The advantages of alliances that are 8,000 miles apart

W. P. Carey's partnerships with China and Mexico, which have been forming for the past few decades, offer business students opportunities to network in and learn about other country's differences.

As global markets grow increasingly complex, business schools are discovering that they are stronger when working together — not only in one-to-one partnerships but across the consortia of institutions.

As always, the W. P. Carey School can be found on the cutting edge of societal trends, with programs involving educational institutions 8,000 miles from each other — in Latin America and China.

In Latin America, the EGADE Executive MBA (EMBA) is an internationally-recognized, dual-degree program provided by two world-class business schools: W. P. Carey and EGADE Business School at Tecnologico de Monterrey (Mexico). Leading members of the W. P. Carey faculty travel to Mexico City to deliver courses in collaboration with the EGADE Business School faculty. They are delivered in English in a blended fashion, with about half the work in face-to-face classes and half online.

The unique collaboration was designed to deliver an outstanding executive education experience for business leaders who desire to accelerate their trajectories to C-suite levels by receiving an international education within the context of the Latin American business environment. Participants join a rich network of more than 120,000 alumni who graduated from W. P. Carey and EGADE Business School across key sectors and industries spanning 160 countries.

“Great learning and networking experience” for students and faculty are all but assured, says Gerry Keim, emeritus professor of management and EMBA faculty director for W. P. Carey. The new EMBA will be taught by faculty from both schools, and several of the courses will be team-taught. “The EGADE students will spend two intensive weeks in Tempe, Arizona, visiting companies where our ASU EMBA students work, including social activities with them. This will lead to expanded networks for students from both programs, and we expect this to lead to new business opportunities for all.”

In China, W. P. Carey offers an EMBA in association with the Shanghai National Accounting Institute. The degree is awarded by ASU, and all courses are taught face-to-face in Mandarin. There is also a Doctor of Business Administration that is taught in Mandarin with the Shanghai Advanced Institute of Finance at Shanghai JiaoTong University.

“With each partner, we've learned to find commonality in values, and build upon them to offer degrees and lasting relationships,” Keim explains. “Our EMBA partnership in China is over 17 years old and has gone through many changes in both the country’s leadership policies.”

Keim, a one-time Senior Fulbright Fellow, has long been involved in international activities, from leading students on study courses abroad to teaching at business schools outside the United States and establishing partnerships around the world.

Business schools have always had opportunities for faculty and student exchanges, as Keim points out, “but cooperation on degree programs like this should enhance and expand the understanding that comes with such exchanges. I worry that state institutions like ours may face a backlash from the growing nationalistic sentiments we see in our country, but I hope this is not the case.”

A major difference between the Latin American and Chinese markets grows out of their respective forms of government. “The political situation in China is extremely different” from those south of the U.S. border, says Keim. “The Communist Party is being inserted in every company operating there no matter the size, and the decisions that are being made there are reviewed by the party. We have nothing like that in Latin America anywhere. The current administration under President Xi is focusing on Chinese nationalism concerning the economy. There is strong pressure on Chinese companies to do business with Chinese companies, so the opportunities for American companies to sell into China are going to be fewer and fewer in the future.”

Relationships with China and Mexico are not new

Keim says some business schools have been forming these types of partnerships for the past few decades and he's puzzled that some consider it a new phenomenon. “We had a relationship with China starting in the ’90s, and Mexico starting in the late ’90s.”

More recently, however, in his view, there has been a move in Washington, D.C., away from globalization and international relations. “I don't know anyone in business who doesn't realize the importance of having relationships with organizations in other countries, and in understanding the cultural and policy differences.”

ASU has had such partnerships before, he adds, “so this is nothing new for us. This opportunity to work with EGADE came to us last year and we were interested for two reasons: EGADE has the top-ranked MBA programs in Latin America, and Mexico is our second-largest trading partner. We think this cross-border trade will become even more important in the future.”

With the Shanghai partnership “we have over a thousand alums now, and they are enormously satisfied with the program,” Keim recounts. “They say it has contributed significantly to their success doing business in China and elsewhere.” As for the EGADE program, the first class will come in August. “Everyone here is excited about it,” says Keim. “They like the idea of getting two degrees, an MBA from us and one from EGADE.”

