Factbook they include: low coastal mountains, fertile central valley, and rugged Andes in the east which divides the border with Argentina (CIA). Chile is divided into fifteen regions; Metropolitan Region of Santiago is the most populated with 6,061,185 residents(Regions of Chile, 2010).

Social Institutions:

The sense of nuclear and extended families tends to blend in Chile into one family unit. It is customary for newlyweds to live with their in-laws while they save enough money to buy their own home. Although couples set up their own family units within their own households it is expected to keep close ties with extended families such as grandparents, uncles and cousins. The extended family serves as a support system whenever the nuclear family cannot respond by providing assistance (Congress). It is also customary for close family friends to become part of the extended family unit, this is evident in young children calling their parents friends “tío” or “tía” meaning aunt or uncle. Approximately 90% of individuals live with their families while the remaining live alone, indicating how important the family unit is in Chile (Countries and their culture -Chile).

Going with tradition the man is the head of most households except in single-parent households which is more common in lower-income families. Childcare is usually the mother’s role in Chilean society with the father playing more of a supportive and economic role. In most upper-middle class and high class families the mother has a helper which allows her to branch out professionally or within high society. Children tend to become independent later in life and will not leave the family home until they are married and it’s considered normal for the parents to be involved in their children’s at all times; most children who live away from home talk to their parents on a daily basis (Countries and their culture -Chile).

Courtship in Chile is similar to its Latin American counterparts where the male is expected to ask the father permission to go out with his daughter but the norms are becoming more liberal as time progresses. Most Chileans marry during their twenties and they tend to marry people within their same socioeconomic and educational background because social castes are still relevant in Chile. Chileans first have a civil ceremony and then at a later time will seal their vows with a church wedding. Due to the Roman Catholic Church’s influence divorce was not part of the legal system until 2005; the last country in the western hemisphere to legalize it (Divorce Ties Chile in Knots, 2005). Prior to the legalization of divorce couples had their marriage annulled or simply separated without remarrying.

Historically Chile has been in the forefront of feminism in comparison to its Latin American counterparts which is evident in education, “The University of Chile graduated Latin America’s first female lawyers and physicians in the 1880s” (Congress). Although there is strong consensus from both genders that women should work even if it’s not economically necessary there is still a strong notion that a woman can only self-actualize through motherhood (Congress).

Education is an important factor for most Chileans regardless of socioeconomic class and parents see education as an investment for their children. The education system in Chile is was based on 19th century French and Germans model where the primary (grades 1-8) were free and compulsory while the latter four years of secondary were optional. Vocational school is an alternative to high school education known as secondary education. In 2003, Chilean passed a legislation guaranteeing free education for all twelve years. Private schools are led by religious or cultural groups such as French or Italian and usually serve the more affluent families (Chile-Education). Approximately half of Chileans attend private school either in primary or secondary grades while (Education, 2005).

The Chilean government is interested in producing a human resource pool therefore they have increased the education budget to 18.7%. Chile has over sixty universities throughout the country, more than nine times the amount they had in eighties. The University of Chile is one of the highest respected universities in Latin-American. Approximately 19% of Chileans enroll in higher education in Chile (Countries and their culture -Chile).

According to the CIA World Factbook Chile’s 2002 census indicated a literacy rate of 95.7% although other sources indicate that it is currently closer to 99% for individuals between 15-24 years of age (CIA).

The political structure of Chile is described as democratic republic with the elected president as the head of state. The current president is Sebastian Piñera came into power on March 11, 2010 and he is both the chief of state and the head of government. The president is elected by popular vote for a single four year-term. Much like the American legislative system Chile’s National Congress is divided into two parties the Senate that elects 38 seats by popular vote and the Chamber of Deputies that elects 120 members via popular vote. In the judicial brands the judges are appointed by the president and are ratified by the legislative branch (CIA).

