Strategy, China, Emerging markets and the Global Arena
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- Written by Raulgalera
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I teach two courses at IE Business School which names are: “Global Business Strategy: China” and “Winning in Emerging Markets”. Both of them are approached from a very multinational, global perspective. There is an underlying principle in the two of them: the world is changing and the global arena is reshaping, totally, the way we do and understand business.
It is fascinating to see how MBA students from maybe 15 different countries tackle this course, how they enrich our discussions and how deep and knowledgeable they are. It is indeed interesting to tackle countries like China (almost a continent) from an open perspective and not being constrained by (as I wrote in a different article) a “set of prefabricated clich’es of the past”. When you act openly it is amazing the amount of new approaches, ideas, facts, theories, business realities, etc. you encounter.
Guided by my interest in China and other Emerging Markets, especially from the perspective of the impact they are having in competition and strategy, I attended this really fundamental conference at the Center for International Studies at MIT. It was part of the MIT Security Studies Program Seminar Series. The speaker was professor Sally Paine from the Naval War College, and the title: “China Between Continental and Maritime World Orders”. The Lucian Pye Conference Room was perfectly set for the occasion.
The main question addressed there was whether China was going to turn into a “maritime power” trying to stretch its influence “by sea, towards the ocean” or, on the contrary, looking back continentally and befriending Russia and other Asian republics. Fascinating debate! It really was “eye opening” the way professor Paine, based on a perfectly organized study of Chinese-Russian relationships in the last 100 years, gave her opinion about the fact that the, in the old times, “small brother”, is now getting the “big brother” and vice versa.
This idea gave me the opportunity to reflect on the same issue but related to business and the western world. China was the main economic power on the planet until the 18th century. Only since then, it has have a, lets say, smaller position in the international business arena…that, again, has changed in the last 20 years. China is a giant today. There are many business approaches that are developed there better than in any other country in the world. There are many strategic approaches that can’t be understood nowadays without considering what is happening in Beijing or Shanghai.
The “simple” approach is to keep thinking (“prefabricated set of interpretations”) that China and other Emerging Countries will never reach western standards of living. It is better to keep thinking and analyzing business strategy only with a “western perspective” and consider competition as a matter of US and Europe. We tend to think of those countries as something that will “affect others” instead of thinking “this is affecting us right now”.
Do business leaders in Spain and other western countries realize the deep consequences of this huge change? Do they take measures to be able to compete in the future? Do professionals and workers realize they are already competing for jobs, salaries, knowledge, capabilities, markets, etc. with these countries? Do we realize this is very good in “human kind terms” but it is threatening for those that do not react? Do we still think in terms of employment nationally? Do we place the appropriate attention to learning foreign languages and becoming familiar with these cultures?
Frequently the past and its successes is the enemy of the future. What made you strong can destroy you. Are we prepared? Are we, really, even aware of this, really?
In strategic terms we need fundamental structural changes in many areas: political, international, mental, professional, attitudinal, etc. We better get moving. Strategy, again, will be the answer.
By Enrique Cortés PhD. Strategic Thinker-Advisor.www.profitboosterlab.com