text:
TH UN D ERS I RD Magazin e WWW.T-SIRD.EDU 54 / 3 / 2001 THUNDERBIRD Page 2 The Financial Side of Social Responsibility Sodally responsible business practices positively impact one's bottom line, said Dr. Prisdlla Wisner. Page 6 Globalization: Good or Evil? Will recent events cause multinationals to retreat, or will they strengthen their resolve? Alumni and faculty discuss globalization realities. Page 10 Innocen( ts )ce Lost The September 11 attacks were atrodties that will forever change our lives. It seems that today, more than ever, this world needs Thunderbird. Page 12 Risky Business Risk assessment involves more than currency flux and finandal factors. It requires analyzing items such as political unrest or terrorism, said Professor Linda Wetzel, a former CIA officer. Page 16 The Language and Culture of World Business Master the secrets of doing business in Mexico, marketing effectively to France, or navigating China's politics. Thunderbird's language programs teach the critical business and cultural practices that make or break each business deal. TABLE OF CONTENTS Ranked # 1 in international business by The Wall Street Journal and U.S. News & World Report Thunderbird is America's premier source of global management education with operations in the U.S., France, Russia, China, Japan, Mexico, Taiwan and Brazil. Page 1 BORDERS FREQUENTED BY TRADE ... Thunderbird's ideals and principles get re-emphasized in the wake of the September 11 tragedies. Page 19 ENLIG HTENED SUBJECTIVITY To Will Warne '99, business success and failure ultimately depend upon successfully applying the cultural lessons he learned at Thunderbird. Page 21 EUROPEA N START OPTION The Thunderbird Europe, French-Geneva Center provides unprecedented European access. It's also helping Europeans acclimate before coming to the States. Page 26 SUPPLY CH A INS IN S.E . ASIA After three weeks of studying supply chain systems in Vietnam, Thailand, and Singapore, Dr. Winter Nie's students really know the score. Page 28 GAUGING RECESSION The U.S. was balanced on the brink of a recession before the terrorist attacks. Now what? Page 30 THE MIAMI HERALD AMERICAS CONFERENCE Mexican President Vicente Fox delivers keynote at major Latin American gathering. Page 32 THUNDERCOUPLES For these Thunderbird alumni who met and married, cross-cultural communications gets personal. Page 34 HOMECOMING Birds of a feather flock together. Digital Divide and Igniting Change share center stage with fun. Page 38 T- BIRD NEWS Page 40 N ETWORK N EWS Page 42 UPDATES ABOUT OUR COVER Dr. Priscilla Wisner's research quantifying the positive impacts of socially responsible business practices has been published by Harvard Business School Press and Environmental Quality Management - among others. ~~----------~ ? .' ' .. :. . '. 54/3/2001 'r.l ~ p . l . , .~ir;:. . r ~~~: t has been said so often over the past several weeks that it has become a cliche, but truly nothing does seem the same in the wake of the events of September 11 tho Our world, and our perception of the world, has been changed dramatically by the hijackings and attacks in New York, on the Pentagon and in Pennsylvania and the aftermath of those tragedies. Each of us is encountering those changes in different ways and places, but " B 0 R D E RS each of us has made adjust-ments in our lives. We are also learning some powerful lessons about ourselves and each other. In many cases, the lessons are reminders of what is truly important, what is truly central to our lives. That has certainly been the case at Thunderbird. It is always easy, in the flurry of day-to-day activities, to forget why Thunderbird is here. But never has the importance of our School's founding philosophy seemed more important than it does now. One of my predecessors as president of Thunderbird, William Schurz, put it particularly well: "Borders frequented by trade seldom need soldiers." All of us in the Thunderbird community are familiar with the story. Since its founding in 1946 as the American Institute of Foreign Trade through today, Thunderbird has been built around the idea that a world that did more business impacts of globalization - as well as Thunderbird's continuing commitment to ensuring that globalization occurs responsibly. For the last year, the focus of the Thunderbird Global Business Forum series has been business sustainability in a global context. Professor Priscilla Wisner has done outstanding work in this arena. She has been a featured speaker at the 2001 forums in Mexico City, London, and Hong Kong. Her work is one of the in-depth features of this issue. While Dr. Wisner's work is financial in nature, its underlying theme is that to be truly successful, a business enterprise or relationship must be sustainable. It must work for all parties, not just the individual enterprise that initiates it. It has to be what in popular terminology has become known as a uwin-win" proposition. Unfortunately, the history of global business is not rife with positive examples of this kind of sustainability, but they are being found more frequently today. More and more businesses and business professionals are recognizing the importance of seeing beyond this quarter's bottom line to build long-term success. While they haven't always reached this conclusion without external pressures, we do see more enlightened labor practices, more community building partnerships, more environmental sensitivity. together, that worked together, that understood one another better, would be a better place to live for all peoples. We are a school dedicated to that ideal, but we also understand the practical skills and abilities it takes to bring that dream closer to reality. While the rapid globalization of business over the past two decades is evi- Bv DR. ROv A. H ERBERGER, JR. I'm proud to say that many T-birds are leading these efforts at their organizations, and that should come as no surprise to anyone who knows this institution. After being immersed in a global community, getting to know and appreciate so many different cultures, and sharing projects and social occasions with classmates from more than PRESIDENT, THUNDERBIRD Thunderbird's 'The Continents' sculpture, which symbolizes world unity, was encircled by flags during a special post-September 11 memorial. sixty nations, it is hard to imagine anyone then going off to do business in anything but a "win-win" manner. dence of how much progress has been made, the events of this fall are a reminder of how far there is still to go. This issue of Thunderbird magazine largely examines the issues and This shared vision of a world that works and lives together with mutual respect and understanding is what unites Thunderbirds. This vision seems even more important now. • p.2 WWW.T- BIRD.EDU SUSTAINABLE ECONOMIC GROWTH AND SOCIAL RESPONSIBILITY How being a good corporate citizen also pays off financially By LINDSEY MICHAELS s being a good corporate citizen a luxury or a necessity in the 21st century? T Dr. Priscilla S. Wisner, an assistant professor of accounting at Thunderbird and Certified Management Accountant, argues that being socially and environmentally responsible isn't just 'right: it is actually a criticality for companies hoping to sustain their economic growth in an ever-more-connected world economy. Wisner has been quantifying that message, using data collected at hundreds of companies from around the world, at a series of Thunderbird Global Business Forums (TGBFs) held in Mexico City, London, and Hong Kong. Wisner will also present her data at the New York City TGBF on January 8, 2002. "A company's balance sheet only tells what happened in the past," explained Wisner. "Analysts and institutional investors now realize that intangibles - such as potential oil spills or public outrage over poor child labor practices - can be a huge predictor of a firm's future value. As a result, companies are being pressured to think and act more responsibly - and to disdose more and more at all levels of their value chain." According to Wisner, research shows that quarterly earning statements aside, proactive dedsion making and investment strategy often yields a better return on investment (ROI) than reactive dedsion making; some companies have created competitive advantage byembracing that concept. Wisner describes how leadership companies often follow a 'balanced scorecard' approach to better manage and implement corporate sodal responsibility. She dted four interactive dimensions that impact a company's performance: organizational learning and growth, internal business processes, customer impacts, and financial outcomes. Wisner stressed that in this 'balanced scorecard' approach to performance management, no dimension can be ignored. The learning and growth dimension is largely focused on employee and organizational capabilities and involves corporate attention to items such as workforce equity, environmental training, employee satisfaction, absenteeism, and safety. Yes, these are defmitely sodal and environmental 'nice-to-haves: Wisner agreed. After all, happy employees generally equate to focused and productive employees and strong corporate advocates; companies that maintain good environmental practices generally attract good press. But, these 'nice-to-haves' also yield definite finandal gains. For instance, unhappy or untrained employees may make mistakes and disregard safety procedures. Possible results indude higher defect and return rates, causing customer dissatisfaction and related sales dedines. The company not only loses revenues, but also incurs additional costs to recall and fix defective products, and potential liabilities if the product causes harm to the consumer. The second dimension of the balanced scorecard value chain is internal business processes. This is where attention paid to organizational capabilities begins to bear fruit in the form of decreased turnover and increased productivity, 54/3/2001 for example where safety tramlng results in fewer acddents, and where supplier certification helps minimize supply chain disruptions. Companies that manage their internal business processes effectively are more likely to make more productive use of their human and machine assets, minimize waste, improve safety, and pollute less. Finandal results indude lower dean-up costs, fewer fines and penalties, and lower employee turnover. 5 4 /3/ 2001 The customer impact dimension is one in which the company pays attention to the voice of the customer, both before and after the product sale. Too many companies only react to customer needs once sales decline or complaints are raised. Customers seek products in the marketplace (or conversely they avoid them) based upon their quality, as well as upon the company's reputation for outstanding social and environmental policies. Research has shown that WWW.T-BIRD . EDU consumers are more likely to choose produas that are associated with social responsibility. And in business-to-business commerce, many companies are now imposing social and environmental standards on their second- and third-tier suppliers. The financial dimension of the balanced scorecard represents the financial outcomes of all the decision-making and performance management that have taken place in the other p .3 three dimensions. Companies that don't treat their employees well will pay the price in terms of higher recruiting and uaining costs, perhaps in terms of poor produa quality and therefore additional warranty costs. Companies that employ processes that pollute the environment are impacted by higher costs of pollution treatment and disposal, fines and penalties, and insurance costs. Additionally, poor social and environmental reputations have a negative p .4 impact on the image and reputation of the firm, leading to other potential issues that are vitally important to companies. For example, • Will financial institutions offer better lending terms and rates because they know you're not hiding any potentially damaging social or environmental secrets? • Will consumers actively seek out your products (or, at least, stop actively avoiding them) based upon their positive perceptions of your company? • Will investors place a higher value on your stock, thus driving up your equity? PUTTING WORDS INTO ACTION Wisner's research shows that 10 percent of American consumers make purchases based upon social reputation factors while 45 percent admit to avoiding products when they don't believe a company is acting responsibly. We have seen recent examples of this reaction in the apparel business where entities such as Nike were subjected to sharp criticism some years ago. Wisner said that consumers associate product quality with the last company that touches a product before it reaches them - not an early-on supplier. That's why companies such as Ford and General Motors now require their suppliers to be ISO 14000 compliant; why McDonalds imposes strict chicken raising standards on its egg suppliers; and why Wal-Mart and Clairol audit and certify suppliers regularly. While Wisner cited numerous examples - backed by hard and fast numbers - during her TGBF talks, she singled out a T-bird when demonsttating how the balanced scorecard approach can actually propel one's business financially. Co-founded in 1991 by Alfonso Hernandez '83, The Argus Group is one of the Caribbean Basin's largest apparel manufacturing conttactors. The small, private company counts WalMart arnong its dients, has 6,000 employees, and operates eight facilities in El Salvador, Honduras, Nicaragua, and the U.S. Under Hernandez' leadership, the company has developed one of the most progressive labor programs in its indusuy - earning Nicaraguan President Amoldo Aleman's Best National Labor Programs award in 2000. So, why does a small company that manufactures in some of the world's poorest regions not only embrace, but heavily invest in, 'responsibility?' One reason is that Hernandez, WWW.T-BIRD.EDU an EI Salvadoran himself, simply seems to have an inherently soft heart and sttong sense of humanity. But, Hernandez assured, he can also quantify the positive financial impact of such works on ROI. "My goal is to position The Argus Group as the most professional supplier of apparel manufacturing services in Centtal America," he said, "and to brand us as such in the minds of U.S.based apparel indusuy representatives. That means turning out top quality work and meeting time commiunents. But, to accomplish that, you really have to invest in people - because if you don't, your competitive edge will walk out the door and you'll be forced to start from scratch each day." For Hernandez, healthy, happy people were the first priority. "When you're in a heavily people-oriented business, you obviously need to have a healthy labor force to compete effectively," he said. "People can't focus when they don't feel well." While analyzing his company's leading cause of absenteeism Hernandez realized that 85 percent of absences were caused by employees having to miss an entire day of work - and sometimes ttavel great distances - to reach state-provided medical facilities. As a result, most employees only visited doctors once they got really ill. Hernandez reasoned that if he offered free, full-time, state-sanctioned medical services on-site at The Argus Group, it would be easier for everyone to obtain required care. What's more, they could pursue preventative and early onset care. While that investment definitely proved valuable, Hernandez found that it didn't go far enough. Argus Group employees still missed work when their children or extended family members got ill. The solution? Simple. Also provide care for each employee's family. "While the average rate of absenteeism for our indusuy within the Caribbean Basin is 10 percent, we've reduced ours to four percent," he said. Argus Group employees also get free, on-site eye exams each year. If they need glasses, those glasses are provided free of charge - or else are highly subsidized. "We see people almost jump out of their skin when they put glasses on and see dearly for the first time," he said. "It's incredibly rewarding." So, too, Hernandez said, is seeing his 54/3/2001 employees' children at on-site daycares and schools. Quality educational opportunities are often rare in El Salvador, Nicaragua, and Honduras for children of the working dass. Thus, Argus Group employees possess the power to achieve another important goal: they can forever change their children's lives. Helen Walton, widow of Wal-Mart founder Sam Walton, further heightened parental hope during a recent supplier certification visit. According to Hernandez, Walton was so impressed with his employees and company schools that she promised to provide four full Arkansas university scholarships to Argus Group school graduates. 