Chile’s major political parties are divided into two sectors, center-left known as the Concentration and center-right known as the Alliance for Chile. The Concentration party includes: the Christian Democrat Party, the Socialist Party, the Party for Democracy, and the Radical Social Democratic Party. The Alliance party includes: The National Renewal Party and Independent Democratic Union. The center left party controlled the politics for over twenty years until the election of center-right Piñera who was a part of the Independent Democratic Union, as customary he declared himself as independent while president-elect in order to govern fairly (Background Note: Chile, 2011).

Chile’s government is considered one of the most stable one in Latin America. A constitution was established in 1980 and although amended several times it has been withheld by different political parties. Democratic elections started in 1990 and have held strong for twenty one years.

The taxes in Chile are amongst the lowest for corporate companies; it is 17% one of the lowest in Latin America. The business tax is the lowest of Latin America and individuals pay a progressive tax of 0-40%. Additionally Chile has a free trade agreement with 19 other countries that include the United States, Brazil and many European countries (Low Corporate Tax).

The role of government in Chile is similar to that of the United States with the three branches of government serving as a checks and balance. Chile’s judiciary system is based on Spanish Law or Common Law and it includes a supreme court, appeal court, military courts and constitutional tribunes. In 2005, Chile changed their criminal justice system to an adversarial system similar to the United States (CIA).

To protect investors Chile is a participant in the World Intellectual Property Organization (WIPO) which protects patents, trademarks and other conventions.

Social classes are prevalent in Chilean society due to the colonial influences but the free market system has impacted a tremendous growth of the middle class. The social classes are divided up into three main categories: upper, middle and lower. The upper class is made up of aristocrats or “old money” and some self-made millionaire’s investors in manufacturing or industrialization. The middle class is made of professionals and intellects; they split the political vote because of the diversity of the group although 89% live in urbanized areas(Chile- Language, Culture, Customs, and Etiquette). The lower class was the main supporters of Allende’s socialist government and suffered the most when the military regime took over in 1973. Since class status is important most people always dress up since it’s the way that people measure each other up to assess their social status.

Organizations are very common of the Chilean lifestyle and it ranges from local community mother organizations to larger once based on common interests. Sports is a large part of the Chilean society’s culture that transcends socioeconomic status therefore each community will have sport clubs that focus in soccer and tennis.

Although the majority of the country is mestizo, or European (predominantly Spaniard) mixed with Indigenous most people categorize themselves as white. Chileans do not us mestizo as part of and identification label. Chileans are a homogenous group with little differentiation in race therefore historically there has never been much an issue aside from the discrimination against full blooded Mapuches (Amerindians). Large immigration into Chile due to economic growth from Cuba, Brazil and Asia has brought some “new blood” in the last 5-10 years and Chileans are experience a difference without precedents. Currently the demographic is broken up into: white 95%, Amerindian 3% and other 2% (Chile- Language, Culture, Customs, and Etiquette). Another important factor that sets Chileans apart from their neighbor is that they identify themselves as Chilean regardless of their ancestry. This is evident in the past presidents that have had last names like Bachelet and Frei; they rather not discuss the genealogy and only focus as being Chileans.

Chileans usually conduct themselves in a formal manner in public or in business situations therefore business formal attire is always expected; even to go to the bank for a transaction. The use of the formal you, “usted” are mandatory in all business manners and with wait staff in a restaurant. A firm handshake is proper business etiquette amongstmen; women are expected to give a kiss to either sex on the right cheek. First names are only okay amongst friends otherwise mister or misses is a proper title. Chilean business is built on trust and relationships therefore initial meetings should be spent on getting to know one another beyond the business side. Confrontations are not common amongst Chilean they consider it to be rude and of little taste (Chile- Language, Culture, Customs, and Etiquette).

Religion and Aesthetics:

The 2002 Chilean census illustrated that almost 90% of the country identified as Christian while the majority (70%) is Roman Catholic. The Roman Catholic Church has influenced social and political life enormously in Chile more so than any other Latin American country. Chile was the last country in the western hemisphere to legalize divorce due to the influence of the Roman Catholic Church. Furthermore, abortion is still illegal due to the church’s influence. The act of not practicing a religion by either identifying as atheist or agnostic has become more common and socially accepted the last twenty years. The first woman president, Michele Bachelet self-identified as agnostic. Most holidays celebrated in Chile have a religious background including the celebration of saints which is celebrated like a birthday for the individual. (Chile- Language, Culture, Customs, and Etiquette).

