part 7: Global entrepreneurship class - culture

Global Entrepreneurship
Developing Global Mindset for
Entrepreneurs

Brian David Butler

Teaching:
Brian Butler is currently a professor with Forum-
Nexus, which is co-sponsored by the IQS Business School
of the Ramon Llull University in Barcelona, and the
Catholic University of Milan. He teaches classes on
International Finance and Global Entrepreneurship in
brian.butler@forum-nexus.com Europe every July and January.
briandbutler@gmail.com
LinkedIn/briandbutler
Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global
Trade at Thunderbird’s Global MBA program in Miami.

He previously worked as a research analyst at the
Columbia University Business School in New York
City.

Brian David Butler

International:
A global citizen, Brian was born in Canada, raised in
Switzerland (where he attended international British
school), educated through university in the U.S., started his
career with a Japanese company, moved to New York to
work as an analyst, married a Brazilian, and has traveled
brian.butler@forum-nexus.com extensively in Latin America, Asia, Europe and North
briandbutler@gmail.com
LinkedIn/briandbutler America.
Skype: briandbutler
Brian currently lives in Recife, Brazil where he is teaching
classes on “Global Entrepreneurship” at the university
“Faculdade Boa Viagem”.

Brian Butler:
Founder of “KookyPlan.com”
– the wiki for Entrepreneurs

Exam

Review – grades
next week (sorry)

Schedule for today
1. Entrepreneurship ideas
2. Cross-cultural issues for Global Entrepreneurs
3. Homework review
4. International IQ:
▫ Greece – what's happening?

What new business ideas?
• Discuss…

• +1 point for participation grade for students with
original ideas (not previously discussed in class)

• Include 3-questions analysis of idea:
▫ What problem? What trend? What transferrable?
▫ (so, start with idea, then use 3 questions to evaluate)
Mine: water cup – airports – transfer from Brazil. Problem is price, size. Trend is economic crisis

Also curious:

• Who works with family business?
• What are your plans after graduation?

Global Entrepreneurship:
developing the global mindset for
entrepreneurs

Class #7
Saturday May 22nd , 2010
•Cross cultural issues for
Global entrepreneurs

Why study Culture?
• Market entry
• PEST
• International business JOBS (FUTURE)
• Global citizen

Rather than a “laundry list”
• Better to develop a framework for analyzing
cultural differences
• Rather than trying to memorize cultural
differences for each and ever possible culture
you might encounter (French, German, Italian…
too difficult!!)
• Goal – develop skills of HOW to look for cultural
clues, using a framework for analyzing culture

Preview of upcoming lectures
Cross cultural lessons will be useful when talking
about:

1. Using outsourcing to build global teams (4hww)
2. Global collaboration, crowd sourcing:
3. Clusters, entrepreneurship, and development

Examples to discuss
• Forum-Nexus Study Abroad
▫ Example with teachers – American vs. Italian
▫ Relation with students

Your own examples?
• In class assignment:
▫ With a partner, discuss an instance of cultural
misunderstanding that has personally happened
to you. Could this misunderstand have been
avoided? How?

▫ Take 5 minutes to discuss:
▫ 1 person will present to the class…

Cultural Orientation Index

COI

Cultural Orientations Indicator- COI

NOTE:

• One thing we need to remember is that cultures
are never exclusively one or the other: cultures
will likely be one and the other, but with a
clear tendency toward one of these two
extremes.

Homework– due Wednesday for
feedback, or at next class

• Each student is to make their own COI analysis
▫ Each factor – what type are you?

• Also, do a “gap analysis” German person:
▫ Deductive, linear, doing, low-context, direct, fluid
time, single focus, competitive, equality
▫ Compare your COI with this sample person (German)
▫ Which areas do you have the greatest gaps? (areas of
potential conflict)?
▫ What could you do (style switching) to lesson the
potential problems?

Handouts / emails
1. Culture Summary document- Dimensions /
Orientations
2. Excel spreadsheet – COI comparison of
Canada, USA, Mexico

Mini case studies
• See other slides
• Use other projector….

Resources to learn more
Prof. Brian Butler’s notes online:
▫ http://globotrends.pbworks.com/Culture-issues-
in-Brazil

• Sources:
▫ Thunderbird here Download the PDF »
▫ see the TMC site here: http://www.tmcorp.com/

Entrepreneurship and COI
1. Development issue:
▫ Which cultural traits probably lead to more
entrepreneurship, hence more economic
development?
▫ Which factors are most important for
entrepreneurship + level of entrepreneurship in
different places?

2. Personal issue
▫ What style switching should you do to promote
entrepreneurship?

1. Environment:
▫ Control
▫ Not “harmony” or “constraint”
2. Time
▫ Multifocused – versatile, adaptation
▫ Ability to change project, change idea, work on
many ideas at same time
3. Individualism
▫ Particularistic vs. Universalistic: better with
“rules don’t apply to me” (not constrained)

4. Competitiveness
▫ Competitiveness vs Cooperation:
▫ Focus on benefits to self?
▫ leave the group / loyal to the group (thinking)?
▫ Comfortable with competition?
▫ Desire for self-recognition?
5. Flexibility
▫ Not “order” focused
▫ Better if likes flexibility, innovation, adaptation
▫ Comfortable with risks
▫ Dynamic goals (changing)
▫ Problem solving needs flexibility
▫ Tolerate unpredictable, dissent (Israel)

6. Thinking:
▫ Inductive vs. Deductive
▫ Slight advantage to deductive thought – not
constrained by “fact”, but instead gravitate to
grand theories, and “visions” (visionary)
▫ Inductive is better for big-company (systematic
process) innovations
▫ Deductive is better for entrepreneurs and big
changes
7. Future orientation (time?)