'T d like to tell you that these benefits are something we just provide, but the uuth is that our employees earn every one of them," Hernandez said. "The most productive facilities earn the most benefits. "In many cases, our factories in Latin America are producing better quality at better prices than U.S. factories. As a result, more and more companies are coming to us as their primary resource - which means we can employ more and more people and provide them with more services." That's exactly what Wisner means when she talks about doing business responsibly. "The Argus Group is an excellent example of how socially responsible business practices can actually compel - rather than compete with - financial growth," she said. By gaining the endorsement of a major distribution chain like Wal-Mart, Hernandez has effectively earned 'certified source' status with every dothing company that sells worldwide through Wal-Mart stores. That recognition leads to more business opportunities, which in tum leads to more employment opportunities in the countries where such work is done, which opens the door to further quality-of-life employee gains, which, in turn, creates emerging markets for other services and goods. • You CAN LEARN MORE about Dr. Wisner's ROJrelated social responsibility research at the January 8, 2002 TGBF in New York City. Details are available on the Thunderbird Web site at www.t-bird.edujglobalforums. Or contact Gail Yates, director, Thunderbird Global Business Forum by telephone at (602) 978-7542 or via email at email@example.com. CONTINENTAL PROMOTION GROUP (CPG: www.cpginc.com) is the global title sponsor of the Thunderbird Global Business Forum series. Owned by Thunderbird alumnus Sam Garvin '88, CPG provides a single international resource for worldwide consumer and ttade promotion services. The company specializes in complete rebate management and fulfillment. It still demands .l / . / the very best from international professionals r ·· OAKBRIDGE: HR SoLutions for InternationaL Expansion Denver Tokyo Osaka London www.oakbridge-gLobaL.com firstname.lastname@example.com .--.. ,,- -'l,/<~r,~~' ,~;. OakBridge Inc. specializes in international human resources solutions including search. assessment. and outsourcing of the recruitment function. If you plan to set up in new overseas markets. strengthen the international function at head office. or hire a new kind of country manager. contact us. We know the kind of people you need. p .6 WWW.T-BIRD .EDU GLOBALIZATION: GOOD OR EVIL? Will the new world war against terrorism cause multinationals to retreat, or will it strengthen their resolve to globalize? By JESSICA MCCANN , 'G lobalization is a requirement," said Tabatha Chapman '96, director of global business development for CIGNA International. "The U.S. market is saturated," said Mark Smucker '96, general manager, Mercosur, for the J.M. Smucker Co. in Brazil. 'The growth opportunities are abroad and that needs to be our focus." "Globalization is how the world economic and trade system functions today," said Hasan Yalcin '96, commercial counselor for the Turkish Embassy in Moscow. "It is not you who decides whether to become a part of it or not; it is globalization itself that sets the rules." Clearly, globalization is a powerful business force that has gained serious momentum in the past two decades. Terrorism may be able to temporarily disrupt that momentum, but few believe that it can stop it. That said, globalization may become a slower and more costly endeavor for a while. It's based on an open, borderless world, which is in stark contrast to the heightened security we're experiencing globally in the wake of the terror attacks in the U.S. The task for business and political leaders going forward is to secure both free exchange and safety. The future of global economy could depend on it. Why globalization? Because the net effect is a positive one. Globalization has helped distribute financial capital, technology and innovation around the world. It has created jobs, enabled manufacturers to boost productivity, and lowered prices for goods. Perhaps the most positive result of globalization has been the empowerment of consumers far and wide. "I think that's a point that often gets lost." said Bob Saum '91, a sr. financial management specialist for the World Bank in New Delhi, India. He oversees financial management issues in the South Asia region for the bank, including Pakistan, Bangladesh, Nepal. and Sri Lanka. "While there have been SOII;le negative sides to globalization, there are also clear benefits in providing greater empowerment to people and opening up countries and economies, providing opportunities to people that they may not have otherwise had." The World Bank is one of the world's largest sources of development assistance, providing more than US$17 billion in loans last year. It works in more than 100 developing economies, focusing primarily on helping the poorest people and the poorest countries. CIGNA's Chapman agrees that empowering the consumer is one of the greatest benefits of globalization. Based on her work throughout Latin America, she offers a case-in-point. "Not all Americans have access to private healthcare, but access is even scarcer in many Latin American countries," she said. "In the absence of competition or with the existence of too many competitors in a highly-fragmented market, people often have very little choice and long waits for care, even if they are paying premium dollars." CIGNA International serves markets outside of the U.S., primarily in the United Kingdom, Latin America and Asia. Its most dominant division provides expatriate benefits, but the company also provides the full range of employee benefits, insurance and financial services for groups and individuals, including health care, pensions and life insurance. "When introducing new practices into a market, you try not to send a market too far out of bounds; you always aim at improving the current market offerings. We often bring a certain 54/3/2001 quality of service that does not exist in the market, such as medical management, shorter waits for care or access to toll-free phone numbers where someone can answer questions easily. That begins to change the game and raises the bar for local companies to address customers in a better way," said Chapman. 54 / 3 / 200 1 One drawback of globalization is that it creates a certain vulnerability amongst highlyintegrated economies. Take the impact of the 1997 Asian financial crisis on Turkey. After adopting an export-based development strategy in the 1980s, Turkey gradually expanded its textile sector and sales in Russia WWW. T - B I RD.EDU and Europe. Before long, Turkey became one of the world's top exporters, accord ing to Yaicin, who helps develop and promote trade with Russia in his ro le at the Turkish embassy in Moscow. Turkey's export success was ach ieved, he says, through combined policies of liberalizing trade, investing in tel ecommu-p. 7 nications and infrastructure, and finally adapting to the world econom ic system. When the financial crisis hit Asia, the demand for raw materials and energy from these countries fell sharply. This diminished demand pulled down the prices of commoditi es. This started a crisis in Russia, which relies p.B heavily on energy sales and other commodities, and Turkey's exports to that region dropped dramatically. Compounding the problem, the currency devaluation in the Asian countries made Turkey's exportable goods more expensive in the European market. While globalization allowed Turkey to seize new export opportunities, it also made the country more vulnerable to downturns elsewhere in the world. "The devaluation of baht in Thailand hit Turkey's export sales to Russia and to the EU after two years, because we live in a globalized world," said Yalcin. Perhaps the strongest downside of globalization is that it can dominate political and cultural empathy. With it, economics drive the nation's welfare, rather than political boundaries or systems controlling that welfare. A sense of loss over control, compounded by the failure of key nations to benefit from globalization, can create fertile ground for extremist ideas to grow. "This is very significant in the latest crises of September 11," said Dr. Roe Goddard, an associate professor of international studies at Thunderbird's Glendale campus. ''There can be a feeling of loss of control, which in turn creates insecurity and anxiety. And it provides a very convenient target for people whose economic life might have been miserable even without globalization. Globalization is an easy scapegoat." "An important thing to remember about globalization is that it will benefit the world community in the long term, not necessarily in the short term," added Smucker, who has worked for the family-run company in Mexico and Brazil, as well as in his hometown of Orville, Ohio. "That's why there's some resistance to the idea, because in the short term it can create more disparity than already exists. The challenge becomes figuring out how to eliminate the disparity and spread wealth across the global population more quickly, so that everyone can benefit as soon as possible." GETTING BACK TO WORK Regardless of the long-term impact, the recent terror attacks in the U.S. certainly disrupted normal business activity short term. Lives were lost, property was destroyed, meetings and conferences were canceled, travel plans were altered. Whether directly affected by the events or not, millions of people around the world felt the pain and most companies quickly took steps to be sensitive to the loss. "We had a commercial on the air that shows people from all different walks of life - with Louie Armstrong's song 'Life is a Bowl of Cherries' playing in the background. In light of WWW.T-BIRD .EDU the attacks, we took out the music track to reflect the somber mood of the U.S.," said Smucker, whose great-great-grandfather founded the company. "Even small things like that show that there is definitely an increased sense of awareness." The 1. M. Smucker Company is a manufacturer and market leader of fruit spreads, ice cream toppings, health and natural foods beverages, and natural peanut butter throughout 54 /3/ 2001 North and Latin America, and Australia. Its products are sold in more than 70 countries, and it has manufacturing facilities in Scotland and Brazil, with another set to open soon in China. To restore a sense of normalcy, multinationals must work to ensure a secure environment for their operations and nurture a sense of safety and comfort among their employees. "We can't go back to dosing borders, because 54 / 3/200 1 that is exactly what the terrorists want," said Clayton McManaway '59, founder and pres ident of Shamrock Consulting, In c. "But a lot can be done to improve security. Corporations need to have good contingency and uisis management plans in place." McManaway's company advises corporations on international operations, due diligence investigations and global strategies. He draws on more than 40 years experience working for the U.S. Foreign Service and in the private busi ness sector, dealing with crisis management, security engineering, risk and threat a nal ysis, and market intelligence. He has held numerou positions for the U.S. offices of the secretary of state and defense, including deputy for the Office of the Ambassador-at-Large for Counterterrorism . Most companies have detailed contingency plans to protect their data-largely the result of Y2K preparations-and many also have emergency evacuation plans. But having plans in place is not enough, according to McManaway. ''That's not worth a damn if you don't exer- WWW.T- B1RD .E DU cise it," he said. "You've got to run through it frequently, so everyone knows the drill and can function in a real crisis. And you've got to get the top management involved, the plan has to be tailored to th e culture of a given company." The pl an also must account for human needs after the initial crisis situation. For example, following the September 11 attacks, CIGNA immediately launched a number of employee p.9 that, for example by focusing on research and development of new products to increase their market share." T HE WORLD UNITED While Osama bin Laden and other Islamic extremists are inciting war between the Muslim world and West, most world leaders have rejected that notion. British Prime Minister Tony initiatives, including organizing fund raising, allowing workers to go to New York to volunteer, and hosting a number of seminars on coping with grief and fear. " I ••• N THE SHORT-TERM [GLOBALIZATION] CAN CREATE MORE DISPARITY THAN ALREADY "CIG A is a very deliberate and meth odical company, but during the aftermath EXISTS. THE CHALLENGE BECOMES FIGURING OUT HOW TO ELIMINATE THE DISPARITY AND SPREAD WEALTH ACROSS THE GLOBAL POPU- of September 11 , it reacted to the events with a speed often only seen in smaller co mpanies, said Chapman. "It didn't affect our intern ationa l LATION MORE QUICKLY, SO EVERYONE CAN BENEFIT AS SOON AS POSSIBLE:' MARK SMUCKER '96 operatio ns in the immediate term, as much as our domestic ones. The attacks in New York really affected the morale of our workforce given the location of our offices in the City, as well as the proximity of our headquarters in Philadelphia, which produces part of the skyline of Center City. Everyone was rea lly nervous about returning to the buildings so a lot of ca re was taken to help them feel secure. I was really impressed with the soft and hard initiatives." Looking forward, Goddard doesn't believe fear of travel and political unrest will lead major multinationals to retreat from foreign markets, but rather will strengthen their resolve for globalization. Sti ll, co rpo rati ons will need to rethink how they do business, reassess their long-term goals and refine their business strategies, all within a higher-risk environment. "I do n't think that these events will necessarily deter big projects, other than maybe those going into marginally vo latile countries like Indonesia," he said. "But, given th e current economic situation, I think companies must lower