The Argentinian trip which took place after the first year of the MBA at the University of Limerick allowed for a fantastic opportunity to observe first-hand some of the concepts, strategies and models that we had previously been exposed to during the course of our studies. It was also fascinating to see how the Irish have played a part in the development of a nation so far removed from Irish shores, a legacy not forgotten by Argentinians, reinforced by Irish names on shopfronts, streets and in the people we met.
Argentina is not a country I would have considered visiting and I was pleasantly surprised when it was chosen. It has a fascinating history and its current economic and political climate is just as interesting. A nation with fantastic natural resources, a skilled workforce and in a location which allows them easy access to trade routes would suggest fantastic opportunity. Unfortunately, during the course of our visit, it became abundantly clear that through mismanagement and political jockeying for self-interest, damage to the country’s economy has been affected. Similarly to what is happening in Greece since the recession of 2008 there is a lot of blame and few standing up to take responsibility. To further exasperate this, the political system has little support and it has become the norm to not pay your taxes and pay/demand bribes, adding a level of corruption to the country’s woes and further hindering recovery. The news is not all bad, as previously mentioned – the country has some fantastic natural resources including a skilled and plentiful workforce. Upcoming elections give hope that change is just over the horizon and each of the individuals that presented to us, along with the people we met, are cautiously optimistic for the future. Looking back on our studies over the previous 12 months, I felt I was better able to relate what was/is happening to Argentina with respect to each subject we have covered to date during our MBA studies. For instance (to name a few)
- International management allowed us to better understand how culture influences business, what motivates them and what they consider important.
- Economics helped us understand the fundamentals of the Argentinian economy and what was lacking to ensure/facilitate success.
- Financial management/accounting to better understand how the banking system and access to credit is vital for business, a resource significantly lacking in Argentina.
- Marketing, how messages need to be tailored for each market and that a nation like Argentina cannot simply be put into the broad-spectrum of Latin America but needs individual
In the classroom the majority of these concepts made sense, and in some cases we were able to attach some personal/shared experiences and examples to them. The trip to Argentina gave opportunity to see them in an impersonal first-hand way, within a country we were generally unfamiliar with, and one that operates in a manner far different to what we are used to in Ireland. This forced us to think and apply those theories/concepts in ways we had not previously considered, in doing so, it really reinforced how fortunate we are in Ireland and how these concepts/building blocks of an economy are vital. It is too easy to see how the mismanagement of resources and institutions in Argentina have led to its downfall, these are lessons we take home to keep in mind so as not to repeat-we can all play our small part to ensure economic success.
The International workshop gave me the opportunity to experience first-hand how dramatically the culture of a country influences how business can operate within them. There is no “one best way” to do business globally and there must be allowances made for culture. In Argentina it became clear very quickly that to operate efficiently you had to be able to adapt your business rapidly due to political uncertainty, widespread corruption and a week judicial system. While these create barriers to entry for FDI there are also opportunities to be had. There is however an interesting point to consider, in that, Argentinian managers can adapt to crisis far better than most, due to experience of facing continuous crisis within the Argentinian economy. The trick to operating successfully is to understand and adapt business decisions accordingly.
There is a huge divide between rich and poor and a very small middle-class, it is obvious that there is wealth in Argentina but access to it and distribution of is jealously guarded by the elite. With wealth comes power and the country’s political uncertainty and widespread corruption is a direct result of this. This has definite parallels in Ireland albeit to a lesser extent as our middle class is much larger.
Since returning to Ireland I see how Ireland has made similar decisions in the past and could have easily gone down a similar path if not for its membership of the European Union or proximity between the UK and the USA which essentially kept us on the straight and narrow. Some of the key elements that I have taken from this trip is that to work in Argentina or in any other different culture, it is important to stay true to your values but also embrace the local culture, perhaps by learning the language and use local knowledge/people as much as possible to help get the job done. You cannot assume that the way you operated elsewhere will translate well in another country.
Outline how your managerial effectiveness may have changed as a result of your participation in this International Workshop.?
If I ever get the opportunity to work internationally again I would be far more enthusiastic about understanding the culture and how it directly affects working/doing business in that country. I think the point of ingratiating yourself into another culture first starts with learning the language. Furthermore using local knowledge and people would be highly advantageous.
