When Brazil Beckoned...

By John H. Ostdick

How Could Savvy SOM Students Say No to Exploring the Next Frontier of 
Business Innovation on This Amazon Trek?

Athough The School of Management's advance training for managers and 
professionals lists no herpetology credits, its in-depth, far-flung 
explorations - such as last year's Masters in International Manage-ment 
Studies (MIMS) Global Leadership Executive Program in Brazil - offer 
unique, often intimate international encounters with locals ranging from 
bank presidents to seven-foot anacondas.

Up-close-and-personal glimpses into the internal management practicalities 
of such countries as Cuba, the Czech Republic, Germany, and China are part 
of forward-thinking School of Management training for experienced managers 
and professionals. The travel helps shape competitive, global leaders.

"We have students who have completed their degree but come back for our 
foreign-study tours - that's how good the tours are," says Dr. Stephen 
Guisinger, director of the School's Masters in International Management 
Studies (MIMS) Global Leadership Executive Program.

In September, twenty-five students traveled to Brazil on an intensive 
eight-day mission to study that country's business environment with Dr. 
Guisinger and associate director Dr. Anne Ferrante. The group spent three 
days in Rio de Janeiro and four in the Manaus Free Trade Zone, where they 
received detailed briefings from a wide range of experts, including 
economists from the nation's largest banks, plant managers from throughout 
the region, chief executives and attorneys representing companies doing 
business in Brazil, and spokesmen for the Amazon Surveillance System 
(SIVAM), the organization that monitors the region with radar technology.

"We were blessed with great weather, and the meetings were fabulous," says 
Professor Guisinger, who first visited Brazil twenty-five years ago. "We 
hit a good run of speakers covering financial aspects, marketing, 
manufacturing. We visited Xerox, Nokia, and Honda in Manaus. We also 
visited Raytheon, the [subcontractor/vendor] company [to SIVAM] that 
monitors the Amazon with radar technology to determine who is moving in 
and out of the region - such as drug traffickers - and how much timber is 
being cut down."

From Personal Moments to Professional Connections SOM graduate De'Edra S. 
Williams, who handles domestic accounts for Arthur Andersen LLP in Dallas, 
has participated in three MIMS trips.

"The [MIMS] program provides a global travel perspective - cultural, 
political, economic, and governmental - that I had not had previously," 
Ms. Williams says. "And each trip has a memorable personal moment as well. 
Having a seven-foot anaconda placed on my back during the Amazon trek 
certainly qualifies as one."

"Exposure to foreign cultures and multinational businesses is essential to 
any graduate program purporting to be international in scope," notes 
participant Scott Shively, who is vice president of Global Wire Solutions 
for UPS Logistics Group, a subsidiary of United Parcel Service. "The 
Brazil trip reinforced many of the concepts we had discussed in the 
context of successfully operated international and multinational 
companies." Scheduled to graduate with his MBA this fall, Mr. Shively 
currently is responsible for his company's development of integrated 
business solutions for the telecommunications industry, specifically, 
wireless applications. The trip not only familiarized him with the Brazil-
ian market - which his company had not yet entered - but also enabled him 
toinitiate networking relationships for his firm.

"I was looking for a feel for the Brazil- ian economy - in particular, the 
environment," says Niclas Brattberg, a MIMS student who works in sales for 
Ericsson in Dallas. "It was an exploration."

In the Zone The Zona Franca de Manaus - Manaus Free Trade Zone - offered 
an interesting study of trade incentives and governmental accommodations 
in a developing economy. The International Trade Administration of the 
U.S. Department of Commerce reports that the groundwork for the ten-
thousand-square-kilometer area was established in February 1967. A 
Brazilian decree offered special incentives aimed at creating an 
industrial, commercial, and agricultural center in the heart of the Amazon 
area of northwestern Brazil over a thirty-year period.

"The one thing that struck me about the Manaus initiative is where it is 
located - 'in the middle of nothing and nowhere,' as one Xerox executive 
told us," Dr. Ferrante says. "Despite its remoteness, the enterprise zone 
has grown fairly significantly. My impression is that the activity is 
leveling off now, and a supporting infrastructure is the next step to 
getting that region developed. They need transportation desperately, for 
example. It is truly in the middle of nowhere. There is no easy way in or 
out."

The zone, which receives about 2.4 billion dollars in government subsi-
dies annually, includes the northern city of Manaus, the capital of the 
state of Amazonas. The Brazilian Constitution of 1988 endorsed the fiscal 
benefits of the Manaus zone and extended its lifespan through 2013. 
Although other trade zones exist in Brazil, they are basically customs-
free ports for imports and exports. Manaus is the only Brazilian trade 
zone that receives special incentives to establish industries.

Accordingly, the Amazon region has grown at about 8.4 percent annually 
since 1970, a rate that exceeds the national level of about 5.2 percent. 
In recent years, however, critics within the Brazilian government have 
attempted to curtail or roll back the Manaus subsidies, and a court 
struggle between the federal government and the state government of 
Amazonas has ensued. The zone's opponents contend that increases in 
automation and downsizing have cut the zone's workforce dramatically. They 
note that foreign electronics manufacturers receive the bulk of the 
region's financial support and yet account for about three billion dollars 
worth of Brazil's eight-billion-dollar trade deficit. These opponents also 
say that the region is much better suited for eco-tourism or other uses of 
its natural resources.