their growth expectations for at least the next year. There are going to be more layoffs, but I think companies need to be more ueative than Blair summed it up best during a visit to Pakistan when he said that the terrorist attack in the U.S. was not a crime against the West, but rath er "a crime against humanity." Thus, the world is at war with terro rism and not with the people of Afghanistan or believers of Isl am. Such global unity is one of the few positives to come from this devastating u isis. Unwittingly, the terrorists have actually ueated an opportunity to further unite nations, to show that we do indeed share meani ngful interests, even if the most pressing happens to be security. Perhaps if terrorism is contained, people worldwide will have a greater appreciation that the fates of the West and the developing world a re vitally integrated - econom ically, as well as politically. "I have Afghan friends and former colleagues who are living in Qandahar, Afghanistan, and in Queta, Pakistan," said Saum, who spent two years in Pakistan worki ng with Afghan refugees. "So it's a real mixed bag of feelings for mebeing Ameri can and knowing what happened in my home cou ntry, yet knowing the complicatio ns and difficulties of the region." aum is hopefu l that the global coalition being developed to fight terrorism will become an important milestone for future global unity. "I hope it wi ll remind people how integrated we all are and how uitical it is for us to remain integrated," he said. "Something like this event drives us even further to work at globalization and make it a positive experience for everyone." _ p . l0 54/3/2001 INNOCEN(TS)CE LOST ... THE " I t was the best of times, it was the worst of times, epoch of belie£ it was the epoch of incredulity, season of Light, it was the season of Darkness, it of hope, it was the winter of despair ... " A Tale On September 11, 2001, the world watched in horror as four commercial aircraft helped to forever change our lives. While each of us was affected in personal ways, the Thunderbird community was especially touched. Several hundred alumni and student interns worked at or near the World Trade Center and Pentagon; others had friends and relatives on the planes. They, like other T-birds, embrace values and beliefs that are diametrically opposed to those of their attackers: a love of peace, an acceptance and understanding of diversity, the pursuit of missions that accomplish change through global economic gain. Thankfully, the safety of over three hundred T-birds has been confirmed as we go to press. Sadly, some T-birds may remain unaccounted for. We at Thunderbird extend our deepest sympathies to the friends, families, and colleagues of all those who were lost. They came from more than 80 countries and were truly global citizens. Despite these horrific acts of terrorism, T-birds - and indeed, much of the world - clung to a sense of oneness that knew no geographic boundary, race, creed, color, or religion. Frantic requests for information about T-birds thought to be in the New York City area, confirmation as to which T-birds had survived, words of encouragement, eye witness accounts, and offers of free housing - worldwide - were immediately posted on a Crisis Network discussion board on the School's My Thunderbird intranet, giving anxious T-birds everywhere an instant online place to meet. Things began promptly with a post from Ramelle Gililand '98 asking. "Anyone heard from David Welton or Joao Calil?" That note was quickly followed by a message from Kim Stinger '01 imploring, "NYC T-birds, please check in." And, they began doing so: "Shreyas Chari is OK," "Andres Castillo is OK," "Janet Joyce and John Fairchild are OK," Navin Gupta OK, Rodrigo Vega OK, Charles Xiao Liu OK, Kiyoko Fuchimoto OK, Ladan Madraseehee OK." As hundreds of 'OKs' poured in, Thunderbird staffers began compiling names into an alphabetized list online. Meanwhile, on campus, classes were cancelled and hundreds of stunned faculty, staff. and students began gathering numbly around televisions in the !BIC Media Room, Tower Lounge, and AT&T Auditorium. By 10:30 a.m., former CIA officers Paul Kinsinger and Linda Wetzel (who teach Business Intelligence, Political Risk, and Regional Business Environment: North America) were sharing their expertise with T-birds in the AT&T Auditorium. As afternoon ebbed, survivor accounts started surfacing online, drawing the Thunderbird community together tighter still. "I was writing an office memo when I heard a compound boom, which sounded like the side of a truck had been dropped onto a building from 10,000 feet," said Walter Joyce '99, chief operating officer of Inculab, Inc. "I turned around to see what looked like 20 floors ablaze with smoke rising to tile top of the building. Even though I was staring out of the window at the fire, I just couldn't process what I was seeing. I just became grief-stricken and picked up the phone to call my wife Nancy to tell her I was OK and that I loved her. In what I now think was a divine act, I looked away from my window long enough to only have to hear the second plane." "I worked on the 37th floor of the south tower," wrote Hazem Gamel '98, an Egyptian/American assistant vice president at Oppenheimer Funds and TM-New York City chapter president. "I managed to escape unscathed except for being completely caked in dust and witnessing among the most horrific sights I'll ever see. I also saw a great deal of compassion, level-headedness, and courage .... The impact of these acts will be felt for a long time by many people around the world." 'To all of you wonderful friends from all over the world who have left messages and sent emails," wrote Annette Cazenave '79, "after the Towers collapsed, I couldn't get home so I am staying with a friend in Soho until they let us go below Canal Street. When they finally told us to get out of our building. they were handing out wet paper towels to hold over nose 54/3/2001 WWW.T-BIRD .E DU p . I I SEPTEMBER 11 ATTACKS .. .it was the it was the was the spring of Two Cities and mouth, and they told us to walk looking down because there were bits of steel and glass flying around. It was like the middle of the night, with about four inches of soot on the ground. When we got north of the Brooklyn Bridge, we were out of the wind drift and the sun was out, but there was an eerie silence. No one speaking, just walking slowly further north." Cazenave was one of thousands displaced by the attack, either in the affected dties themselves, or wherever in the world people found themselves stranded by the unprecedented ban on U.S. flights. And, once again, Thunderbird's global reach became evident. "[ have a place where you can stay in Austin," wrote Jens Rosmus '98, who works for Dell Computer there. Similar offers appeared for other places, Chicago, Seattle, Holland, Germany, Australia, Singapore .... Meanwhile, back at campus, hundreds of shaken T-birds gathered around the new 'Continents' sculpture - which was built to symbolize world peace and unity - for an evening prayer vigil. While white candles floated solemnly across the fountain and glowed in the hands ofT-birds whose eyes glistened with tears, students from more than 60 nations prayed together for the victims and their families - as well as for the safety of peace-loving Arab and Muslim brethren everywhere. "[ am proud to be a member of the T-bird network," Jennifer Crow '00 wrote on My Thunderbird. "My father was at the World Trade Center for a conference. He was evacuated safely, but was stranded in Manhattan without anything but the dothes on his back. Spedal thanks go to T-birds like Bill McKalip '99, who took in my dad and other T-birds and gave them food, shelter, and emotional support during this time. I During a healing memorial service, Haji EI-Khalil '00 solemnly read the name of each of the 85 countries that lost citizens in the attacks. As director of Student Services, Kahlil, a citizen of Lebanon and the U.K., was called upon to preside over the community event. am very grateful to him and all the wonderful friends I've met - and have yet to meet - from Thunderbird." "[t's comforting to be a T-bird at such a tragic time," wrote Rene Henson Bana '93. "Let's all learn from this experience and do whatever we can to put an end to such actions. Although it's difficu lt to feel helpful due to the distance that separates us, if we continue to show people of all nations, cultures, and beliefs that we truly can live together in peace, we will have at least done something. God bless all of those affected by this devastation. Our thoughts and prayers are with you." And so are the thoughts and prayers of all of us at Thunderbird. On October 11, staff, students, faculty, alumni, Board of Trustees members, and people from the nearby community solemnly drded The Continents sculpture carrying the flags of each of the 85 nations whose dtizens perished one month earlier. After each country's name was read, and the final, haunting notes of Taps were played, shaken people embraced and cried: 'Now, more than ever, this world needs Thunderbird: - LINDSEY MICHAELS • p. I 2 54/3 / 2001 RISKY BUSINESS Identifying, analyzing, and managing country risk BY PROFESSOR LINDA WETZEL, ADJUNCT' PROFESSOR, INTERNATIONAL STUDIES 9/ 11 On a telephone, a call for help. On his-tory's recent calendar, another "date that will live in infamy." On the island of Manhattan, another sort of crash. On the minds of nearly everyone, a world suddenly and terrifyingly fraught with risk. As mourners are repeatedly told, the business of life must go on. And the life of business does go on ... jittery, tentative perhaps, but onward. Business, like life, has always been risky and businesspeople have long sought ways of managing risk. After 9/11, that risk may at times seem overwhelming in its variety, magnitude, and lethality. But many risks can and must be identified, measured, and mitigated, if not eliminated. And like the fireman with his siren and the anthrax researcher with her microscope, business decision makers have specialized tools and skills to help them do their work of risk analysis and management. WHAT IS COUNTRY RISK ANALYSIS? When they hear the phrase 'risk management; many businesspeople think only about financial risk. Tradjtionally, that has been the type of risk considered most easily identifiable and manageable. Referring two years later to the lessons of the 1997-98 world financial crisis, for example, U.S. Federal Reserve Chairman Alan Greenspan said that it was "essential that we employ the current period of relative international financial stability to address as best we can some of the more evident short-run potentials for crises." (The New York Times, 13 July 2000.) Although Greenspan's immediate concern might have been financial risks, his antennae probed more widely. He, like others, was well aware that the financial dimension is not the only one in which business operations or investment may be seriously - perhaps fatally - vulnerable. Five days before Greenspan's remarks in New York to a meeting of the Council on Foreign Relations, a Times correspondent in Singapore had reported in an article entitled "Asian Oddity: Economies Up, Markets Down" that "analysts and fund managers attribute the sell-off [of Southeast Asian stocks and currencies] to a perception that Southeast Asia, despite an economic rebound, remains a dangerous place to invest because of political instability, corruption, and a lack of technological sophistication." (The New York Times, 8 July 2000.) Political uncertainty, cronyism, the skills and education level of the bulk of the local work force - such factors are the stuff of political (or socio-political) risk analysis. Assessment of political and social risk, along with financial and economic risk, constitutes 'country risk analysis: The country risk analysis performed in and for the U.S. private sec-tor had its genesis in the national security realm. The systematized, comprehensive analysis of country and regional risk originated in the U.S. Intelligence Community, which had been created to preclude 'another Pearl Harbor' but was being excoriated for having allegedly failed to anticipate the fall of Shah Reza Pahlavi's regime in Iran. Intelligence analysts designed a model that identified factors suggesting risk to the stability of political regimes of interest to Washington, provided mathematical formulae for quantifying such nebulous risks, and determined weighting schemes appropriate to a given country's unique mix of risk factors that produced an overall numerical 'rating: These ratings were provided in regular classified reports to senior U.S. officials who were responsible for managing risks to U.S. security and foreign policy interests. International business had discerned the need for such systematized assessment and analysis as well. The Economist was neither the first nor the last to address that need when it described a methodology for anticipating risk in an article entitled "Countries in trouble: who's on the skids?" which appeared on 20 December 1986. In its ranking of 50 countries from 'hyper risk' to 'low risk; that article attempted to do for its readers what the Intelligence Community had done for the U.S. policymaking community: model the appropriate analytic process. And unlike the Ie, which is prohibited from recommending or advocating policy, The Economist and other risk modelers intended that their methodologies suggest means of managing the risks described. WHAT ARE THE "TOOLS OF THE TRADE?" The key items in any risk manager's 'toolkit' are the various models and analytic approaches available. Some models - like The Economist Intelligence Unit's 1997 update ofthe model described a decade earlier and the International Country Risk Guide (ICRG), now administered by the Political Risk Services Group, Inc. - extrapolate potential future losses to business and investment from risk factors currently evident in the country under study. Inter-ethnic tensions, for example, even if they are not at present reflected in radical or violent behaviors, are assessed for their potential for destabilizing the regime, re-directing or diminishing economic assets, inciting the flight of human or other capital, etc. Other models map the intellectual 'cause-and-effect' leap of risk analysis in more complex designs. The Political Risk Index (PRJ) of the Business Environment Risk Intelligence (BERl) model, for example, projects the existence of risk factors in the future from that of risk factors in the present, and on that basis forecasts possible business losses. Although some might say that such a two-step projection is implicit in 54/3/2 0 O~I=------------ WWW. T - BI R D . E- D U p. I 3 p. 1 4 the EIU/ICRG approach, the model requires consideration that risk factors might change simply because of the passage of time. A country currently suffering inter-ethnic tensions may not eliminate such tensions within five years. But the tensions might, over that period, change character - from, say, the strong resistance of the indigenous population to a sudden influx of refugees to grudging acceptance of their partial assimilation several years later. The risk factor is still there, but the probability of consequent losses to business is less. The BERl Operations Risk Index (ORl) identifies risks specific to a particular industry, company, or investment in a country. The ORl's analytic approach projects risk