Backyard Primer

By John H. Ostdick

Although GLEMBA students may not have traveled far, their study trip to
Mexico gave them global insights

Sometimes the most compelling lessons await discovery in what we think
is familiar ground-in our backyard or just beyond

Twenty-nine UTD students and two faculty members involved in its Global
Leadership Executive MBA (GLEMBA) Program learned this lesson on
regional trade during their course-ending international trip to Mexico
in late September.


Exploring the Aftermath of NAFTA 

Most tour participants had already traveled or done business in Mexico,
and they acknowledge that the country didn't rate high on the excitement
scale when it was announced as their destination.

But "the trip changed my opinion," says Francisco DeKotter, a manager of
specialty steels for Commercial Metals Company in Irving, Texas, who
travels regularly to Mexico on business. "It also made me appreciate our
political system," he says. "Although we may complain how it may not
support our particular efforts seeking cheaper gas or fuel for our steel
mills, when you see how a country like Mexico is struggling you can't
help but realize how fortunate we are."

Those lessons were precisely what Anne Ferrante, Ph.D., director of the
GLEMBA Program, had hoped for when selecting Mexico for study in wake of
the 10th anniversary of the North American Free Trade Agreement (NAFTA).

"In the globalization movement in general, there is a strong school of
thought that says a lot of trade and day-to-day interaction is really
done regionally," Dr. Ferrante says. "So we wanted to explore the
aftermath of NAFTA, what impact it has made on our 'next-door neighbor'
Mexico, and try to verify the regional trade theorem."

Participants received an exhaustive briefing from David W. Eaton, trade
official and professor at the EGADE School of Business at Monterrey Tec,
a leading business school in Latin America. They also met with officials
from PEMEX (Petr—leos Mexicanos), one of the world's leading oil
companies, and the Asociaci—n de Maquiladoras, a leading private-sector
alliance. They toured a modern Mattel toy manufacturing plant (operating
under the Montoi nameplate); Cervecer’a Cuauhtemoc Moctezuma, the
country's most successful brewery; and the Bolsa Mexicana de Valores,
the country's stock exchange. The undersecretary for international trade
negotiations, Angel Villalobos Rodriguez, visited with them, as did
officers of BBVA Bancomer, the country's leading private financial
institution; and several lawyers doing business in Mexico. Executives
with Telmex, Mexico's leading communications company, also conducted
briefings and lively question-and-answer sessions.

The lessons were many, ranging from the problems associated with
managing an emerging economy to dealing with vestiges of political and
social dilemmas from earlier eras.


Priming for the GLEMBA Experience 

While the answers were unique to Mexico, GLEMBA preparations for finding
them were not. Each year, the program selects a region, country or group
of countries as its academic study tour target. GLEMBA students prepare
for the tour by collaboratively researching and developing a synopsis of
political, economic, social and cultural history and current trends
there, as well as exploring selected industries, and preparing a
briefing book. During the tour, the class meets with government
officials, legal representatives, multinational firms and local
businesses to help translate the facts into real-life experiences.

Previous trips have included such far-flung destinations as Vietnam,
Singapore, Malaysia, Hong Kong, the Czech Republic, Germany, Brazil,
Poland, France, Hungary and Slovakia.


Seeing the Business Spectrum- End to End 

In Mexico, says Jeff White, regional sales manager for Cisco Systems
Inc. in Farmers Branch, Texas, "we got to see both ends of the spectrum,
in terms of business efficiency. On the far left-hand side, you have
companies like PEMEX, which is controlled by the government, and on the
far right-hand side, you have companies like BBVA Bancomer and Mattel,
which were very advanced in their business strategies."

In its visit to PEMEX, the class learned about constitutional barriers
and economic hurdles involved in the debate on privatizing the
nationally owned oil company. PEMEX accounts for 40 percent of the
country's economy and contributes 60 percent of its revenues to the
government.

"They are trying to decide whether they should be an oil company or a
mechanism to fund the government," says Dr. Jonathan Hochberg, program
course director for GLEMBA.

The GLEMBA students gained frank insights into Mexico's view of illegal
immigration, says Jim Miller, director of ITS Project Management for
Alliance Data Systems Corp. in McKinney, Texas.

"[We learned] that there are 105 million Mexican nationals," Miller
says, "and then there are another 20 million Mexicans living in the
United States [who] send back to their families in Mexico about $13
million a year. The implications of that revenue stream make you see how
complicated the issue of immigration is between our two countries."


Showing Optimism Despite Obstacles 

Mexico indeed has a massive challenge, Mr. White agrees. "There is a
tremendous amount of opportunity, but there are so many issues the
country has to deal with - political, tax, and energy reform, things of
that nature," he says. "If it doesn't address these problems, it will
end up losing out to other countries, like China for example."

The stifling quality of the country's political infrastructure was "one
of the trip's most surprising revelations" for Yvonne Briese, marketing
director for North America for the beverage company Diageo. "It really
holds it back from being competitive and as aggressive as I think it is
capable of being," says the Stamford, Connecticut-based Briese.

Frustration with the daunting obstacles was evident, but all hope was
not dashed in country, the group noted. 

"In general, the people we met ... are optimistic about the future,"
says Raul Alvarez, of IVAX Diagnostics, a Miami, Florida-based company
that manufactures and markets proprietary diagnostic reagents,
instrumentation, and software worldwide.

Vice president of international marketing and sales, Mr. Alvarez travels
in Mexico on business frequently. The GLEMBA trip underscored for him a
growing pride among business and governmental officials. "They are
becoming more proud of themselves, more and more nationalistic, which is
providing them more motivation," he says. "They want to show that they
can succeed as a country."


Personalizing the Lessons 

For Dr. Ferrante, the backyard primer reverberated with her experiences
half the world away. "I lived and worked in India, also a developing
country that has done a lot of privatization and liberalization, and has
similar problems with overpopulation, pollution and poverty," she says.

"This trip was a reaffirmation or verification that countries that have
not had capitalistic or strong democratic roots in their formation
really have a whole different set of issues they have to deal with as
they attempt to become global players."

Insights like those - and the study tour itself - reinforce GLEMBA's
overall value. Students personalize their knowledge of the global
business strategies they have studied and forge their own international
bonds.