At home I believe I will treat the systems /institutions we use with a little bit more respect as without them, doing business becomes extremely complicated. The absence (although arguable) of corruption in politics and institutions facilitates doing business and now that I understand that these institutions and processes took a long time to develop, I will be a little bit more forgiving when things don’t work out in my favour, knowing the alternative from seeing it first-hand.
Finally I would say that with respect to dealing with people of different cultures I have become more interested in getting to know them so as to better understand how they react in certain circumstances. The reverse is also true in that I am more conscious now that my actions do not indirectly cause offence or misinterpretation due to cultural differences. Also understanding what drives them will hopefully help me become a better manager.
How has your participation in the International Workshop influenced your retrospective understanding of three concepts/topics explored in your MBA modules completed to date ?
The trip to Argentina reinforced many of the concepts that were identified to us in the international management module in semester two. The importance of culture, particularly for expatriates and for businesses looking to operate in countries that are significantly different than their own. We currently live in a period were trade is becoming more global daily and advances in technology have allowed for fast communication and access to markets otherwise inaccessible. Cultural differences must be taken into account at the strategic planning stage before making the move to set up a new firm abroad. Attitudes towards work, risk, customs, religion and entrepreneurship vary from region to region and a successful company will be able to adapt to and work with these challenges/differences. In Argentina there were many things that made sense to me, such as the basic elements of business which are commonplace throughout all walks of life irrespective of location. That being said there was a second layer to which I have no experience that is a business world where corruption is commonplace and expected, and where attitudes such as “non-compliance equilibrium” are commonplace (this is where people see their neighbours cheating with impunity and decide that they should also do the same). Not only that, but the fact that this is respected and that in order to be considered successful you will also need to partake or risk setting yourself at a disadvantage (a moral dilemma). Having the opportunity to meet with some members of the business community in Argentina I now have a different perspective and understand that there are other ways to do business aside from the one I am familiar with.
Looking at economics’ in the general context, some of the key indicators of an economy are GDP and inflation, in the case of Argentina these figures are not trustworthy and instead act to place the economy at a disadvantage to others with regards to foreign direct investment and overall business competitiveness. In an ever interconnected worldwide economy this places the Argentina economy at a significant disadvantage. The fact that they cannot track inflation causes problems such as not knowing how much to pay for a good, not knowing how much to pay for a wage and creates huge uncertainty. Further compounding the country’s economic woes is that with 60% tax evasion and 40% VAT evasion the government has very little ability to finance projects. Having an understanding of the pillars of a good economy and seeing how lacking Argentina is helps reinforce how important they are and how easily they can fall apart.
The third concept that really struck me with regards to the trip was regarding finance. Access to credit is almost non-existent for small business and the banking industry in general is very restrictive, with inflation at around 40% and interest rates in the mid-twenties compounding this. Argentina is a country that mistrusts its own currency and an influx of foreign exchange such as dollar and euro is preferable for business trades. Citizens attempt to save using foreign exchange-often purchasing it on the black market or via government policy (Argentinians who are at least $1000 a month can exchange up to 20% of their pay for dollars at official government rates which are more than the current exchange rate and therefore the lucky beneficiary immediately change them back into Pesos at up to a 40% discount. This practice is known as “making purée”, from an Irish perspective this chaotic system looks distinctly dodgy yet it is in operation in a country that is huge compared to Ireland). Without a strong financial sector that supports business an economy is vulnerable and it reduces competitiveness – particularly global trade.
PS; I would like to take the opportunity to thank the faculty and staff of the University of Limerick/Kemmy Business School (particularly Michele, Donal & Shirley) in organising a thoroughly enjoyable and informative trip. It was obvious that a lot of thought and effort went into its planning and execution. It was a fantastic learning experience and one that I would have otherwise never experienced. Please note that my thoughts and opinions are my own, the above is an excerpt from a submitted document as part of my studies towards an MBA at the University of Limerick.
TITLE: Reflective Statement, MODULE: International Workshop – Argentina, STUDENT: Jerry Crowley, ACADEMIC TERM: Year 1 – MBA