not from the static existence of certain factors such as interethnic tensions, but from actions undertaken or behaviors prompted by those factors. The model would ask how are race-, nationality-, religion-, or other-based differences or disparities in a heterogeneous population handled? Are they ignored? Suppressed? Negotiated? Exploited? For a foreign-owned business that must manage an ethnically diverse labor force and customer base - and is itself another chip in the demographic mosaic - the impact of actions taken or avoided could be considerable. Thus, the ORl anticipates likely responses - or the lack of response - to 'facts on the ground' to suggest how such actions or behaviors might pose risks to foreign investors. The original risk model of the PRS Group pioneered the approach of projecting business risk in two steps: first, forecasting the political regimes most likely to be in power 18 months or five years out; and second, projecting the likely attitudes toward and treatment by those regimes of foreign investors. By forcing the analyst to envision the top three "candidates" for political dominance in the future, the PRS model prompts examination of beliefs, agendas, prejudices, and goals on the part of individual leaders, parties, and institutions whose decisions will affect the operation of foreignowned businesses in their countries. For example, a new prime minister elected by an ethnically diverse constituency on her promise to institute more inclusive policies and political practices might alter her country's risk profile significantly in the estimation of foreign investors. In addition to these commercially available risk modeling services, a number of companies - usually multinational corporations or other large business entities - maintain in-house risk assessment units that apply models or methodologies tailored to the specific needs of that company. A broad range of risk analysis and management services focused on nearly everything from time-specific travel advisories WWW.T-BIRD. EDU (like those provided by Control Risk Group) and customized in-country personnel security plans to sovereign credit risk ratings ([nstitutional Investor) and market sector forecasts is available to supplement or substitute for comprehensive country risk reports. The offerings of diverse risk management services are similarly rich. Insurers affiliated with governments (such as the Overseas Private Investment Corporation in the United States), international organizations (the World Bank's Multilateral Investment Guarantee Agency), and private agencies (A1G, Uoyd's of London, et aL) provide policies covering certain 'political risks' such as currency inconvertibility, nationalization or expropriation, and civil strife damage. Businesses can buy help in facilities design (including perimeter security and environmental management), personnel security training, governmental and community liaison, and even hostage negotiation. The most adept risk analysts and managers, however, do not rely exclusively on even the best and most comprehensive of the formal models. Such analysts utilize models to develop their own 'internal' analytic models, which - with exhaustive research, analytic rigor, and repeated practice - should be adaptable to virtually any country, region, or sub-national area and to any business, industry, or product line. When students ask me which model [ used when I was an analyst and manager/trainer of analysts at the CIA, I point to my head. HOW IS IT DONE? As an intelligence officer, [ used my head to analyze the risks posed to the United States by the former USSR. [ developed, adapted, and cannibalized various 'models' for assessing, among other things, economic perestroika and personnel changes in the top levels of the Soviet political leadership. Later, as an independent consultant, I drew on that experience as well as on my education in the Russian language and culture to forecast risks to such business ventures as proposed oil pipelines from the Caspian Sea and a processed food plant in the Russian Far East. As an instructor at Thunderbird, [ am in the enviable position of being able to leam as much as [ impart with regard to the art and science of business risk analysis. [n my 'Regional Business Environment: North America' class, I use the International Country Risk Guide to help students understand the nature of living and working in the United States, Canada, and Mexico. The students draw upon their own experiences in these countries or their perceptions from afar of their business and popular cultures to enrich such risk analysis with additional layers of insight. [ can describe the risk to Canadian tim- 54 / 3 / 2001 ber interests of Canada's trade with the United States, which even under the North American Free Trade Agreement limits timber imports to protect the domestic industry (according to the E[U model, the U.S. in this regard is a 'bad neighbor' for Canada and thus a risk). But only a Canadian citizen in the class can discern firsthand the potential risk to the warmth of the bilateral American/Canadian relationship caused by the fact that many Americans view Canada as their fifty-first state. [ can use a model to define the risk inherent in Mexico's per capita GOP's being six thousand US dollars lower than the United States', but students familiar with Mexico can describe the emotional as well as economic motivations behind the life-anddeath risks of illegal migration. Risks as well as opportunities are examined in the 'Business Intelligence and Corporate Security' course. A newer and still evolving discipline, business (sometimes called corporate) intelligence aspires to understand a business operating environment in its entirety, subsuming actionable risk analysis. The losses threatened by an inadequate understanding of one's own business environment or by an inability to protect it from another's efforts at such understanding are many and varied. Thunderbird also offers a 'Winterim' program in Washington, DC on U.S. foreign economic policy. This January - not far from the damaged Pentagon - U.S. and foreign students will again be able to hear the views of business, political, and NGO decision makers on risks and opportunities created by the u.S. Government's alliances and relationships worldwide. Last January, experts on antitrust law enforcement and on the international narcotics trade were added to our speakers array. [n my 'Political Risk and Global Change' class, the full range of analytic and risk management challenges is grist for discussion. Student projects have included one that conduded that the risks to foreign businesses in Algeria - where violence perpetrated by some religious extremists continues to flare, earning the country a negative overall risk rating in most models - actually vary widely, from prohibitively high in densely-populated areas on the Mediterranean coast to nearly negligible in the desert interior, where foreign-owned oil and gas businesses operate. Another student discovered to his surprise that the greater risk to U.S.-owned businesses in Russia was not mafiarun protection rackets but official tax collectors, who profitably target businesses not owned by Russians and others highly skilled at evading authorities. Several students had been intrigued by their study of countries in which corruption has long been regarded as part and parcel of doing business - before tighter integration 5 4 / 3 /2 001 into the world economic network has prompted reconsideration of the risks to their domestic econo mies of foreign investo rs' preference for transpa rent business environments over those clouded by bribery, nepOlism, and related behaviors. Recent discussions in the political risk class have, sadl y, cited mo re U.S. examples than ever before. Students currently applying models to the U.S. oil. banking, and pharmaceutical industries are lea rning that long-recognized risk factors such as environmental acti vism, merger-and-acqui sition trend , and drug safety regulations have been joined by risks attributable to physical location (World Trade Center offices were once coveted), the efficiency and privacy of postal services (what if those envelopes containi ng anthrax spores had ended up in the - excuse tile expression - dead-Iet- WWW.T - B IR D . EDU ter offi ce?), and reactions abroad to the spread of 'decadent' U.S. popular culture. SO WHAT? Sound risk ana lys is is the criti cal first step in effective risk management, but it is only the first step. If analysis does nOl suggest - explicitl y, in good business inte lligence, or indirectl y, in nati onal security intelligence - methods of managing the phenomena it describes, it is a sterile intellectual exerci e. International busi ness managers do not have the time to play parlor games; they must manage and pl an for their busi nesses. At Thunderbird, teaching effective management of risk is a core com petency. Professor John O'Connell's course "International Risk Management and Insurance" highlights the va riety of means of risk management. from p . 1 5 buying political risk insurance to designing evacuation plans for expatriate employees. In my course 'Political Risk and Global Change; risk a nalysis models provide the skeleton on which the living tissue of management options and risk-sensitive stra tegic planning is hung. Indeed, Thunderb ird curricula are permeated by the awa reness of risks to business - posed by anytlling from a maladroit colloquialism in the native language to a market entry plan 'blind' to xenophobic sentiments - and creative thinking about them. Thunderbird graduates are panicularly well equipped to confront the risks and chall enges tllat inevitably will arise in the global marketplace. They are among the visionaries who will help ensure that 9/ 11 began not just an era of heightened risk but of braver and better handling of that risk. • p. 16 THE LAN Can you speak it effectively? By WILLIAM KING, ASSOCIATE PROFESSOR OF BUSINESS COMMUNICATION Foreign language skills can open doors for those who want to work in global companies, especially those who hope to work for branches where their native tongue is not spoken. But, because English has, in fact, become the 'lingua franca' in many countries, why should anyone who already speaks English invest the time and energy to learn a new language or improve their English as a Second Language skills? Because truly knowing the language and culture of world business involves far more than basic grammar and conversation skills. In a September 24, 2001 Business Week article, Nick Oakley, vice president of a large London recruiting firm, said: "It's all about credibility and building personal relationships. It is a reality that if you know English, then you really do not need to learn a foreign language, but it undeniably gives you a personal and professional edge." That 'edge' is something Thunderbird has understood for more than 50 years. It's why the School has mandated a tripartite curriculum for its Master in International Management (MIM) students - requiring them to become 'fluent' in a core business function (finance, marketing, etc), a geographic region (Asia, Europe, Latin- or North America, etc.), and at least one language other than their native tongue. So, even though the School now offers an MBA option that doesn't require additional language training - for those who believe their current language skills to be sufficient - it doesn't mean that language and culture training aren't still very much alive and well at Thunderbird. This past year has been a busy one for Thunderbird's language faculty; we needed to somewhat 'reinvent' our products to better serve the changing marketplace. In Summer 2000, a consortium of faculty helped develop new products for the Institute for Languages and Communication at Thunderbird. While continuing to teach its regular and advanced MIM courses, the faculty added several intensive language programs to its product mix - all designed for WWW.T - BIRD . EDU time-stretched business people and pre-MBA or MIM students who can ill afford to take a lot of time off to learn a new language. These programs employ either an intensive, six-week format or a shorter immersion travel one. IMMERSE YOURSELF The first Intensive Language Program ran this past summer. The program was designed for incoming Fall 2001 trimester students with sec- 54 / 3/2001 ond language needs, as well as for current Thunderbird students who wanted to start or continue a third language. Intensive Language Program students took Fundamentals (grammar and conversation) at the first two levels, depending on their previous language abilities, in anyone of the following languages: Chinese, English, French or Spanish. The program compressed the normal 18 weeks of instruction into a six-week language learning 54 / 3 / 2001 experience. Classes met two to three hours per day - before or after work - and also included extra practice sessions, informal meals around 'language tables: and cultural discussions. Students earned 4.5 credit hours for each course - which they could apply toward their MIM requirements, their MBA electives, or toward Thunderbird's IS-credit-hour Certificate of Advanced Studies option. "I found the Intensive Language Program to WWW.T - BIRD . EDU far exceed my expectations," said Victor Goodin, a Summer 2001 program participant. "The interactive nature of the course enabled me to absorb a tremendous amount of information in a short period of time. I feel that, after only six weeks, I have an excellent grasp of the fundamentals of Spanish from both a written and oral perspective." Directed by Dr. Guiomar Borras, the Intensive Language Program targets two groups: p . 17 those who stay to complete a formal masters degree (and reap the additional benefit of acclimating to campus life before full-time classes start) and working professionals who want the strategic business edge that results from foreign language training. "Our immersion-style Intensive Language Program courses will now be offered in all of the languages for which Thunderbird is famous - Arabic, Chinese, English as a Second Language, French, German, Japanese, Portuguese, Russian, and Spanish - as demand warrants," Borras said. TRAVEL PROGRAMS The Institute for Languages and Communication, which is a part of the full-time degree unit at Thunderbird, is also developing a series of seven to 12-day travel programs for language and culture study. "Similar to Thunderbird's longer Winterim programs, The Short Trips Abroad program provides Thunderbird alumni and the public with a blend of focused cultural and professional experiences not usually found in other types of travel abroad programs," said Dr. Carmen Vega-Carney, who directs that program. Planned offerings include: Ch ina 2002: Traditional Chinese Medicine in the 21st Century; Chile, Argentina, Peru 2002: Discover Opportunities in These Emerging Markets; Cuba 2002: Positioning Professionals for Cuba in the 21st Century; and Venezuela: The Secret Pearl of the Caribbean. Scheduled for May 2002, the eight-day China trip will show participants the importance of traditional Chinese medicine in the Chinese culture. After a half-day seminar, participants will visit hospitals and institutions practicing traditional Chinese medicine in Beijing. Given the expansion of trade agreements such as Mercosur, Argentina, Chile, and Peru are fast becoming major South America business spots. Thus, this seminar includes visits to leading companies, and meetings with important business and government leaders in all three countries. It also includes cultural activities, including a visit to the sacred Inca city of Macchu Picchu, located high in the Peruvian Andes. The Cuba trip allows participants to experience a new market in its earliest growth and provides for substantive interaction with Cuban managers. This experience allows a unique opportunity to develop knowledge of Cuba's new and emerging industries and to see firsthand Cuba's unique and changing business environment. The lO-12-day Venezuela trip combines a language immersion program with a country overview. The trip will take students to Caracas, Merida, and Canaima, enabling them to experience incredibly diverse regional landscape p . 