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Our Long Journey to Globalization
By Pam Losefsky
Escorting a well-known American operations expert on a factory tour in France, Rob Smith, then Project Management Director for Delphi Diesel Systems, a global fuel injection systems manufacturer based in Paris, was mortified as he watched the man alienate key people.
The expert’s “Atta Boy!” worked well for him in Detroit where it is understood as an enthusiastic compliment. But when delivered brashly in France it served to confuse and anger the French factory director and his staff, who could not understand why they were being yelled at and called boys.
Smith, who has graduate business degrees from both UT and the WHU-Koblenz in Germany, has found himself leading significant cultural integrations on many a factory floor and in many a board room. Time and again, he has deftly smoothed over the faux pas of his fellow American businesspeople, keeping on track work and negotiations that might have otherwise gone terribly awry.
American companies often still don’t understand that they could gain significant competitive advantage if they more fully appreciated and respected other cultures,” notes Smith, who has lived and worked throughout the world.
Smith makes an effort to learn some basic words and phrases and to understand the business customs of the countries he visits well before he sets foot in them. However, his conscientiousness appears to be the exception rather than the rule.
For many years following World War II, the relative wealth and strength of the United States led the country to have little interest in learning foreign languages, much less being able to effectively communicate and navigate in the complex business environment of a foreign country. It wasn’t until 1958, when Congress passed the National Defense Education Act, that the federal government revealed a desire to strengthen U.S. understanding of foreign cultures, recognizing that the country’s defense, security, and welfare were dependent on its global knowledge.
That piece of legislation provided mandates for institutions of higher learning to establish area studies programs and foreign language curricula as well as education grants for overseas study.
However, these provisions had only an indirect influence on U.S. business interests abroad, as these programs were housed within liberal arts. Very few U.S. business students, graduate or undergraduate, studied a second language or world region, and Americans conducting business overseas rarely bothered to learn the language, culture, or customs of their trading partners.
Eventually Congress reauthorized the area studies programs under the Higher Education Act, Title VI, and added other programs including, in 1983, the Business and International Education Program (BIE). Two-year grants made available under BIE provided short-term support of curricular development and business/academic partnerships.
Thus, for the first time, making certain that our future business professionals could compete in a global marketplace became a stated concern.
The federal government took one step further in 1989, expanding Title VI to include grants for Centers for International Business and Education (CIBERs) within the nation’s business schools.
Mandated CIBER activities included scholarly research, curricular design, support for international exchange programs, and language programs related to business. As national resources for the teaching of business strategies emphasizing the international context in which business is transacted, the centers were required to work with other higher education institutions, both at home and abroad, and to help businesses in need of international training.
But long-standing indifference and national arrogance proved difficult to unseat. In spite of enjoying bipartisan support, Title VI programs—of which there are 10 in all—were not necessarily hot topics or big movers in the Washington numbers game.
In order to change that trend, ten years ago Miriam Kazanjian, an independent consultant on international education, organized the Coalition for International Education to coalesce the power of 28 different national higher education associations. Since 1990 Title VI funding has doubled (a 50 percent increase in constant dollars) despite the fact that none of then-President Clinton’s budgets asked for a significant increase. “And in fact, the relative increase in the CIBER program since its inception has exceeded the overall increase in Title VI,” notes Kazanjian.
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According to Susanna Easton, who administers the CIBERs program in the U.S. Department of Education, “The CIBER program has seen rapid growth both in numbers and in total dollar amounts, and the commitment of the universities to the program has been most impressive. Typically, the federal funds are matched at least two to one by university and private funds.”
“Department of Education initiatives have played an important role in the vast improvements made over the last decade,” says Linda Gerber, Associate Chair of Marketing who has been instrumental in the international business (IB) effort at the McCombs School. But the United States is still playing catch-up after years of neglect. Consider that a mere thirty-six bachelor degree programs in international business existed in the United States in the early 1980s.
According to a study conducted by CIBER UT-Austin in 1999, since the inception of CIBERs a decade earlier, 349 curricular programs and 2,115 functional courses have been initiated or revised in the schools that house CIBERs. The numbers of faculty and PhD student internationalization workshops and study tours have also dramatically increased.
Today there are 28 Centers for International Business Education and Research throughout the United States that have collectively impacted more than 22,000 business students who have embarked on study-abroad programs over the last decade. Another 3.8 million business students have either taken international business courses or been taught by “internationalized” faculty.
The impact of CIBERs—and the business graduates they prepare—on U.S. competitiveness abroad is virtually incalculable, yet surely significant. There’s more than one culturally sensitive business person out there. The 1999 UT CIBER study found that an estimated 41,500 (or 57%) of the students who graduated with a concentration in international business would be working in internationally-related positions within five years of graduation.