A Credibility-Building Exercise Environment in fact, "is becoming an issue 
that organizers are willing to riot over - as evidenced by the World Trade 
Organization meetings in Seattle last year - and multinational firms are 
wearing a bull's-eye on their backs," Dr. Guisinger says. "We're trying to 
give these students, who are managers of multinationals, or potential 
multinationals, firsthand experience. They cannot only say they are aware 
of what's happening in the Amazon, but they also can say they have been 
there. It's a credibility-building exercise."

Certainly, that proved to be the case for Rob Van Til, vice president of 
Houston-based Hanson Concrete South Central. Mr. Van Til, scheduled to 
graduate in May with a master of arts degree in International Management 
Studies, was deeply impressed by the quality of people he encountered. 
Further, because his company had previously considered entering the 
Brazilian market and may do so in the future, his UTD experience has made 
him a greater asset for Hanson. "I've made some contacts that I could go 
down there and get started [with]," he says.

Mr. Van Til also came to appreciate the philosophical conflict prevalent 
in the region. "The business climate is very different there," he says. "I 
found many of the people conflicted about the need to guard natural 
resources versus the need to develop businesses to support the country's 
economy."

The personal access carried significant weight, students on the trip 
attest.

"Meeting with the Raytheon people who monitor activity in the region was 
fascinating," says Ms. Williams, who graduated with her MBA through MIMS 
in May 2000. "From a business perspective, I can see how they use [Global 
Positioning System satellite technology] to provide research data about 
the culture and ecosystem of the Amazon to corporations and bring back 
that perspective to Arthur Andersen, where we do a lot with technology 
interpretation."

Mr. Brattberg, who has participated in similar programs sponsored by 
Ericsson, notes two specifics that stood out for him. "First, we met with 
various lawyers in Rio de Janeiro," he says. "I was very impressed with 
their professionalism, open-mindedness, and knowledge.

"Secondly, my image of Manaus was that it was a high-tech area a little 
bit like the Silicon Valley in the U.S. It's really more of a backyard 
industrial area, a factory-driven environment with lots of unemployment 
and poverty. That was an eye-opener."

More Revelations-Business and Personal A trip of such magnitude carries 
other lessons, both for the well-acquainted and the novice visitor.

"I've been there when inflation rates were as much per month as they are 
this year," Dr. Guisinger says. "So they have brought it under control to 
some degree. That's surprising. Many people felt Brazil would be a country 
that would inflate in perpetuity."

A boat trip to the confluence of the Rio Negro and the Rio Solimões, where 
the river called Amazon actually begins, was a new and invigorating 
experience for him.

For Scott Shively, "the experience reinforced the need to establish a 
local presence in countries like Brazil if a company such as mine hopes to 
offer in-country solutions to the telecom players expanding into that 
market."

"I also was surprised," he says, "about the potential contribution U.S. 
and European students could make to its developing telecommunications 
industry. There appears to be a real dearth of capability and experience 
in telecom in general and wireless in particular."

A social evening stands out for Rob Van Til. "One night in Manaus we 
visited a local restaurant-bar out on the river," he says. "The samba show 
there was different from some of the other tourist-focused shows we had 
seen. This was much more for the locals, and the crowd was alive and 
involved. I felt much more a part of the cultural thing going on down 
there."

The abject poverty in the area struck each of the participants. "Probably 
the most memorable was the juxtaposition of poverty and opulence within 
blocks of each other," Mr. Shively says. "From our inland hotel, you could 
see shanty villages at the top of the mountains, and then turn to admire 
expensive and exclusive beachfront property from the same window."

This coming fall, Dr. Guisinger and a new cadre of students will turn 
their attention to Warsaw and Paris. While the group isn't likely to 
encounter any seven-foot anacondas on the Champs-Elysées, their trip 
assuredly will hold its own rich experiences.

Dallas-based writer John H. Ostdick is a frequent contributor.


Sidebar

A Well-Traveled Program

MIMS Students See the World as Well as Study It

The School of Management's innovative MIMS - Masters in International 
Management Studies Global Leadership Executive - Program opens far-flung 
sections of the world for study.

Recently named by Forbes magazine as one of the "Best on the Web" graduate 
distance learning programs, MIMS also features flextime learning via the 
Internet along with quarterly, on-campus retreats. Students in MIMS can 
opt to earn either a master of arts degree (MA) in International 
Management Studies or a master of business administration degree (MBA).

MIMS students complete the MIMS global leadership program leading to a 
forty-eight-credit-hour MBA degree (GLEMBA) in thirty-two months while 
those in the MA in International Management Studies program complete 
thirty-six credit hours in twenty-eight months. Students already holding 
an MBA may, under some circumstances, complete the MA in seventeen months.

During the past seven years, Dr. Stephen Guisinger, director of MIMS, has 
led student trips to such places as Hong Kong, Indonesia, Korea, Malaysia, 
Russia, Singapore, and Vietnam. The two to two-and-half week "business 
briefings" include meetings with corporate chiefs and community 
organizations, as well as public policymakers and political leaders.

Typically, students in the program are assigned research on trip-related 
topics, and each student turns in a detailed industry brief several weeks 
before going abroad. In the case of the Brazil journey, MIMS students 
compiled reports on agribusiness, electronics, telecommunications, 
finance, and energy (including 1990-2000 trends), policies affecting each 
sector, major competitors, strategic options open to foreign and domestic 
companies, and possible future scenarios. These reports were then 
incorporated into a briefing binder, which was distributed to each of the 
trip participants.

Detailed information on MIMS programs can be found at 
www.utdallas.edu/mims.

-John H. Ostdick