1 8 and dialects. Students will attend four hours of daily language training, followed by afternoon outings that include a visit to Angel Falls, the world's tallest waterfall, and a ride on the world's longest cable car - which climbs to an altitude of 4,765 meters. "Be it for political reasons, or for the simple matter of geographic distance from many points of the globe, some of these cultures will remain sheltered from the world at large for some time to come," said Vega-Carney. "Thunderbird's prime position of leadership in international business, language and culture studies, and research, makes these kinds of highly memorable trips possible." ENGLISH AS A SECOND LANGUAGE (ESL) But, at Thunderbird, where more than half the students come from outside the U.S., 'foreign' language training also means 'English language and North American culture training: To meet this growing need - at Thunderbird and beyond - the School continues to pioneer an assortment of creative and well-received, new English as a Second Language courses for advanced speakers. Just like their Spanish, French, German, etc. equivalents, advanced English language courses at Thunderbird go far beyond simply teaching the vocabulary and grammar of target languages. They also teach about the daily business practices and cultural nuances of the people in those countries. For instance, during this past year, Thunderbird's language faculty created and delivered an advanced business communication course, as well as a 'capstone-level' managerial communication course for international executives for whom English is a second language. Students in such classes learn about American timelines, work habits, and communication styles. They might also use advanced computer applications, write a business plan, learn crisis- WWW.T- BIRD .EDU Bill King's ESL students learn much more than advanced English. They may also write a business plan, learn how to manage the U.S. media, study labor laws, and utilize advanced technology. plan to enter an English language graduate business school program. Offered three times each year - in the Spring, Summer, and Fall - the Pre-MBA Intensive Language Program provides individualized instruction in classes comprised of six to eight members and attracts more than 150 students per year. Program focus areas include: • Conversation Skills: practicing formal and informal conversation for everyday situations, developing executive style presentations, and working on pronunciation. • Critical Listening Skills: enhancing businesslistening skills, note-taking skills, as well as listening strategies for social interactions. • English for Corporate Interaction: building discussion skills and a broad business vocabulary through the careful use of special business readings and the 'case- study' method. • American Culture Orientation: exploring key elements of American culture, including values, non-verbal communication patterns, relationships, family life, and education. • Strategic Reading Comprehension: enhancing reading skills through learning and practicing reading techniques. 54/3/2001 Besides receiving intensive language skills training, participants also benefit from numerous company visits and cultural outings. That's one reason the program routinely attracts recently transferred executives who need a quality English immersion experience. The Thunderbird Language and Culture Center - part of Thunderbird's Executive Education unit - also provides custom oneto two-week language and culture programs for those seeking a quality Arabic, Chinese, French, German, Japanese, Portuguese, Russian, or Spanish immersion experience, as well as those needing regional business expertise in Asia, Europe, Latin America, North America, the Middle East and/or Africa market practices. THE BOTTOM LINE Armed with the knowledge of how to truly 'speak' the language and culture of world business, Thunderbirds are uniquely positioned to successfully 'parachute' into foreign lands - and to both build real friendships and work there efficiently and ethically. Given the tragedies of recent months, such skills can only be a plus. • FOR MORE INFORMATION about Thunderbird's language and culture programs, please contact: • Institute for Languages and Communication programs: Dr. Jutta Ulrich, email@example.com or (602) 978-7266. - Intensive Language Programs: Dr. Guiomar Borras, email@example.com or (602) 978-7284. - Short Trips Abroad: Dr. Carmen VegaCarney. firstname.lastname@example.com or (602) 978- 7282. - English as a Second Language: William King, email@example.com or (602) 978-7277. • Pre-MBA Intensive English and custom Thunderbird Language and Culture Center executive programs: Beth Stoops, stoopsb@tbird. edu or (602) 978-7779. related media management tech- ADVANCED . FOR - CREDIT BUSINESS / LANGUAGE OFFERINGS niques, discuss American sexual harassment law, and experience an American-style performance review. PRE -M BA INTENSIVE ENGLISH AND OTHER PROGRAMS For the many foreign students who want pre-advanced, intensive language preparation prior to entering an MIM or MBA program at Thunderbird - or elsewhere - the Thunderbird Language and Culture Center offers an outstanding PreMBA Intensive English Program. This lO-week, 25-hour-per-week program is designed especially for non-native English speakers who ADVANCE~ 'LANGUAGE' COURSES ARE COUNTRY-SPECIFIC BUSINESS PRACTICE AND CULTURE CLASSES THAT ARE TAUGHT ENTIRELY IN THE TARGET LANGUAGE. AR5200 Arabic Business Communication and Documentation CH5201 Advanced Chinese for Business CH5750 Chinese Oral Business Language CH5302 Contemporary Political, and Economic Issues FR5202 French for Management FR5511 French for Marketing FR5512 French for Advertising FR5513 French Business Intelligence FR5514 French for Finance FR5515 French Corporate Culture FR5516 French Human Resource Mgmt. FR5517 French Project Management FR5518 Import-Export in France GE5201 Major Topics in Central Europe GE5303 Contemporary Social, Political. and Economic Issues GE5304 Environmental Policies and Issues GE5305 German for Strategic Mgmt. GE5511 German for Marketing GE5514 German Finance jA5202 japanese for Corporate Mgmt. jA5303 Contemporary Political, and Economic Issues jA5751 Advanced japanese for Business RU5204 Seminar in Corporate Structure and Business Culture of Contemporary Russia/CIS RU5306 Case Studies in Contemporary Industry SP5201 Major Topics in Latin America SP5202 Spanish for Management SP5370 Analyzing Sustainable Business in Latin America SP5220 How to Do Business in Mexico SP5303 Contemporary SOCiocultural, Political. and Economic Issues MLS898 Selected Research Topics 54 / 3 / 2001 WWW.T - BIRD . EDU p.19 'ENLIGHTENED SUBJECTIVITY' Thunderbird's core competency I chose Thunderbird over more traditional MBA programs because I believe international business is inherently interlinked with history and culture. There are many students, faculty, and administrators who question the efficacy and relevance of Thunderbird's tripartite curriculum. They debate the value of mixing the study of the IMF and comparative re.ligions with investment and asset valuation theory. Never before in human history has the outcome of this debate been more relevant. That curriculum creates enlightened subjectivity and perpetuates the School's founding premise: Will Warne '99 BY WILL WARNE '99 that understanding multi-culturalism is essential to world peace. Since graduating in 1999, I have traveled 220,000 miles managing a project that spans five continents and 50 countries. Most of my successes and failures can be directly traced to my ability or inability to evaluate the interrelationships of culture and advantage that is almost immune to replication because it is both infinite and personal. It enables a person to see and understand something in a way that no one else does. Value is added by seeing and understanding something in a new or unique way. It comes from connecting otherwise disparate variables into an effective strategy or commerce on decisionmaking. To attempt international business without a comprehensive understanding of the myriad influences that shape the interpersonal landscape in which you work is like trying to understand the patterns of stars with " D course of action. By reduc- OING BUSINESS IN CHILE ing business school to the WITHOUT KNOWLEDGE OF PABLO NERUDA OR IN ASIA study of tangible attributes, traditional MBAs become an assembly line for opinions and practices that are more geared to value dilution than creat ion. Students emerge after two years with a commercial dogma that is WITHOUT EXPOSURE TO BUDDHISM REDUCES YOUR WORK TO TRANSACTIONAL PROCESSES." your eyes dosed. Today's business is not only global but also increasingly democratic. That means people at every level within an organization have an increasingly potent impact on a company's success. It also means that the historic and cultural influences that shape the perspectives and decisions of these people are more acute. As individuals are given more freedom to articulate their opinions and goals, they are simultaneously expressing the sometimesinaudible signals of their country's socio-economic experience. These signals are defined by re.ligion, language, colonialism, geography, di-mate, and national aspiration. One of my happiest days at Thunderbird was spent translating a Pablo Neruda poem in Spanish dass followed by a Net Present Value struggle in Finance. I was thrilled because the juxtaposition of commerce and culture was an honest reflection of what I had already encountered in my exposure to international business. Doing business in Chile without knowledge of Pablo Neruda or in Asia without exposure to Buddhism reduces your work to transactional processes. Any company or individual with enough time or motivation can easily replicate, if not improve, a company's transactional approach to commerce. But how does anybody replicate the unique cultural insight that an individual may bring to the decision-making sequence within a large, multi-national project or deal? Cultural awareness creates enlightened subjectivity - a true comparative often narrowly conceived from formulas, graphs and Western-centric concepts. Students must combine the finite themes of business school with the infinite issues of multi-cultural ism. Enlightened subjectivity is the force driving that synthesis of ideas and experiences. For example, a student may question the applicability of traditional asset-based accounting practices in countries with limited asset-based record keeping or judicial systems. From this questioning and insight may come a new way of valuing projects or products that leverages the best of traditional business principles with the realities of a country's historic experience and institutional attributes. Since the day General Yount conceived Thunderbird, the School's mission has been visionary. It is why students and faculty continue to dearly argue in favor of mixing culture, language, and finance. None of us can articulate exactly how knowing a country's history or the themes of its greatest poets gets us doser to winning an important deal or managing a project successfully - but it does! The businessperson who possesses enlightened subjectivity is constantly listening for the un-spoken words - the subtle hand-gestures and placement of people around a table - to calculate the best course of relative action. Thunderbird's curriculum, combined with long-term interactions with students from throughout the world, empowers T-birds so that we can hear and see cultural indicators where our competitors cannot. This is the core competency of Thunderbird - and Thunderbirds. • p . 2 0 WWW.T - BIRD . EDU Referring qualified students is the most important thing alumni can do for Thunderbird BY JESSICA McCANN A modern, comprehensive curriculum is the cornerstone of an advanced business degree, and the faculty who deliver it must be superb. Of course, state-of-the-art facilities and technology are needed in today's competitive learning environment. Philanthropic support, community involvement and marketing acumen are also necessary to keep a school ranked among the best in its discipline. But one could argue that the most critical need of any school is students- exceptional students. And what makes an exceptional student when it comes to Thunderbird? Who better to answer than its 32,000 alumni worldwide. "They've been here. Alumni know what it takes to make it at Thunderbird," said Judy Johnson, dean of Admissions and financial aid at Thunderbird. "But more importantly, they know what it takes to make it after Thunderbird, in the highly-competitive international workplace. " That's exactly why Thunderbird has launched a new program reaching out to alumni and encouraging them to refer potential students - because without a constant influx of quality students any school would lose value. "At Thunderbird, the work experience and zest for international life our students bring provide an added value to faculty and members of their dass," said Johnson. "So, referring potential students is the most important thing alumni can do." Those referrals go directly to the Thunderbird Office of Admissions where the staff personally follow up with candidates and the alumni who referred them. The goal is to establish a personal connection and to foster ongoing communication among the candidate, alumnus, and School staff. As a result, the candidate soon learns that Thunderbird isn't just a place to earn a degree; it's a community and a lifelong connection to the most expansive alumni network in the world. The value becomes immediately dear. Alumni have a vested interest in referring the best and brightest prospects to the School. too, because every new graduate either increases or decreases the perceived value of a Thunderbird degree. On a more personal level. becoming actively involved with potential students can help alumni stay focused on why they themselves chose Thunderbird. "When you come out of Thunderbird, you're still on a high from the experience," said Lynn Campbell '92, global director of human resources for F1extronics in Dallas. "Most people leave when they're not ready to leave, and that's a good thing. But then you're thrust into a highly competitive global business environ- 54/3/2001 ment and there's the potential of getting discouraged or questioning your career goals. "When you have the chance to associate with somebody who is thinking of going to Thunderbird, it gets you talking about the positive things about the School. It reminds you of the reasons you went to Thunderbird, and keeps your focus on the longterm," said Campbell. While in Seattle, Campbell and the local Thunderbird Alumni Association chapter regularly obtained a list from the Thunderbird Office of Admissions of people in their area who had applied. They then invited those potential students to First Tuesdays. "This ended up proving to be a great way for people to feel the bigger part of Thunderbird, " she said. If such reward can come from interacting with strangers considering a Thunderbird education, imagine the personal reward of referring someone to the School with whom you already share a common bond. "Ultimately, we would like alumni to direct people to Thunderbird whom they already know and respect on a professional level," Johnson said. "Someone they would be comfortable saying. 