The fine arts are a significant part of Chilean culture having several literates such as Gabriela Mistral, Pablo Neruda and Isabel Allende known on a global level. Plastic arts became popular in the seventies and eighties with many Vanguard artists such as Roberto Matta and Eugenio Dittborn (Countries and their culture -Chile). The Chilean National Museum of Fine Arts in Santiago, Chile is the largest and oldest in South America.

Due to globalization and media Chileans enjoy music from all over the world, especially the United States. Music tastes range on different parts of the country but three major categories are popular, classical and folkloricmusic. Popular music includes anything from Caribbean sounds to rock which are adopted from neighboring countries. Classical music is popular amongst affluent families who send their children to conservatories to learn how to play the piano and other instruments. Folkloric music includes Mapuche and Rapanui (Eastern Island Polynesian natives) songs as well as country songs. The Cueca is the national song and dance Chileans which is a folkloric song and dance that derived from colonial times.

The most recognized national symbol is the Chilean flag; the meaning is taught across the country to students as young as four years old. The red symbolizes the blood shed for independence, the blue represents the sky and the white represents the snow covering the Andes Mountains. Another national symbol includes the copihue, the national flower and the national bird, Condor which is the.

Living Conditions

Chile is considered to be among the most developed and stable of the South American countries. Aside from the known air pollution, living conditions tend to be pretty comfortable. Chile has made great use of its natural resources becoming one of the leading exporters of fish and fresh fruit. Diet and Nutrition for the Chileans consist of meats and fruit consumption for the most part. Merco Press referenced an article where a study done by the Catholic University of Chile and the Banmedical Foundation found 62% of Chileans were having a “poor diet” and 29% an “unhealthy” diet. (Merco Press, Dec 2010)

The Office of Studies and Agrarian Policy (ODEPA) of the Ministry of Agriculture found that meat consumption was at 3% less chicken and pork. The consumption of poultry was at 34%, and pork was at 58%. The study stated that even though meat consumption was less that pork and poultry it was still 26% higher overall from 10 years ago at 179.3 lbs. per capita. (Merco Press, 2008). While not a lot of recent studies have been done in regards to vegetable consumption in Chile we did find that in 1997 a study found that neither men nor women consumed the recommended quantities of vegetables. (Olivares C., Sonia & Nelly Bustos Z., 2006)

Chileans typically eat four meals a day. For breakfast, bread with jelly or some sort of sweet topping is custom accompanied with tea or coffee. Lunch is considered the main meal of the day typically served around 1-3pm and common to be a heavy meal. Typical lunch meals include the following; Ensalada Chilena (Chilean Salad), Empanada, Humitas, Cazuela de ave, Parrillada. Chilean’s eat lots of meat, especially beef and chicken. Rice, potatoes, fresh fruit and vegetables are also part of their daily meal (Gestiones Interculturales). Chileans dishes should not be thought to be spicy as they don’t usually consume spicy dishes. Dinner is normally at 9pm and consists of a light meal similar to breakfast, bread and tea is the norm. A Traditional dessert is the Papaya con crema, which is preserved papaya with whipped cream or Kuchen, a German fruit flan.

Even though Fish is very abundant is not consumed as much as meat due to the pricings. It is worth mentioning that Chile has several vineyards, since Chile known to have one of the best wines. Malnutrition Rates for Chile are at 5% according to the IndexMundi study done in 2005. In regards to the availability of food products, vegetable were at a total of 2,473 tons meats were at 1,346 tons, fish at 4,990 tons, and fruit at 5,337 tons.

