Trade Credit and Personalismo in Latin America
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Personalismo is a behavioral norm which is generally accepted as an important Latin American Cultural trait.' It has been discussed as having a primary influence on the political and business systems of this area. Its influence on a business system and trade credit is the concern of this article. Parts of a diagnostic research study on the operational problems of the trade credit system in El Salvador2serve as the primary basis for the discussion that follows. The relevant findings of this El Salvador study with respect to personalismo were subsequently confirmed through lengthy interviews in Mexico, Guatemala, Costa Rica, and Honduras, thus warranting in subsequent comments, guarded generalization for all of Latin America. Personalismo Defined Personalismo is a complex phenomenon which originates from the Latin American's belief about the nature of man. While Latin Americans respect each man for what he is as an individual, this respect is based on a man's inner worth, on his "soul," rather than on his tangible (often material) evidences of accomplishment, as often happens in the United States. To a Latin American a man's "soul" is made up of many elements which are strikingly intangible, for they include such traits as honor, spirit, pride, bravery, sentiment, and trustworthiness. As a result of this intangible nature, the summated value of a man's "soul" cannot be determined from objective criteria such as grade averages, financial success, or even by socioeconomic position, which is often attempted in some * Dr. Brasch is an Associate Professor of Marketing at the University of Nebraska, Lincoln. His related research on trade credit has been published in Economia Salvadorena and in the Nebraska Journal of Economics and Business. 1. John P. Gillian, "The Middle Segments and Their Values" in Latin American Politics, ed. Robert D. Tomasek (Garden City: Doubleday and Company, 1966), pp. 23-40. 2. John J. Brasch, A Descriptive Analysis of the Trade System of El Salvador, Doctoral Dissertation (St. Louis, Graduate School of Business Administration-Washington University), 1970.
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countries outside of Latin America. A man's inner worth can only be subjectively evaluated and this needs to be done through an interpersonal relationship. There is thus a preference for personal relationships in Latin America and the aggregate phenomenon of this seeking of personal relationships has been called personalismo. The Nature of Personalismo in Daily Life As a result of personalismo it is not surprisingthat in Latin America anyone seeking an action favoring himself is anxious to become known personally to the person in control of the decision. Such solicitation of acquaintance exists because it is through personal contact that judgments will be made as to character, as to whether or not a man merits the decision maker's trust and respect and thus his favor. Because of per
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