'I would like for this person to become part of the T-bird community:" • WHAT A T-BIRD NEEDS Things to keep in mind when referring a potential student to Thunderbird: • GMAT scores of 550 or better-this score should validate adequate verbal. quantitative and analytical skills • Work experience in the professional marketplace- has this individual proven his or her abilities at a junior- or mid-management level? • Participation in extra curricular activitiessuch activities give you a good sense of this person's leadership qualities. To refer a potential student to Thunderbird go online at My Thunderbird, http://my.t-bird.ecIu, or use the referral card enclosed in this magazine. If you have any questions, please contact the Thunderbird Office of Admissions at 602-978- 7100 or admissionsCiDt-bird.edu. so, you dream of living in Europe. You fancy a job as an investment banker in Geneva or London. Or you think a couple of years marketing consumer goods in Spain would help your career. You've been to Europe before, and really enjoyed it - maybe you even speak a European language. Images of sunny sidewalk terraces and bustling financial centers start to fill your dreams. But a twelve-countries-in-four-weeks trip your junior year in high school can't begin to prepare you for the thrills and challenges of living and working full-time in Europe. Do you really know what the business culture in Spain is like? Or why the European markets differ from the New York Stock Exchange? Or how political demonstrations in Germany can affect your sales targets in Turkey? Or perhaps you are European - and you already speak two or three languages - but you want to get a better sense of the overall European market, not just your home country. You feel that an American program will give you the best in management education, but you don't want to come away with an 'American- centric' point-of-view. If your goal is a career in Europe - or even just a better understanding of the European market - you can give yourself an edge by attending the Thunderbird Europe, FrenchGeneva Center. Located in Archamps, France, a mere stone's throw from the Swiss border, Thunderbird Europe is only minutes from downtown Geneva - and, by extension, from the rest of Europe. Here students study European business with professors who are themselves nearly all practitioners. They supplement dassroom teachings with trips to foreign capitals - for both learning and pleasure. Thunderbird established its European center in 1993 in order to further its global reach and offer its students the opportunity to experience Europe first-hand. Situated in an international business park in the Haute Savoie, (France's second largest region) Thunderbird Europe offers students an unprecedented opportunity to live, work, and play in an environment which combines the rigorous educational standards of a first-dass American educational institution with the cultural advantages of a truly international student base, faculty and setting. "Students here get the benefit of a Thunderbird education, exactly as they would in Ari- zona, but they also have the added value of business, cultural. and political exposure they ca n't get in the U.S., " said Dr. Ya hia Zoubir, the program director for Thunderbird Eu rope. "It's not just abou t learning Frend1." Students come to Thunderbird Europe for a number of reasons. Some wish to live in Fra nce so that they can truly learn the language both inside and outside of dass. Some come to study with particular professors whose fame has spread to the other side of the Atla nti c. Others want to gain an in-depth understanding of the business and cultural environment in Europe by studying and traveling here. Still others come merely to escape the llO-plus-degree (F) summer heat of the Arizona desert - where Thunderbird 's main campus resid es. "I m ose Thunderbird because it is an American smool wi th a European campus, whid1 lends more cred ib ility to its international curriculum," said Shelley Collum, a first -trimester French-Geneva Center student. Traditionally, students came to Europe after having spent one o r more trimesters in Glendale, but as of September 2001 , they can now start directly at the Thunderbird Europe site. For those who wish to start in Europe, there is one entering dass every yea r, in May. Both the MIM (Master of International Management) and MBA degree tracks are offered in Armamps. Entering MBA students currently spend one trimester in Europe before going to main campus. Entering MIM ca ndidates can spend up to three trimesters in Europe (depending upon individual ci rcumstances) before completing their final 15 credit hours in Arizona. One of the advantages of the Thunderbird Europe campus is its small size. "I chose the Archamps campus because I am more comfo rtable in Europe," said Chetan Baboor, a new student from India. "This is a small, intimate community - it's more like a fa mily. And also, because it is sma ll er, you get more personalized dasses, with more time to yourself to think, study, and travel. " Frenm-Geneva Center students receive the same qua lity education and learn from the same level of internatio nal faculty for wh im Thunderbird is renowned. "I am very impressed with the facu lty here in Archamps. Being on a sma ller campus is a great way to have dose academic relatio nships, real ly get to know your professo rs," said Todd Kirkbride. "Plus your professors are right in the thick of things. Armamps is essential for anyone interested in Europe." While many professors rotate over from main campus, mum of the faculty is local - with many continuing to team while working fu ll time in industry. Dr. Francois-Serge Lhabitant, for instance, works for a major Geneva bank and tead1es fin ance and investment banking. Dr. Ivor Roberts, who just retired after 30 years of working fo r the European Commission, now teames Regional Business Environment: Europe. Dr. Ken Ferris, the MIM program director and a Glendale-based professor of finance and accounting. now in Archamps, said, "I have found the quality of the local faculty to be excellent, and the fact that they are practitioners means that students benefit from their realworld experience every day in the classroom ." Frend1-Geneva Center students also benefit from the same extensive resources they would find at main campus. They use the online My Thunderbird platform, access a wide va riety of o nline databases th rough IBIC (International Business Information Centre), borrow books from the library th rough the weekly intra-campus courier service, and have career advising. academic advis ing. and alumni relations services on site. Unlike some overseas experiences where students can be out of touch with their home base, students in Armamps work just the same as if they were on the main campus, and are in continual contact with their colleagues and friends in Arizona. French-Geneva Center students also have access to a number of resources unique to the Thunderbird Europe campus. For example, Geneva is home to many international organizations, such as the International Red Cross and the ITU (International Telecommunications Union). Each trimester students tour both the wro (World Trade Organization) and the UN, where they can apply for reader's cards that give them access to the UN library - an excellent resource both for doing coursework and for meeting other internationally minded people. Thunderbird Europe also organizes at least two corporate site visits each trimester. Sometimes these take the form of day trips to local companies. Past visits have induded Swatch, Hewlett-Packard (HP), Rossignol, FlFA, and Nestle. On other occasions seminars have been given by local experts on subjects ranging from competitive intelligence to offshore banking to the global shoe industry. French-Geneva Center students have also taken in-depth looks at emerging markets through four-day trips to Budapest, Frankfurt-am-Oder, and Istanbul, where they visited local companies and historic sites, and met Thunderbird alumni. WWW.T-BIRO : EOU Lest you get the impression that Thunderbird Europe is all work and no play, rest assured that is not the case. Cultural opportunities abound, of course, and students make the most of them. One recent group organized a visit to Beaune, the heart of France's Burgundy region, to learn about the local economy - which induded a guided tour of one of the largest commercial wine cellars in the region. Because Geneva is so centrally located, travel is an important part of any European stay. Zurich, Paris, and Milan are only three hours away by train - London, Amsterdam, and Barcelona only an hour and a half away by air. There are a number of low-cost airlines based in Geneva, and rail connections to anywhere on the Continent are excellent. There are excellent adventures dose to home as well - whether it be dimbing Mont Blanc or skiing at anyone of the many ski resorts within an hour's drive. "It's a great lifestyle, one alumnus said. "There's music all summer long, and I can ski and play golf in the same weekend. Why would I want to live anywhere else?" For those interested in extending their European stay through either an internship or full-time European job, many resources are available. Cynthia Zoubir, director of Admis-p. 2 3 sions, serves as the CMC (Career Management Center) representative for Thunderbird Europe, and she is always willing to offer advice and assistance. "Internships are out there; those who make the effort and apply themselves generally find opportunities," she said. Some of the internship opportunities that students have found have induded offers at J.P. Morgan Chase in Geneva, Delphi in Paris, HP in Grenoble, and Accenture in Zurich. Shelby Kardas is one student who came to Europe for career opportunities. "I always knew I wanted to come to Archamps," said Kardas an Idaho native. "It just seems to fit with the Thunderbird mission. I also knew I wanted an internship in France so that I could work in France and speak French. I found that actually being in Europe was crucial to finding an internship; being in France really puts you in the mindset." Kardas is spending six months working for T-bird alumnus, Ed Pierce '91, at his Internet company. In addition to career advice, Cynthia Zoubir offers all incoming students an invaluable resource: her European Career Management workshop. The half-day seminar covers all aspects of the European job search, such as differences between an American resume and a p. 2 4 European 0/, how to handle difficult interview questions, and realistic job hunt expectations. Students can also seek help from alumni. One of the key elements of th e Thunderbird experience is the worldwide alumni network. With over 32,000 alumni working for more than 12,000 companies in 135 countries worldwide, the network is truly unique. Students at the French-Geneva Center can access alumni contacts in nearly any country/ind ustry/ company that interests them. "I have also found the local alumni to be very friend ly and willing to help in whatever way that they can," said Michelle Learned, a current student now on a Zurich internship. One of the best aspects about coming to Thunderb ird Europe is that it makes the transi tion to a European lifestyle easy. Accommodation is pre-arranged for incoming students, making the arrival into a new country as painless as possible. Students choose between three corporate apartment complexes - one right next to the campus and the other two located closer to Geneva and linked to the campus with a daily bus service. Of course, those with an independent streak can find their own apartment or set themselves up with a local family. Said Ferris of his experience, "Living here is easy. It's not all that hard to pick up survival French. It's surprising how multi-lingual people here are; it's velY easy to get by." In terms of legalities, U.S. nationals obtain student visas that are good for three months - and renewable for up to 12 months. Once students arrive on campus, Marie-Laure Kienne, the administrative director, and Chantal Aublet, the program coordinator, manage that process As administrative director, Kienne also handles registration, tecllnological issues, and is the liaison with the Glendale campus. Aublet serves as a student resource - answering questions ranging from where to find Chinese cooking ingredients to how to get to the French Riviera. Together, they do everything possible to ensure that students have the best experience possible during their European stay. Temporary residents on student visas are allowed to take internships, and to get paid for them. Regulations differ from country to country, however, so candidates should work closely with their future employer - and be patient! Thunderbird Europe may be a small campus, but it is growing - rapidly. The school currently occupies a 17th-century farmhouse in the beautifully landscaped setting of the business park. ow, however, due to continued expansion, Thunderbird has outgrown its facilities. Construction recently began on a new building that will more than double the existing facilities. Scheduled for third quarter 2002 completion, the addition will house four auditoriums, four classrooms, and 12 breakout rooms, as well as state-of-the-art audio, visual, and Internet facilities. It will also accommodate Executive Education clients - for whom Arch amps will become a European training base. A 90-room, three-star hotel is being built on-site for them. Although small compared to main campus, Thunderbird Europe offers the same quality Thunderbird experience. Students reflect as much cultural and educational diversity as those in Arizona. While, naturally, the opportunity to live and study in Europe attracts many non-Europeans, the French-Geneva Center can also be the perfect alternative for Europeans who want an American degree but who aren't necessarily ready to go to the U.S. Thunderbird Europe is definitely a total immersion experi ence - living, studying, working, traveling, first-hand exposure to the cultural and businesses. It's all there for the adventurous I • Cynthia Zoubir knows the secrets of securing jobs In Europe. Contact her at zoubirc@tbird. edu or +33-450-31-56-63 for more information about Thunderbird. 