The End of International Business November 13, 2009
Posted by thirdculture1 in Global Leadership.Tags: Cross-cultural
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Naturally, there are different laws and politics overseas but the idea of us (domestic) and them (international) no longer holds. When the owners, management, clients, suppliers, and labor are global the only thing domestic is a slender thread to the nation state. Take a hypothetical company whose management and ownership is mostly US but whose major supplier is in Shanghai, whose biggest client is in Seattle, and whose go-to graphic artist is a Russian in Toronto. Or, take the beer company, formerly known as the American icon Anheuser-Busch, but which was sold to a Belgian brewer. Business is not international, business is not domestic, and resists neat categories! Business is an involved system that taps into the humanities; it is not for amateurs, but it is not impossible.
Most of us would rather be with those like us. Unfortunately, this itch to be with our “own” is a wake up call to make brand new friends from other countries. One of the hottest and wealthiest artists in the US is Japanese and his name is Murakami. Murakami’s work sells in the US and Japan, and it is a fantastic blend of Disneyland and the Japanese Edo Period. Murakami takes from the past, and gives it new meaning in the present (aka re-inscribing). Murakami transcends but includes the past. McLuhan noted that we drive into the future looking into the rearview mirror. Murakami gets it.
Many organizations do not have such sensitive antenna and they definitely do not get it. They come up short in understanding the wider system of the world which is their market. If you want to gain a deeper sense of the global market, you could study epidemiology but I doubt many captains of industry would entertain this idea—even for a second! For them, it is the Harvard Business Review, a circle of trusted contacts, and consultants. In other words, this is exactly what everyone else is doing. This does not foster creativity, it is dull, unproductive and not a strategy for sustainable success.
The global system also consists of islands. These are spaces within systems which include schools, hospitals, airports, and prisons. They are places unto themselves, isolated but having specific material needs that must be satisfied. You can do business with them especially if you understand them.
Many business books lack the humanist insight. If you have read one marketing book you have read them all, leaving you with no edge. Do any of them suggest studying the contemporary art of China to learn Chinese culture in order to grasp the sensibility of China? I doubt it very much! At best you might be quickly introduced to a Chinese ad (probably hopelessly outdated). The approach is backwards. Especially with the advent of information technology, information transfer is placed higher than knowledge in importance and thus inhibits us becoming learners. This is a luxury no one can afford.
There is no international business. It’s just business, stupid! This is an important and subtle point for those seeking to lead cross-culturally.
By Mark Friedman, president of Third-Culture (http://www.third-culture.com/ ) and a member of The Leadership MBA faculty.
Well said Mark as we are creating a pressure cooker atmosphere for the development of the next generation of managers who will be dealing with these new realities.
Across the globe mangers will have to come to grips with a world economy increasingly shaped by the emergence of China and India as major economic powers. They will face global labor markets and complex environments generated by moving operations overseas and other strategies for operating in several different countries.
The next ten years promise further transformation and with that change will come a new agenda for executive education and development. As a result, they will need more sophisticated strategies to engage in the global market. They will travel frequently and spend a greater part of their business careers outside the United States. To help prepare them for this expanded role they will need to be proficient in:
* Recruiting, hiring, and developing talent around the world
* Acquisition and diversification strategies encompassing a global outlook
* Business and market expansion opportunities worldwide
* Understanding international politics
* Managing global supply chains
* Environmental challenges that will vary greatly by country
* Communication across the organization in several different languages
* Organizational change challenges in different cultures
All of this has become even more pressing with the current economic situation, especially since Asia appears to be recovering faster than the US economy.
Mark,
I find your perspective to be fresh and necessary for moving forward on any front. Having had the opportunity to spend a couple of months in France this past summer, I was amazed by how seeming differences are merely a veil that popular media drapes over our eyes, perpetuating an illusion that we are separate, different, preventing our similarities from being exposed. We are truly all in the same boat, whether the cheese comes from Vermont or from Roquefort, or whether the workers toil in factories in Taiwan, India, Mexico, or Massachusetts. I find it terribly interesting that companies prefer to manufacture products in places where health and safety regulations are less stringent and therefore, less costly – critically important in the drive for ever-cheaper goods. As the global system becomes more self-aware and consumers around the world become more savvy, I wonder what will prevail, what will we count as cost?
Chere Nancy,
Merci de m’avoir ecrit! I want to learn more about your stay in France and I will write you!
You bring up a very interesting cultural contradiction which is that the US, which is held to be very future oriented, through off-shoring and importing, is actually engaged in very short-term thinking. In the short-term it makes perfect sense to off-shore and load up on lower cost imports. If you can make it cheaper elsewhere, or if you can buy something cheaper that is made elsewhere, then “just do it”!
As far as illusion, massive importing and off-shoring can all be justified in the name of free trade. As Keynes said, and we are all Keynesians today, even the most practical person is usually in thrall to the ideas of some long since departed economist! I think you are absolutely right about the world becoming more aware. There is such an explosion of alternative perspectives and perhaps many genies (jinn جني) are being released for our greater good!