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Fixed salaries are more appropriate in a hierarchical and individualistic system where more value is placed on the centralization of authority, not on factors that promote teamwork and organizational flexibility.
That kind of approach does not reflect the preferences of Latin American culture.
Compensation usually comes in the form of fixed salary.
The family is equally important when promotion is involved.Dávila and Elvira explain that social differences are manifested locally through benevolent, paternalistic leadership.“The senior executive has the personal obligation to protect subordinates, and even take care of the personal needs of workers and their families.”Generally speaking, paternalism involves a “father” who cares for his sons by engaging in permissive practices and providing moral support, even if his “sons” wind up being too dependent in many respects throughout their working career. Latin Americans prefer to depend on someone closer to the center of the organization, and to accept that this authority leads to behavior that avoids conflict and confrontation with one’s superiors.Some studies discovered that “manufacturing plants in Mexico made major cuts in their expatriate staffs, and found young, bilingual talent with managerial skills and university degrees [to replace them].Young managers accepted modern methods of management and production more readily than older managers did.”When it comes to compensation, Dávila and Elvira warn that individual financial compensation can stigmatize a worker as a “favorite” of management.
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Moreover, Latin American companies usually devote only a small part of their budget to training.