54 / 3 / 2001 WWW.T - BIRD . EDU p. 2 5 COMPANIES STILL RECRUITING AT THUNDERBIRD Nearly 90 companies had signed up for Thunderbird's annual Career Fair - so many, in fact, that Thunderbird had to divide the group in two. Half would come Monday through Wednesday; the other half Wednesday through Friday. Then, the September 11 attacks occurred - prompting many companies to implement temporary travel and recruiting bans. Despite all that, more than 50 companies still attended this year's Fair, held October 1-5 in Glendale. Baxter, Bayer, the Central Intelligence Agency, ConAgra, EchoStar, Ernst & Young, Hilti, Intel, Kimberly-Clark, Microsoft, Siemens, UPS, and Western Union were just a few. The Fair's three-day format of company presentations, followed by a day of trade show booth visits, followed by a day for interviews, again drew rave reviews. "Given recent corporate layoffs, hiring uncertainties, and all the travel restrictions that resulted from the attack of September 11, which was just three weeks ago, we were extremely pleased by the number of companies that committed to coming to this Fair," said Kay Keck, vice president for career and professional development. "We also know that the companies that did come had an outstanding experience. They continue to really be impressed with the quality of our students and to like the Fair's format." Combined, those recruiters collected nearly 7,000 resumes and conducted 660 interviews. Others scheduled later interviews. BY LINDSEY MICHAELS Alumnus Maulik Prekhi '00 talked to T-birds about career opportunities at EchoStar - which just bought DirectTV. Kimberly-Clark was especially popular with students; the booth seemed to always have a 1O-15-person waiting line. "I think people were attracted to our booth because Kimberly-Clark is a very popular consumer goods company with many very well-known global brands," said Carlos Moreno '00, a special projects manager who flew in from Costa Rica for the Fair. He and fellow recruiter, Eduardo Grauer '00, an international marketing associate, who flew in from Altanta, were filling jobs in Latin America. "I saw a lot of talent and a lot of people with some very impressive backgrounds, Moreno added. "They were people with passion and perseverance, but also people with the type of cross-cultural awareness to know exactly what messages to convey to which customers in each market. For instance, in our Pampers line, we focus on creating the image of a happy, independent baby, but what constitutes 'happy and independent' Kimberly-Clark sent two alumni, Eduardo Grauer '00 and Carlos Moreno '00 to recruit. differs greatly in, say, Ecuador and Costa Rica. T-birds understand that fact." "Saying you're global, and actually understanding how to do business in other parts of the world are often two really different things," Grauer said. "Carlos and I know that Thunderbirds are in that second group, which is why we - and otherT-birds within our company - are working very hard to ensure that Thunderbird remains on KimberlyClark's 'A list' for recruiting - not just for international jobs, but for our domestic ones as wei!." 'Thunderbird is one of six select U.S. schools we recruit from," said Knut Baalerud '90, who works for UPS. "We've hired T-birds for 10 years now and keep coming back based primarily on their superb records of performance. Their flexibility, diversity, tenacity, high level of selfmotivation, and depth of expertise make them very 'in demand' within many different departments at UPS." Thunderbird's students also like the Fair's format. Most were grateful to the companies that attended this year's event - even though they sensed their uncertainties. Given the environment we're now living in, I think it was a great Fair," said Nicolas Amaya '01, a Colombian citizen who is also authorized to work in the EU. "Despite the tragedy, many companies still came, although most were probably in marketing since many of the New York financial institutions were still facing travel uncertainties." Amaya obtained more interviews than any other student at this year's Fair. He credited his three years of brand management with Unilever, as well as his recent sixmonth internship with Kellogg for his popularity. But, he said, he'd also prepared himself - defining his strengths and company criteria, and then focusing all of his attention on those companies. "Searching for a job isn't just one party's responsibility; it has to be a joint effort on the part of CMC (Career Management Services) - which attracts good companies to Thunderbird, and the students - who must prepare themselves to seize good opportunities," said Angel Wang '02, a Chinese nationa!' 'The Career Fair is a superb joint effort in that regard ." • T ~ ',~ ~ ." .~ ,~, ': ~3,: p . 2 6 54 / 3 / 2001 '. ' , ~n--, • ." SUPPLY CHAIN MANAGEMENT IN SOUTHEAST ASIA From the bustling streets of Bangkok to the tranquil riverbanks of the Mekong Delta to the towering skyscrapers of Singapore, Dr. Winter Nie led 21 T-birds from six nations on an interesting supply chain management Interim to Southeast Asia. During the three-week course, we gained firsthand insight into doing business in this culturally and economically diverse region of the world with on-site visits to over 15 companies in Vietnam, Thailand, and Singapore. Although each visit provided a unique perspective on supply chain management, common themes soon appeared that dosely reflected the level of economic development of each country. Vietnam, for instance, is a communist sodety with a population of 79 million-twice that By KRISTI KRAMERSMEIER '01 & TREVOR OLSEN '02 of many Western European countries. But with an annual GOP of only $140 per person, laborintensive operations are still very much the norm. One famous example is Nike, which takes its role as the largest non-government employer in Vietnam very seriously - as we discovered when visiting the Dona Victor Footwear factory. Earning about $64 per month, not only are the factory employees paid more than most local teachers and doctors, but they are also trained directly by Nike and cared for at the on-site healthcare center. Nike, in return, benefits from the flexibility of labor-based batch processing which is essential to producing 6,000 different styles of shoes each year. Another challenge in a developing country such as Vietnam is the lack of infrastructure needed to reach a largely rural population - not to mention reaching the urban retailers in the dties where few traffic lights are found and modem highways do not exist. Brown Smiley '94, Bayer's chief representative in Vietnam, provided a personal glimpse of the fragmented distribution system. He sent each of us off on a motor scooter with a sales rep through the streets of Ho Chi Minh City. While weaving through incomprehensible traffic, we were amazed to find major wholesalers and re-sellers operating out of tiny, product-lined stalls at crowded market areas dtywide. Consumer products giant, Unilever, has also faced distribution challenges in Vietnam. Due to the lack oflocal distributor warehouses, Unilever had to finance a large fleet of trucks to 54 / 3 / 2001 visit over 100,000 stores throughout the country each week. However, the company has found this direct contact with retailers and users extremely helpful in identifying consumer preferences. For instance, after discovering the local tradition of brushing teeth with salt, Unilever introduced a salt-flavored toothpaste. The company now has a 50 percent toothpaste market share. In Thailand, where the distribution infrastructure is more advanced and a burgeoning middle class demands more technologically advanced products, we learned that understanding the local market is still critical. Isuzu successfully leveraged the popularity of light-duty pick-up trucks to become Thailand's number one truck manufacturer. Hosted personally by the president ofTri Petch Isuzu Sales Co., Ltd., we were reportedly among the first public visitors to the Thailand Isuzu factory - where over one million trucks have been made since 1963. Factory managers there shared their plans to improve demand forecasting, accuracy, and to reduce lead times by collaborating more closely with suppliers. According to Accenture representatives, improving supply chain management practices through integration and collaboration is becoming common in Thailand. We saw this when we visited Sony Semiconductor Ltd. in Bangkok where running a 24-hour operation producing and exporting 30 million units a month makes minimizing inventories through Enterprise Resource Planning (ERP) a top priority. Similarly, Nestle's factory in Bangpoo showed how demand and supply planning - along with an automated bar code system - play key roles in manufacturing and distributing 75 different Nescafe creamer and tea products in Southeast Asia. While Thai companies work on adopting the latest in supply chain management strategies, local consumers are eagerly adopting the latest in high-technology products, as evidenced by the throngs of young shoppers toting mobile phones in the upscale Siam Square shopping area. Our visit to Ericsson, however, showed the interesting paradox faced by technology companies in this emerging market. On the one hand, the Thai market is very attractive as one of the fastest growing mobile phone markets in the world with projected annual growth rates of 80 percent. On the other hand, governmentlinked telephone companies are maintaining close controls on the development of mobile Internet applications and potentially stifling the growth of value-added mobile services. In Singapore, where the government is renowned for promoting foreign investment and encouraging technological development, we met up with global companies who are lead- WWW.T - BIRD.EDU ing the way in state-of-the-art logistics and supply chain management services. For example, after a rapid expansion into Asia, Avnet Asia Pte. Ltd. has chosen Singapore as the headquarters for its regional Integrated Materials Services (IMS) operations. Building upon Avnet's worldwide expertise in electronics assembly sourcing and distribution, Avnet's IMS division offers Original Equipment Manufacturers (OEMs) with customized just-in-time (IIT) and demand pull methodology services designed to optimize supply chain operations. At Emery Worldwide, we were able to see how this intemational air freight company is transforming itself into a leader in global supply chain management and logistics services. A tour of their local warehouse proved particularly interesting as we found it fill ed with Nike products, some of which were undoubtedly produced at the factory we had just visited in Vietnam. Emery provides Nike with full warehouse and distribution management services throughout Southeast Asia. In another visit, we enjoyed a panoramic view of Singapore from the Suntec Towers while listening to Paul Freyermuth '89, vice president of business development at i2 Technologies Pte. Ltd. His company is focused on creating value for billion-dollar global companies operating in the Southeast Asia region by providing the latest in supply chain management technologies-an opportunity made possible by Singapore's advanced economy and strong technology infrastructure. Between company visits, we still found time to enjoy the exciting and diverse cultures of Southeast Asia. In Thailand, we marveled at the colorful and ornate temples of Bangkok and Chiang Mai and savored the deliciously spicy Thai cuisine. In Vietnam, we crawled through the unbelievably narrow Viet Cong tunnels in Cu Chi, and spent a glorious day on a boat ride through the Mekong Delta. In Singapore, some of us enjoyed the Night Safari at the Singapore p. 2 7 Zoo, while others sought out their favorite gastronomic delights in the endless rows of international restaurants and shops. And, wherever we went, we were graciously welcomed by Thunderbird alumni who openly shared their insights and experiences in this exciting region of the world. Most importantly, we received excellent advice on doing business in Southeast Asia from people who are succeeding there today. For example, Roberto Castillo '60, Unilever's supply chain and technical director, strongly emphasized the importance of getting to know each country personally before developing long-term strategies. Bayer illustrated this too by explaining how it had to develop individually packaged insect repellent coils to meet price points that Vietnamese consumers could afford. Quality was also at the top of everyone's agenda as the majority of factories touting their ISO-9002 certification and adherence to the Japanese 5S model: Seiri (tidiness), Seiton (organization); Seisou (cleanliness); Seikatsu (way of living); and Shitsuke (training/discipline). However, after seeing the term "ISO-9002" plastered across signs on even the smallest of shops in Vietnam and Thailand, we realized that verifying the existence of actual quality management procedures is still a must in Southeast Asia. Another common theme was business ethics - with representatives from Nike and Unocal describing their companies' nobribe policies when dealing with local suppliers and distributors. Allen Obemdorf '72, an exclusive distributor for Corona beer in Vietnam, echoed this sentiment by warning us that "engaging in bribes is the most inflationary part of doing business in Southeast Asia." He also explained his company's unique approach to dealing with product tampering. By carefully tracking and collecting all Corona beer bottles back for recycling, an effort that pays for itself, his company is able to avoid having stolen bottles show up on the market filled with cheap, local beer. From firsthand encounters with labor-intensive assembly in Vietnam, to witnessing the more automated factories of Thailand, to learning about the latest in logistics technologies and services in Singapore, the valuable insights we gained from the Supply Chain Management in Southeast Asia interim course are as diverse as the countries themselves. Although we would be hard pressed to agree on what was the most valuable experience we each gained from the course, it is certain we would all agree that our Thunderbird education was greatly enhanced by this unique experience. Not to mention our fond memories of riding through the Thai jungle on elephants! • 54 / 3/2001 and Japan pumped nearly US$120 billion into financial markets on September 12 to assure liquidity, according to Business Week reports. When Wall Street reopened, the Dow quickly fell more than 600 points. But bargain hunters fueled a comeback the following week and the markets began to stabilize - even airline stocks prices rose a bit in response to a US$1S billion Congressional aid package. Still, fear and uncertainty are likely to keep market volatility high for now. GAUGING A RECESSION What makes a u.s. recession so worrisome is that the fates of many other economies hinge largely on the performance of the u.s. economy. For example, recovery from the 1997 Asian financial crisis was being driven largely by exports to the United States and in Mexico nearly 90 percent of exports are manufactured goods bound for the States. How the U.S. responds is critical. Until September, the cure-all By JESSICA MCCANN The global economy had been teetering on the edge of recession for some time. In fact, many believed that U.S. consumer confidence was the only thing priming world markets. On September 11, that confidence was crushed and a global economic slowdown became reality. Could the likelihood of a drawn out war on terrorism hamper a quick recovery? Perhaps, say Thunderbird international finance and trade professors on both sides of the Atlantic, if consumer confidence remains low. "What is happening in the economy is more of a reaction to the past four or five years, rather than anything that arises from the terrorists. We were clearly in serious trouble before this happened," said Dr. lohn Heptonstall, who teaches at the Thunderbird Europe campus in France. 