The world is shrinking, and nowhere is this more apparent than in business. While international outsourcing for manufacturing may have seen its heyday (see the Forbes article cited below), globalization is here to stay. Furthermore, the model of international engagement has changed, and our model of international education needs to change along with it.
In the past, businesspeople needed to understand another culture deeply. An American could be managing a call center in India, for example, and would need to know the language and norms of the country of his assignment in order to succeed. In the future, business will be not just international, but multi-national. An American managing a call center in India might be working for a Norwegian firm, supervising a Brazilian and a Japanese subordinate, and addressing problems which emerge from Australian customers.
The skills that managers need to succeed in that world are broader, although no less deep. Rather than mastering a particular culture, business education needs to focus on cross-cultural studies. Consider the distinction between education in a seminary and in comparative religion. This is exactly the transition that needs to be made in business education.
At UTA’s College of Business we have always approached education from a global perspective. In our Asia Executive MBA we partner with several leading Chinese universities and have educated more than 2,000 students. Students in the EMBA program at UT Arlington’s downtown Fort Worth Center enjoy a China immersion experience where they connect with their Chinese peers and learn about international and multinational business. We also offer an undergraduate international business major to prepare our students for the global, multicultural business market of the future, which includes an opportunity to study abroad for undergraduates (Barcelona) as well as MBAs (Spain and Portugal).
The college is home to a number of authorities on multinational business.
Sanjiv Sabherwal, Associate Professor of Finance, actively researches issues of international corporate finance. “The past several decades have seen significant developments such as deregulation of economies, collapse of communism, increasing integration of financial markets, and advances in technology,” Dr. Sabherwal says. “These developments have resulted in a more multinational business environment. Profits from overseas in the first quarter of 2013 accounted for 21.3% of American companies’ earnings. During the recent great recession in the period of December 2007 to June 2009, when the U.S. firms faced particularly difficult conditions at home, the proportion of U.S. corporate profits overseas was even higher and averaged above 30%. Foreign markets account for more than half of the revenues of many prominent U.S.-based companies such as General Electric, Johnson and Johnson, and Illinois Tool Works. Even Hollywood studios realize the importance of foreign markets for increasing their revenues. Studios such as Disney and Warner Brothers are producing Indian-language movies as they try to acquire a bigger share of a market that sells more than three billion movie tickets annually, more than twice the U.S. and Canada combined.”
Abdul Rasheed, Professor and Chair of the Department of Management, studies business enterprises whose operations stretch across national boundaries. Dr. Rasheed’s recent research identifies disadvantages facing companies operating in foreign markets. His analysis underscores the bias among investors against firms founded in dissimilar cultural environments, which creates a steep challenge to the manager looking to acquire capital resources abroad.
Deepak Datta, the Eunice and James L. West Chair of Business, and Marcus Butts, Assistant Professor of Management co-authored a forthcoming article that focuses on the role of international networks in firm internationalization. Dr. Datta and Dr. Butts found that firms with chief executive officers who had developed strong and diverse international networks benefited their firms via increased knowledge of foreign markets and improved performance in those markets.
Later this month, Liliana Perez-Nordtvedt, Associate Professor of Strategic Management, will present her latest research at the Academy of International Business in Istanbul, Turkey. Her findings focus on the challenge of obtaining the knowledge necessary to be competitive in different cultures. Dr. Nordtvedt underscores the value of having international affiliates as sources of knowledge to improve performance in foreign markets. Her study finds that a firm’s ability to master knowledge of foreign markets is more important than the speed and cost of acquiring such knowledge.
What do you see as the future of international business? Comment and make your thoughts known!
“Is Manufacturing Making A Comeback In The U.S.?” BY RYAN GALLOWAY