Steps to take
• Order:
1. Cultural due diligence (COI)
2. then gap analysis,
3. Develop strategy to minimize negatives
 “style switching” for results
4. Stay alert over time
 Stop cultural “cruise control”,

Style switching
• Who should switch? You? Them?
• Consider:
▫ Power relationship
 Buyer / supplier
 Salesperson / purchasing agent
 Customer / client

▫ Who must change? Style switch?

International IQ moment

What is happening
in Greece? -
discussion

Athens Greece – at the heart of a
Athens Greece
European Crisis?

Athens Greece

• What is
happening in
Greece? –

Greek economy Euro Zone

Negatives:

• No control of monetary
policy
•Can not devalue
currency to regain
competitiveness

Positives

•Low borrowing costs

Greek economy – boom years

http://en.wikipedia.org/wiki/Economy_of_Greece

Summary of problem + why important
• In recent history:
▫ First came the global economic crisis 2007-(9?)
▫ Contraction of credit, deleveraging
▫ Governments step up to fill void of missing
consumer demand – deficit spending, Keynes,
stimulus
▫ Credit continues to contract – less money to go
around
▫ Creditors punish weak countries with external
funding requirements – Greece is 1st in line (but
likely not the last)

External funding + current accounts
• Lesson from past- current account deficits =
dangerous
• Reliance on funding from foreigners
• Short term funding
• Pay off rolling debts
• But, what happens if funding dries up?
▫ This is what happened to Lehman Bros in credit
crisis (and Bear Stearns, etc)
▫ It is also what happed to Greece

National “Balance Sheet”
• 3 Important parts (for our class discussion):
 Current account
▫ Flow of goods and services, Roughly= exports -
Must imports
Balance!!

 Capital account
If If
deficit… surplus.. ▫ Paying for the current account - Money flows
▫ Example: US government sells treasury bills

pay out Build up  Reserves
reserves. reserves. ▫ Foreign currency, gold, etc
▫ Used to finance gap between current & capital
accounts
▫ “below the line”
Martin Wolf book, “Fixing Global Finance”


• Key: must “balance”

 If “current account” deficit,

 then… by definition…

▫ “capital account” = surplus


• GROUP:

▫ So…If imports are > exports… what must be
happening in the “capital account”?

Answer…

 SURPLUS!!
 Money must be coming in from abroad to finance the
current account deficits!

• But…
▫ What happens if you do NOT have money coming in
from abroad

▫ Note: just because you have a “current account”
deficit… that doesn’t mean foreigners will pay the bill…

▫ Group assignment:
 What happens?
 What must you do? (hint: 3rd part of national accounts
mentioned before)…

Answer:

▫ You must then dip into the Reserves (if you have any)
and pay the difference… (gold, foreign currency)

Follow up question:
▫ What if you don’t have enough reserves? Then what?
What can you do?

 (What happens if you are running a current account
deficit, and if foreigners SUDDEN STOP supplying
capital, but… you do not have enough reserves to pay the
bill?)

Call for help

• IMF
• Or, for Greece… call the other Euro countries,
and ask for loans

• But… put yourself in the Germans shoes… would
you want to pour money into Greece if you didn’t
expect to get the money back? Will the Greeks
change?

Recent struggles
• Greek shipping industry was hit hard by the
decline in world trade
• Tourism – falls: 15% of Greece's GDP, and a
major earner of foreign exchange

Understanding Greek challenges
• In a macro sense:
• Facing 2 deficit challenges
1. Current account deficits – remember line of trucks importing as we
exited the boat in Greece – importing more than exporting. So, by
definition… capital account must be in surplus to pay for current account
deficit. Importing capital.

Money came in not from foreigners investing in FDI (as was noted during
speech with Metaxa this morning), but instead much $ came in from
tourists. Tourism = importing capital (capital account surplus). But,
remember what has to happen if the capital account switches from
surplus to deficits? The current account must move from deficit to
surplus. How? If currency can devalue (as they are apart of Euro zone)…
then competitiveness must increase – either more efficient or lower
wages… politically and socially painful process that could take YEARS!!

2. Budget deficits - remember national balance sheet – assets
(income) and liabilities (spending). For Greece, a bit part of
income came from tourism, which dropped off significantly with
the crisis. But, spending remained “too high”. Structural,
difficult to bring down

Governments weak, short term thinking. Difficult to fix structural
troubles with budget. Need to cut costs. But, strong unions, and
impatient democratic voters. Politicians that try to raise taxes or
cut spending (fire teachers) are thrown out

As opposed to governments in countries like Ireland that have made
steps to address difficult structural troubles

• In a macro sense:
• Facing 2 deficit challenges
1. Current account deficits – remember line of trucks importing as
we exited the boat in Greece – importing more than exporting.
So, by definition… capital account must be in surplus to pay for
current account deficit. Importing capital.
2. Budget deficits - remember national balance sheet – assets
(income) and liabilities (spending). For Greece, a bit part of
income came from tourism, which dropped off significantly with
the crisis. But, spending remained “too high”. Structural,
difficult to bring down

Fears- Contagion
• There are many other countries that are running
deficits.
• What happens if credits stop funding?
• PIIGS of Europe
▫ Portugal, Italy, Ireland, Greece, Spain
▫ Threaten to tear apart Euro
• US, UK are the big ones

Other countries – BIGGER Debts

http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com

See…
• See economist article – history – credit crunch
• I will send it by email … and will discuss next
week

part 7: Global entrepreneurship class - culture

Recommandé

Recommandé

Contenu connexe

Similaire à part 7: Global entrepreneurship class - culture

Similaire à part 7: Global entrepreneurship class - culture (20)

Plus de Brian David Butler

Plus de Brian David Butler (20)

Dernier

Dernier (20)

part 7: Global entrepreneurship class - culture