“We’ve definitely come a long way,” says Robert Green, who was the director of UT’s CIBER until last year. “We’ve gone from sending none of our undergraduates abroad to sending about 100 a year—that’s 10 percent of the student body. On the other hand, we’re still not reaching 90 percent, the vast majority.”
The business students who have had study-abroad experiences find that they make a huge difference as they embark on their careers.
“During my senior year interviews,” says David Beeter, BBA 99, “my experience abroad was a definite point of interest for all the companies I spoke with.” Beeter studied at the Universita Luigi Bocconi in Milan, Italy. He deliberately sought companies with global operations and today has a job that puts him in contact with people all around the world on a daily basis. “My experience during college has prepared me to undertake this challenge without a second thought.”
As UT’s first double-degree student, Rob Smith (MBA and Diplom Kaufmann UT/WHU-Koblenz 93/94) made an important discovery. His vision was to build a skill set and career whereby he could live and work successfully in the U.S. and overseas. While interning with Dell Computer and later with BMW in Germany, he saw that his knowledge was transferable across cultures. “Manufacturing systems and processes are similar worldwide,” he says. “It was eye-opening and liberating for me to realize that having learned these in the United States, I could learn and apply them in other countries and cultures too.”
“By studying abroad, students are able to show employers that we can integrate into different teams, situations, and cultures in a successful and positive manner,” adds Karole Verlage, BBA 98, who went to Pontificia Universidad Catolica in Santiago, Chile. Verlage’s knowledge of different cultures, she says, has enabled her to easily navigate culturally sensitive situations that occur daily in Swiss Re, a global reinsurance firm.
Werner Gurtner is the supply chain manager for South America with Air Products & Chemicals, a global gas and chemical company. He lives in São Paulo, Brazil. As a double-degree student, he earned graduate business degrees from both UT and Fundação Getúlio Vargas (FGV) in Brazil. “To really know a culture and economy,” he insists, “you need to complete a degree at a local school. It would have taken me approximately ten years working in our U.S. headquarters to achieve the same amount of responsibility that I now have after two years in Brazil.”
Gurtner says that, unlike most of the Americans he knows who work in Brazil, he is able to relate more to the culture and habits because he speaks Portuguese and participated in the Brazilian college system.
Kazanjian believes that, in addition to educating the next generation of cosmopolitan professionals—like Smith, Gurtner, and others—who can affect the bottom line for multinational companies, small to mid-size U.S. businesses have seen the greatest benefit of CIBER programs. “CIBERs provide IB and foreign language training, seminars abroad, and market information to small and mid-size corporations to help them penetrate emerging markets,” she says.
Smaller companies can have a cutting-edge impact on reducing the trade deficit. The U.S. Department of Commerce reports that 97 percent of all U.S. export growth in the 1990s was contributed by small and medium-sized companies. “And yet only 10 percent of the nation’s small to mid-size companies are exporting,” says Kerry Cooper, executive director of the Texas A&M CIBER. “And the majority of those are selling only in one country. The most common reason cited by U.S. businesses for not pursuing export opportunities is a lack of knowledge and understanding of how to do business in the global business environment.”
Cooper continues, “A tremendous opportunity exists to expand U.S. exports and decrease trade deficits, and it can be met through increased international business education.”
Of course the United States has an enormous domestic market, which in part explains why American companies did not explore international markets as early as their foreign counterparts. In 1970, trade as a percent of GDP—the sum of exports and imports of goods and services—was 13 percent. Today it is around 31 percent. In the first half of this decade, U.S. exports of goods and services accounted for over one-third of the country’s economic growth. One estimate is that every additional $1 billion in exported goods means 20,000 new U.S. jobs.
But our nation’s CIBERs clearly have their work cut out for them. A 1999 study on the internationalization of American business education found that while American efforts have increased over time, “they continue to fall short of fulfilling the need of businesses for personnel who can think and act in a global context.” Green adds, “While it’s true that English is the language of business, until our students learn another language, they’re not really attuned to the fundamental differences that exist between people of different cultures.”
Still in the future is a time when international business won’t be an optional major, but a core component of the entire business curriculum, reflecting the reality that all business is global.
According to David Platt, the new director of UT’s CIBER, that time is in the near, rather than the distant, future. “The key to globalizing the business curriculum is to globalize the faculty by providing them with great international opportunities to infuse their teaching.” Increased flexibility and additional research funds are ways that the McCombs School is accommodating such faculty learning. "In 2001," notes Platt, "McCombs School faculty are working on such projects in Mexico, China, Thailand, Germany, Spain, and at least a dozen other countries."
Yes, technology has seemingly erased borders and made the whole world more accessible, "but you can't be successfully pointing and clicking your way around the world from behind a desk," Smith believes. "You have to go out there. You have to meet and communicate face to face with people to build the relationships that will seal the deals and yield enduring business relationships."
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