Housing

Housing in Chile can vary depending on if why you are moving to Chile. If you are a foreign person there on business or a student, a typical arrangement would be shared apartment/flats (furnish or unfurnished) or lodging at a Chilean family homes. If you’re a resident subsidized housing is available but you have to meet certain criteria and it is mainly geared towards low income and moderate income. There is a good mixture of both house owners and renters. Most People leave in one-single home dwellings.

Clothing

The Chilean are very particular about their clothing, fashion is a priority. The traditional Chilean Cowboy dress is the outfit of the “Huaso” consists of cowboy hat, pants, poncho or “chamantos”, flannel shirt and boots. The traditional dress for women consists of a flowered dress with an apron (Maps of world). Business attire for both men and women consist of formal wear. Men dress in dark color suits. Women are expected to dress in dresses and suits with low heels. Jewelry is kept to a minimum since Chileans feel that too much jewelry is presumptuous and self-centered.

Recreation, sports, and other leisure activities

Chileans have a variety of activities to choose from when it comes to leisure. For example the Chilean Rodeo, it was declared a sport since it has gained a lot of followers. Skiing and snowboarding are one of the main activities to do in Chile but you can only do so during the months of June through October. This activity can be costly according to Hoteltravel.com ski centers charge around $30 US daily fee, rental of equipment starts at $25 US each. For those who like practice swimming, Chile has a few private sports clubs with an indoor pool ideal for swimmers. Membership will cost about $50 US and a onetime fee of $75 US (Gestiones Interculturales). Unfortunately open swimming pools are rare in Chile. The national sport Chilean follow and practice is futbol (soccer), you tend to see children practicing the sport in any open field. Chilean’s have an interest for tennis and Horseracing. No other major sport like basketball and baseball is practice since there are no sponsorships for theses sports. La Tirana (a small town in the Norte Grande region) is host to the most important festival dedicated to celebrate the Virgin of Carmel, which is Chile’s patron saint.

Social Security

Chile switched to a privatized social security system in 1981. Chilean workers are contributing 10% of their pay into private personal accounts managed by private companies (known as Administradoras de Fondos de Pensiones, or AFPs). Workers also pay commission and service fees to these AFP’s. Work is being done to assist those who are not in the system (self-employed) to receive a pension. In past years Chilean were unhappy about the way privatized social security was working because it was taking a toll on their income and once retired you’re you got half the money you put in causing some to become poor. No studies have been done recently to determine the success of privatized system.

Healthcare

Chile has two healthcare systems private and public. Workers can chose which system to participate in but must pay about 7% of their wages (Health care reform in Chile). The majority of the population is under the public system. Even those who can’t pay will get treated by general clinics operated by the municipal. Work related injuries have a special hospital where the person will be treated which employer pays for. Under the Private system you have different levels of coverage. The more coverage, the more it cost. Overall Medical treatment is far less expensive in Chile than in the United states and the quality is great as the majority of the doctors study in the United states and then once graduated return to their home country to practice medicine.

Language

The official language of Chile is Spanish. Everywhere you go Spanish is heard. It is recommended for those who would like to live in Chile that you learn Spanish before you relocate. The Araucanian is the Chilean slag that can sometimes be heard through the city. English is thought in school due to the importance of the language in the business world. Since English is thought in school the practice doesn’t typically extend pass that. Some parts of Chile have communities that speak German given that some Chileans have German descent. Dialects are still heard but mainly up in the mountains where poor communities reside. Some of the know dialects are Mapudungun, Aymara, Rapa Nui, and Huilliche.

Conclusion

Based on what we have learned about Chile’s cultural background we can expect a positive experience as well as few challenges when trying to do business in this country. For example, learning about the typical meals will benefit us when trying to determine what products we should introduce or modify to fit the culture. Also being knowledgeable about the housing situation in Chile was benefiting. This will let us know the living arrangement which in turn will help us identify any special requirements, like the amount of space available for products. In regards to the potential road block, we noticed that because the national language is not English, there can be translations mistakes as English is not the first language. Chile can be a successful business partner if we take careful consideration of all the elements that make this country unique.

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