Global and NEO Business Leaders Converge at B-W
Baldwin-Wallace College's Center for Innovation and Growth (CIG) hosted a four-day symposium in October where students, faculty and local business leaders joined executives from across the globe in discussions on innovation, global cultures and integrity. Faculty and students joined senior leaders from CIG corporate partners Lubrizol Corp., MTD Products Inc., Westfield Insurance Group, National City Corp., Parker Hannifin Corp., and Glengary LLC and exchanged views with global leaders.
JEAN-LUC DEHAENE . . .
A two-term Belgian prime minister and co-author of the European Union constitution began by dissecting European politics and markets post World War II to instill economic and cultural harmony between France and Germany for the benefit of all of Europe. “Peace was achieved through economic integration and intra-dependent economies,” said Dehaene.
“After the Cold War and now as a result of globalization, the unification of the East and West has opened a window to peace and prosperity for all Europeans.” After 40 years of East-West confrontation, the reunification of Germany was the foundation on which the European Union was built. In 1993, the Copenhagen Accession criteria were established:
1. Stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities;
2. The existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union; and
3. The ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.
In 1997, EU negotiations began and by 2004 ten new members had joined. Today, 16 out of 25 nations have ratified the European Constitution and Finland is on its way. France and The Netherlands, two founding member states, surprisingly rejected the referendum and seven nations have suspended ratification.
Prime Minister Dehaene believes the constitution failed in part because Europe is struggling with an identity crisis. Some citizens view Europe as an economic accelerator, he suspects, while populists emphasize nationalism and cocooning. He concluded that Europe's citizens are “globalists” as consumers, yet “defensive” as producers, and, thus, Dehaene believes the referendum was an answer to the wrong question and that a referendum on enlargement would be more meaningful.
Last, Dehaene concluded that the EU of tomorrow will expand its economic monetary union and will increasingly coordinate strategies for purposes of European military defense and justice to combat terrorism and crime.
DR. ARTASHES GAZARYAN . . .
Spoke at B-W in Berea and at B-W East in Beachwood on the “State of the Entrepreneurial Economy in Eastern Europe.” The Beachwood Chamber of Commerce was a co-sponsor of his visit. Gazaryan, born in a Siberian labor camp, helped negotiate Lithuania's freedom from the Soviet orbit.
Author of three books and dozens of articles on strategic management and information processes, Gazaryan explained how the once state-controlled economies have shaped the thinking of current leaders in Eastern Europe and Russia. He reminded the audience the speed of the Internet is exposing people of all ages to ideas and opportunities located anywhere on the globe, and this phenomenon is unleashing liberties and markets almost daily.
“The worldwide web makes many things accessible from the East to the West and vice-versa,” said Gazaryan. “However, please understand that the East is learning faster and is hungrier to succeed than the West. No one is protected by the Berlin wall anymore; neither the east nor the west, as ideas and commerce are exchanged at internet speed.”
The challenge of conducting business in Russia, according to Gazaryan, includes big distances between markets and factories and extreme temperatures (both hot and cold). Temperatures remain important hurdles for production costs reductions, just-in-time deliveries and reliability of supplies to make Russian products globally competitive. In the winter temperatures can be zero and in the summer 104. Some markets are 5,000 miles away.
Gazaryan summarized that the Russian market is relatively open. There are enthusiastic entrepreneurs in all areas of the economy. There is also an abundance of easy money controlled by officials who can destroy sound market relations. Competition can be distorted since writing reports to gain access to national treasures is more profitable than producing goods or providing services. Non-professionals fill many managerial positions because the owners trust them. Internal thefts bring considerable losses for owners.
While life may not be easy in Russia, hope continues to thrive despite the continued struggles for many to match a rising cost of living. Social services are poor and insufficient, but improving slowly. Compared to the socialist regime, moral and intellectual values have declined.
However, the economy is getting better and the state is getting more civilized and predictable. Gazaryan asserts that access to Western resources and opportunities is increasing. Young people are more willing to do their best and invest in the future. There is a cultural shift from a mentality of relying on the state to relying on oneself.
During the Soviet era, consumption might have been low, but Gazaryan says this did not mean absence of needs or unhappiness. Today, savings accounts are rising significantly increasing demand for products. For example, in the first half of 2006, Russians spent $12.1 billion on new cars and the market was unable to meet demand.
TAN WAI KEE . . .
Former senior vice president and China general manager for Interbrew, shared his perspective on how the Chinese managerial mindset is evolving. He told students and CIG members that this mindset varies from region to region in China and is largely determined by cultural heritage, training and experience, and the influences of contemporary society.
However, Tan said that regardless of region, “Confucianism continues to influence leadership styles and management behavior.” He also encouraged the audience to understand that many Chinese senior executives were brought up under the technocratic bureaucracy of the socialist planned economy, and these experiences still shape the decisions they make today.
The population of China is 1.31billion. Everything left of the decimal, the 0.31 rounding error, is roughly equivalent to the population of the USA. China's GDP grew 9.1% per annum from 1994 to 2004, while the U.S. grew steadily at 3.3% Tan explained that Confusion Dao ingrains conservative pragmatism and deep respect for scholarship, lending a prescribed right way of action. The emperor (leader) was sacred and he alone brought peace, prosperity and enduring justice to society. If he fails, his mandate is lost. To govern, the Emperor was assisted by scholars. The ruling class held monopolies over power, prestige and culture. The function of the ruling class was to rule and the masses to obey and follow. Confusion ideology upheld order, stability and harmony. In a hierarchical structure, each member of society fulfilled their function within their station of life. If each person did his or her duty, then society was harmonious and well governed. People are part of a collective and are not individuals.
While Chinese society is changing, according to Tan, Confucianism continues to influence leadership behavior. People do not necessarily know their best interest; the boss knows best. It is futile to consult or build consensus; obey and follow. The authority of the party and state pervades every aspect of life.
The new managers are influenced by a Confucianism legacy in that they can be accepting, complacent and risk adverse. However, said Tan, economic reforms are transforming this behavior. Transitions to market economy, mobility, foreign direct investment and access to information and knowledge has reduced socialist's ideology and given way to “to get rich is glorious.”
Modern managers in China respect hierarchy, according to Tan, but are ready to take charge of their density. There is a voracious appetite for learning, self-improvement and desire to prove worth. They are more likely to question and challenge given their motivation to succeed.
Prime Minister Dehaene, Dr. Artashes Gazaryan and Tan Wai Kee demonstrated CIG's commitment to bring a global dimension to innovation. B-W will continue to recruit world-class speakers who can contribute to the global market awareness of students and CIG members.
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