The participants are seasoned businesspeople, generally 35- to 60-year-olds who attend every other weekend, plus intensives. “These are seasoned mid-level managers, directors, sometimes small-business owners. Some of them are professionals like doctors or architects moving to manage a practice rather than just being a practitioner. And we have some not-for-profit people, as well, so they will be building their network.”

How culture influences business

These strategies, however, like all others, come with some caveats.

Keim feels that there is “no shortage of U.S. companies that have failed in their efforts to go into other markets because they assumed it wouldn't be that different from the U.S. market. Whatever differences that did exist, they assumed that people would ‘come around’ quickly and see it the U.S. way. That has been a formula for disaster.”

The key to long-term success, Keim has found, lies in establishing strong relationships among the key players. He points to ASU’s foray into Latin America as an example. “Our dean and their dean worked together on a board and got to know each other through that activity. From the first meeting with their administrators and faculty leaders we got along well, and we found our institutions have similar values. We both have successful EMBA programs with years of experience in the field. We both have extensive experience working with partners in different countries.”

Indeed, institutional differences often constitute a major issue — one that can make doing business in another country difficult — and can be categorized according to policies that influence both business activities and cultural norms. “This kind of joint-degree partnership provides opportunities to gain an understanding of these differences, and to learn how to operate within these institutional settings for students and faculty.”

Keim goes further, suggesting that “If you don't have relationships, then it's just a transaction — and transactions are easy to copy and duplicate. You want something that enables you to have a unique position with other organizations and the customers you need to build relationships with. This is strong in the Latin countries; the particular relationships are crucial.”

The partnership with ASU’s Mexican partners, Keim insists, is “an exchange relationship, a new program that we have been building with them, developing strong personal relationships first. The first meeting we had was a big dinner together 11 months ago, so you develop the relationships first. That is not the case in the U.S. culture, or Canada, the UK, or northern Europe. But in southern Europe, it's all about relationships.”

Part of the value in programs such as this lies, Keim believes, in the opportunities to get to know the differences in the business environment in another country. “You do that by getting to know people who are working in those countries, and by working in those environments yourself,” which he calls “absolutely critical to the future of doing business in the global economy. This is a way to do that.”

Cultural differences have definite influences on business practices. A perfect example, according to Keim, is the importance that each places on the worker. During the recession of 2009 and 2010, for example, a lot of Americans lost their jobs because companies were struggling. “For U.S. companies, the quickest way to cut expenses is to lay people off. In Germany and Austria at that time, far fewer people lost their jobs.”

Instead, employees cut hours by working short weeks. Some took pay cuts, reducing their salaries to 80%, “and to some degree, their government policies helped with that by providing some money to supplement their salaries for a little bit.”

Tapping into intellectual and human capital

Keim maintains that he has learned a tremendous amount from living and working around the world, “and there is no substitute for it. To the extent that this program leads our students and theirs to doing business together, forming joint ventures, working in these countries will significantly advance their intellectual and human capital to be successful in the future. Plus, it's fun learning about other countries and other cultures, understanding the differences and why the differences exist and respecting them.”

An example: In Latin American business circles, Keim relates, the first meeting or two between potential associates is almost always over a meal, “and they always include talking about your family, your interests in sports, art, entertainment, whatever. You are getting to know the person on the other side of the table, but you are not talking about business. You can't imagine that in the U.S. Who would have a meeting where we didn't talk about business five minutes into the conversation?”

He and his colleagues’ view is that these partnerships must be approached and operated based on mutual respect. “We have seen partnerships fail when one party acts unilaterally or with a sense of superiority. We strive to understand the institutional differences without judging them.”

Keim advises other schools looking to follow W. P. Carey’s example to begin by viewing these ventures as learning opportunities that will enhance their understanding and ability to live and work in other countries.

“As Americans, we have often failed in foreign policy ventures and business activities when we begin those endeavors in countries about which we know little,” he concludes. “Start by acknowledging how little we know, and seek to learn more about the institutional differences that exist in different countries.”