'The September 11 incident will have a serious impact on specific industries, such as tourism and the airlines, but not much direct or lasting impact on the economy as a whole. More important is the secondary effect on consumer confidence. In this respect, the anthrax incidents are also bad news." Dr. John Mathis, of Thunderbird's main U.S. campus, concurs, though is less concerned about consumer confidence. "The terrorist attack was a major shock and major interruption of economic activity, and its effects are still rippling. A month or two of this disrupted economic activity is going to result in a pretty sharp decline in growth over the next couple of quarters, but I don't see it lasting much longer than that, " he said. "We should be realistic, but not overly pessimistic." SPEEDING UP THE INEVITABLE Many business and political leaders believed a global recession was imminent. The underlying problem: the world's three largest economies - the United States, Japan and Germany -were in a synchronized slump. Japan was in its tenth year of stagnation. Germany's industrial production had plummeted significantly during the past year. The U.S. economy had been fueled by little more than consumer spending since January. "Investment spending in the U.S. corporate sector pretty well burned out," said Heptonstall. "Up to the third quarter that was being offset, quite surprisingly, by a strong level of consumer spending. The real problem now is that consumer spending has very clearly dropped, as well." The September 11 attacks sent shock waves around the world, shutting down Wall Street and sending markets plummeting by as much as 12 percent in Frankfurt, Tokyo and Korea. Governments worldwide moved quickly to stabilize markets and stimulate their economies. The central banks of the United States, Europe seemed to be cutting consumer interest rates. A half-point cut in October was the ninth this year, bringing the rate to its lowest point in 40 years. But more is needed. U.S. fiscal policy has broadened since the attacks, and Heptonstalllikes what he sees so far. 'The thing the U.S. economy really needs is a recovery of business confidence - the resumption of spending by the corporate sector. The low cost of funds is a necessary condition of that, but not a sole condition," he said. "Ironically, in a way we're back to the Reagan period. You had a very deep recession in the U.S. in '80 and '81, and then staged a very robust recovery because the Reagan government committed itself to a combination of large cuts in taxation and large increases in government spending. I now see the Bush administration doing very much what Reagan did back in '82, which I think is the right approach," said Heptonstall. If that fiscal policy could create new buoyancy in the U.S. economy, it could stimulate recovery for the rest of the industrial world-just as it did in the early '80s. The risk of continuing such policies too long, however, is that both inflation and the national deficit could rise. HAlthough you have to keep an eye on the long run, the most important problem is solving the short run," said Heptonstall. 'Tm very critical of the European Central Bank at the moment because I think it's so concerned 54/3 / 2001 about the long run dangers of inflation, that it's ignoring the much more immediate problem of low growth and high unemployment in Europe. So far it's resisting any suggestion of a relaxation of fiscal policy." TIMING IS EVERYTHING Although the terrorist attacks came at a problematical time in the business cycle, things could have been worse. The U.S. Federal Reserve and White House had already approved stimulus packages, such as the tax rebate plan that had checks in the mail by mid-summer. The central bank had also been cutting interest rates since January. But the September 11 attack tipped the scales into recession. The U.S. airline industry suffered the first major economic blow when planes were grounded for two days. Soon, airliners around the globe began feeling the strain, as well. Many-including Lufthansa, Swissair and Aer Lingus-announced layoffs affecting thousands, and most reduced flights by up to 20 percent. In addition, the world's largest insurance companies have said the terrorist strikes would produce the largest claims in their history. Munich Re and Swiss Re expect to jointly pay out more than US$3 billion. European financial- products giant Zurich Financial Services' losses could reach US$900 million. The attacks also pummeled many Internet companies - especially travel operations - just as they were starting to recover. Expedia.com, for instance, reported a 60 percent drop in online reservations (not counting cancellations) in the weeks after the disaster. Travelocity.com announced significant cost reductions in October, including a 10 percent staff reduction, hiring freeze and advertising cuts. The auto industry is also reeling, as consumer spending on big-ticket items stalls. Most major manufacturers are offering zero percent, fiveyear financing for U.S. purchases to boost sales. "A lot of these industries were feeling pains even before the terrorist attacks," said Mathis. "But when you have a shock like that, you have an excuse to do some extra housecleaning. I think that is why you are seeing corporations, even in other industries, scale back." It's true. The U.S. labor market was under intense pressure long before the attacks. The drop of 199,000 payroll jobs in September was the largest one-month decline since February 1991, according to U.S. Bureau of Labor Statistics. And, that monthly report didn't even capture the 200,000 plus airline and travel industry layoffs that occurred after September 11. Manufacturing companies alone laid off 93,000 workers - the 14th consecutive month of job losses at factories. A significant shift in spending also occurred WWW.T- BIRD .E DU in late September. Consumers have donated hundreds of millions of dollars to organizations helping those affected by the attackselecting to help victims rather than spend that money on themselves. "The issue now is how quickly that money gets channeled back into the system," said Mathis. "It will take at least a quarter. So, instead of the economy following a V-shaped recovery - where we see a sharp decline and equally sharp recovery - it will probably be more like a check with a sharp decline and gradual recovery." CONFIDENCE IS KEY While American spending is low, patriotism and confidence in the institutions of government - the Presidency, the Federal Reserve, and the military - to secure the nation and return it to prosperity seems higher than ever. p. 2 9 As such, U.S. political and military response may be as important as economic policy in getting the nation - and world - back to business as usual. So far Americans appear to approve. A series of Newsweek polls conducted in late September showed 89 percent approve of President Bush and his actions. But, according to Heptonstall and Mathis, the world shouldn't expect America's growth rate to return to 5 percent. The country had been averaging 4.5 percent growth for most of the past four years and most economists don't consider that to be a sustainable level, they said. "The need for a correction was certainly established long before September 11," said Heptonstall. "But my guess is that by the middle of next year, the economy could well be growing again. It is going to depend very much on confidence levels, both in business and among the general public." • p. 3 0 Security was tight; the media abundant. The crowd was visibly exdted as Mexico's President Vicente Fox addressed The Miami Herald's 5th annual Americas Conference in September. That conference is held in partnership with Thunderbird. Fox addressed a sell-out audience at what is unquestionably one of the two major U.S.based Latin America conferences each year. Tall and affable, Fox was warmly received by the standing-room-only crowd. The Harvard alumnus and former president of Coca Cola, Inc. of Mexico began by telling the group that by voting for him last year, his people clearly signaled their quest for change. "Mexicans wanted freedom - freedom from corruption, freedom from deception, freedom to fully express themselves as Mexicans," he said. 'They also want free access to today's economic progress." According to Fox, that can only happen if Mexicans continue along a true course of democracy - with democracy meaning "not just the casting of votes, but the very basis of the country's economic and sodallife." Fox reminded everyone that Mexico is now WWW.T-BIRD .EDU the U.S:s second largest trading partner - behind Canada - buying more goods and services from the U.S. than France, Italy, Spain, and Germany combined - and that Mexico has a US$250 billion trade balance with the U.S. "This partnership that we have made through NAFTA has made the Mexican economy converge with the U.S. economy," he said. Unfortunately, Mexico is also feeling the impact of the U.S:s economic slowdown. Thus, he cautioned his countrymen not to "lose the power to control our destiny" by pursuing short-term profits too aggressively right now. Mexico recognized open trade agreements with 32 countries - including two with the world's two largest trading regions: North America and the European Union. That makes it a great place for business, Fox said. As does the fact that Mexico has managed a "finandal disdpline that has resulted in an interest rate decline from 18 percent to 71/2 percent this year," and "managed to make international markets recognize the stability of our economy." The country also has the highest per capita income in Latin America at US$6,200. But, even 54 / 3 / 2001 that needs to rise, said Fox, who again termed democracy the economic and social equalizer for both Mexico and all of Latin America. "Latin America also is still one of the world's most inequitable regions because even though considerable wealth exists in the region, 220 million Latin Americans still live in poverty today - 40 million of them in Mexico." Democracy, he said, is the key to distributing that wealth and "eradicating the marginality and economic inequity that condemn millions and millions of Latin Americans to a life of poverty and limitation." Fox's greatest personal source of optimism? That for the first time in history, all Latin American countries (except Cuba) now have democratic leadership. As a result, "This, the 21st century, will be the century of Latin America," he said. More than 750 people attended this year's Americas Conference, which included addresses by Patrida Cisneros, chairman, Fundad6n Cisneros, Frandsco Flores, president of EI Salvador, and /eb Bush, Governor of Florida. The event also included a Thunderbird-spon- 54 / 3 / 2001 sored panel entitled, The Convergence of Telecoms, Media, and Content: which included Jose Antonio Rios, president, Global Crossing International, and Charles Herington, president AOL Latin America. Cisneros' panel on social responsibility included representatives from the AOL Time Warner and Rockefeller Foundations. A former teacher in both the u.s. and Venezuela, Cisneros spoke passionately about her Foundation's AME and CI@se programs. "I believe that new media and technology have the capability to be the great equalizer where education is concerned," she said. AME is a distance-learning program that teaches teachers throughout Latin America; she said it impacts 57,000 teachers per year. CI@se delivers first-rate educational programming that is compiled from throughout the world, and then translated into Spanish and Portuguese. Commercial free, the service is offered in partnership with AOL International and reaches more than 15 million students annually. Kathy Buskin, president of the AOL Time Warner Foundation, said that the Internet is forcing business, government and NCOs to work together to achieve united goals. She expects AOL Latin America to play an increasingly important role. The company attracted more than one million subscribers in Brazil. Mexico, Argentina, and Puerto Rico during its first 21 months, is reaching critical mass, and is WWW.T- BIRD. EDLI one of two or three key regional players. According to Buskin, it took AOL nine years to reach the one million milestone in the U.S. The charismatic president of EI Salvador, Francisco Flores, was the Thursday lunch speaker. Flores professed optimism in his country's future but stressed, "We don't want fish, or a lesson in fishing. What we direly need is the opportunity to fish. " Flores termed himself committed to leading his country out of crisis and into economic stability. He termed access to technology, education, and English language training critical to his country's transformation from an agrarian to modem society. After being ravaged by violence between 1979 and 1992, when a peace accord was signed, EI Salvador has been devastated by earthquakes in recent years and is now in the middle of a draught - prompting one in four EI Salvadorans to flee. Still, Flores said, his government is making significant headway: p.31 • Lowering inflation from 32 percent to 3.5 percent, • Reducing trade barriers from 290 to between 5 and 15, • Trimming defense spending from 56 percent to 5 percent, • Reducing EI Salvador's dependence on coffee production to 10 percent of total exports, • Building 200,000 new homes since the earthquake. Florida Governor Jeb Bush discussed Florida's role in Latin America as part of a Friday morning panel, impressing many with his humor, first-hand knowledge of Latin America, and Spanish language fluency. According to Bush, Florida is the fastest growing state in the U.S. and boasts the 17th largest of the world's economies. "Florida has one foot firmly planted in North America and another firmly planted in the rest of the Americas," he said. "Our relationship goes way beyond mere numbers; it goes to culture and personal passion." Bush described Florida as being 'wired' to Latin America. He has led three major trade delegations there - one to Mexico, one to Brazil, and another to Argentina and Chile. "Let me make a confession here today," he said, "I believe in entrepreneurial capitalism from the end of my toes to the top of my head." He termed education a critical success factor in accomplishing that goal. Thunderbird is one of The Miami Herald's main partners in producing the annual Americas Conference event, which draws top political and business leaders from throughout the U. S. and Latin America - including many T-birds. Thunderbird also typically attracts a majority of the paid conference attendees and sponsors a trade show booth and key events - which help build brand equity. • THUNDERBIRD SPONSORS TELECOM, MEDIA AND CONTENT CONVERGENCE PANEL HoW is global convergence driving the business model for content providers in the 21st century? Jose Antonio Rios, president of Global Crossing International. and Charles Herington, president of AOL Latin America, were part of a Thunderbird-sponsored panel that discussed that and other 'convergence' issues. Thunderbird's Dr. Robert Grosse served as moderator. Rios, who had worked for the Cisneros Group in Venezuela, where he helped launch Direct1V, described how Global Crossing has connected 200 of the world's largest cities, in 27 countries, with fiber optic cable. According to Rios, 80 percent of the world's data needs reside in those
Click tabs to swap between content that is broken into logical sections.