“Current Challenges in International Business & Implications for Education”

global business movements backed by academic research

Oliver Parker

Tuesday, 28th April 2015

Current Challenges inInternational Business

IB Environment

IB Knowledge & Management

Governm

ent PoliciesGlo

balis

ation

& T

rade

Czinkota, Ronkainen et al, (2009), International Business, John Wiley & Sons Ltd, England.

InternationalBusiness

• Intellectual Property –• Globalisation, Promotion of R&D, increase innovation

• Scientifically Advanced developing nations; WPS – positive benefit with MNCs,• Copier & Producing nations; WPS – negative effect as will not protect ‘copiers’,• Developing Countries without Resources; WPS – more difficult to import IPR goods?• China & India - growing capabilities, directly compete with self developed products /services

•Security & Protection• Terrorism – turbulent regional conflicts, e.g. Ukraine (Russia) & Middle East (IS)• Cyberspace & Cloud – “cyber wars” on the increase

• Security now a priority – protection of sensitive info & IP• Sony computer systems hacked (Nov. 2014)

• Communications & e-Business• Communications - B2B supply chain and other IB activities

• Overcomes geographic dispersion, time gap, cultural & language barriers

• On-line Shopping + offshore on-line shipping• logistics over long-distance, local competitors, tariffs & rules, investment in relationships

• Cloud – opportunity as channel or mode of operation• e.g. Build international networks to suppliers & distributors

IB EnvironmentManagement of Change

• Ethics & Corruption, Collaboration, Law & Trust• Ethics & Corruption – 10-15% of major project expenditure

• social acceptance protects the elite from scrutiny

• Trust - needs to sustained by appropriate institutions• Law – “foreigners” invest in Western cos.

• ...but financial regulators (FCO, SEC-US)• Competition Law – EU vs. Gazprom (from 2012)

• Government Policy Changes - Austerity• China 12th Five Year Plan (2010-15)

• “World Factory to Consumption Powerhouse”• Balance economy and tame social unrest.

• China ‘Frugality’• Curb Corruption – Xi Jinping to pursue “tigers” and “flies”• Drag on China’s economy, reduction of consumption?• What effect on WMG China programmes? e.g. AVIC 2015

Government PoliciesReaction & Reform

• Globalisation – Investment & Competition• Trade & Investment Barrier Removal

• but ‘mobility’ allows players to move in search of lower costs.

• Fast Developing Nations – BRICS & MINT but BIITS or ‘Fragile Five’• China – Growth slowdown is relative

• higher labour costs (supported by govt) but lack of talent to go around.• ‘Cheap China’ to high value manufacturing & service base consumerism• 2020, Asian middle class consumer to be 40+% of global consumption (Ivey Business Journal 2012)

• Turkey – Europe’s 6th largest economy• economic growth (8.5% 2012) from manufacturing & construction• young population, but trade deficit and growing regional conflict (Syria)

• Fragile Five (Brazil, India, South Africa, Indonesia, Turkey); economic prosperity but,• current account deficits with heavy reliance on foreign capital inflows• trade deficits, low literacy, poor governance, underdeveloped infrastructure

• Financial World Order – Post Global Financial Crisis, but on-going• China-led AIIB – rival to US-led WB (Bretton Woods, 1944)

• $8 Trillion for Asian infrastructure projects

• Word Bank & IMF reduced influence, WTO increase in remit

Globalisation & TradeChanging of the Guard?

• International Business Relationships – changing nature• Electronic Integration & Shared Databases – risk information transfer

• large multi-national projects, e.g. Joint Strike Fighter (F-35)

• MAC - role reversal for developing economies • Reverse Collaboration – BRICS international growth strategy

• e.g. China in Africa: access to natural resources. Investment aid with ‘few strings’

• Public Private Partnership – investment share & project expertise• Beijing Metro & MTR Corp, Chinese Health & Medical insurance, & Indian Rail privatisation?• M&A – direct investment from ‘developing’ regions• Tata with JLR, Geely with Volvo, Fiat Chrysler Automobiles (FCA)

• Supply Chain - Outsourcing & Offshoring still relevant?•Total Cost of Ownership - RightSourcing & ReShoring

• Converging Costs (wages) & Hidden Costs (logistics ops etc.) • Selected return of manufacturing to West• Location important: Mexico to USA, Turkey to Europe

IB Knowledge & ManagementResourced-based

Implications for Professional Education & Training

IB Environment

IB Knowledge & Management

Governm

ent PoliciesGlo

balis

ation

& T

rade

Czinkota, Ronkainen et al, (2009), International Business, John Wiley & Sons Ltd, England.

Professional Education& Training

Implications for Professional Education & Training

• Full-Time/Part-Time MSc – from IJV to MAC– Move from IJV to FDI/MAC

• External “symbiotic” Growth: due to FDI ‘liberalisation policies’• Alternative Sessions: Risk Analysis & Decision-Making (location & partner), e-Business & Cyber

Security, Corp Governance-Ethics-Corruption,

– Better WMG Integration, with other core modules• e.g. Project Management, Risk Management, Marketing, Operations Strategy

– IB Programme – WMG’s practical management approach:• Core Modules: Global Environment & Shift, International Strategies, Finance, Marketing & Sales, Corp

Governance & Ethics, Multi-national Team Management, Collaboration, New Business Start-Up & Entrepreneurship

• ‘Live’ Entrepreneurial Project & Languages

• Other Degree Learning – Distance, Earn & Learn, On-Line

• Warwick vs. The World – in-house vs. in-territory– Corporate Training: Business Development through Alumni

• Bespoke vocational training – to meet real-time business needs.

– Franchise & Train-the-Trainer: • target territories & sectors to academic institutions/trainers + Quality Assured.

Implications for Professional Education & Training 2

• Social Media – Flexible & Distance ‘Blended’ Learning– Managed by Students, monitored by WMG– Contact current students or alumni (Facebook/Twitter)– Students: perceived value for employers (without the skills?)

• Webinar & Live On-Line Training– a presentation/lecture/workshop/seminar transmitted over the Web using video

conferencing– Group interaction, text chat panel, attendee panel, ppt & video, whiteboards & breakout

rooms– e.g. Post-Grad Degree On-Line – Istanbul Uni. through London School of Bus. & Finance

• Build-the-Brand & Global Alumni Network– WMG Brand – Social Media updates & Webinar events– Mentoring – of new graduates by WMG alumni & business

leaders– Global Alumni Network – active groups & visiting staff

Thank you &

Any Questions?