[button size=”small” ]Source – Forbes.com[/button]
Obtaining an MBA degree is a given today for anyone who wants to make a career in corporate America. Few universities today have ignored the need, offering programs covering the fundamentals of business and economics.
In the area of international business, however, few MBA programs give more than a passing recognition. Given the extent to which business is being done on an international scale, this is a serious shortcoming.
The University of Miami is beginning to address this problem. It is offering a field trip to MBA students, in this case to China, to visit with companies doing business there to see the challenges of operating in a business environment with rules and problems entirely different from those found in the U.S.
The choice of China for this mind-broadening exercise couldn’t have been better. We see here an economy where opportunity beckons in every direction. While China, as a source for cheap products for the U.S. market has been thoroughly exploited, its potential and need to develop the internal market for U.S. goods has only been scratched. Best of all, it is a business environment that welcomes outsiders, unlike some other nations in the developing world.
With Miami’s Latin population and student body, U of M is a natural to develop an MBA program with a South American focus. The focus on China is recognition that interest follows opportunity, not the other way around. Also, world trade is no longer two dimensional or necessarily reciprocal.
Spearheading this effort on behalf of the U of M is Dr. Michael Werner of U of M. Werner is also affiliated with Tsinghua University, which is the premier technical university in China. Adjacent to it is Beijing University, the premier liberal arts university. They are the MIT and Harvard of China. Werner is working to establish an exchange program with Tsinghua where students from U of M and China would spend a semester in each other’s university as part of their degree program.
The business side of the trip involved company visits in Beijing and Shanghai with Chinese and foreign businesses in various fields. A visit to CreditEase, a Chinese company, gave us insight into consumer borrowing and lending in a country where credit scoring is more art than science. Of interest here was the fact that loans for education were in greater demand than for automobiles.
A visit to Credit Risks, a U.K. company, gave us an update on the difficulties for foreign companies of joint venturing a new business and the difficulties of dealing with governments at the provincial and city level in each new location.
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Other visits to Baosteel and Volkswagen gave most of these students their first exposure to what a large manufacturing plant looks like. A visit with representatives of the U.S. Department of Commerce provided insight in what the U.S. government is doing to provide information and contacts for U.S. companies wanting to sell into the China market. Protecting intellectual property rights was also discussed.
To understand the magnitude of the opportunity here, one statistic stands out. The U.S. has nine cities with a population more than one million, China has 107. That kind of market concentration allows for tremendous economies of scale. There was a high level of interest by the companies we visited to promote China. However, at times, their presentations involved company representatives pretending to speak English and we, politely, pretending to understand.
The trip, of course, was not all business. Plenty of time was devoted to experiencing the people and culture of this most dynamic nation. The trip included visits to the forbidden city and great wall of China in Beijing, the terra cotta warrior museum in Xi An and the Bund and French Concession in Shanghai.
While travel in China has a long history of bad food, poor accommodations and unreliable transport; none of this holds true any longer in the large metropolitan areas. We found the food, hotels and transportation here the equal or better than in Europe or the U.S. Walking, however, was another matter. You had to share the sidewalk with bicycles, electric rickshaws and occasionally, cars.
Today, U.S. corporations have their overseas operations staffed mainly with third country nationals of European or Asian extraction. These foreign nationals are competent, willing and less costly. The effort to develop U.S. nationals within their own organizations is less attractive to these companies because of the greater job mobility in the U.S. making experienced U.S. nationals highly marketable in a culture where company loyalty is low.
Unless this changes more U.S. multinationals such as General Electric, Citibank and Chrysler will find themselves with foreign born CEOs. Such leaders can be expected to exercise much more international centric decision making and feel much less need to subordinate the long-term interests of the U.S. over those of other countries offering better short-term benefits.
But national interest does matter. World trade is a form of warfare, albeit a peaceful one. As in warfare, however, there will be winners and losers. It is not always a win-win proposition. A failure to recognize national interests leads inevitably to politics and policies that endanger the very process of world trade.
A goal of MBA travel programs should be to stimulate interest in pursuing a career path that would otherwise never occur to these students. The students I accompanied had several entrepreneurs who already had work experience and showed a great deal of interest in how they might expand the scope of their budding enterprises.
MBA programs are expanding into specialized areas such as real estate, hospital administration and financial analytics. Specialized programs in international business could go a long way toward broadening the world outlook of U.S. business majors. As the WWI song goes, “How ‘ya gonna keep ‘em down on the farm after they’ve seen Paree.”