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The Importance of Cross-Nation Expertise in Global Business from 1983 to 2003

------ A study of the history of global business
management during the period of 1983 to 2003


Helen Yu
2005 International Scholar
Institute for Global Enterprise in Indiana;
Business School; Evansville University, U.S.A.
Global Advisor, eGlobeBiz.com
Guest Professor, China University of Law and Politics
Member of Academy of International Business


Abstract

During this period, companies from many countries around the world tried to expand into other countries; in the process, some succeeded and some failed. A number of papers using the available data have tried to explain the successes and failures of these global business ventures by means of Western economics and management theories. But these explanations ignored one key factor that played a critical role in global management practices - "Cross Nation" expertise. This paper attempts to explain their successes and failures in terms of cross-cultural theories and historical facts. In addition, it presents my research findings on the role played by cross-nation expertise in global business management during the years 1983 to 2003. My 20 plus years of work and researches in global management in several continents told me that it is critical for all professionals and executives to learn the following point: Theories and knowledge gained in single business/social/natural environment are not necessarily useful in another without the help of Cross-Nation analysis. This point will become even more critical in the coming new era during which competition among all civilizations and cultures in the world will increase dramatically.


I) Introduction
From late 2003, more and more Western companies began revealing to the media the significant profits they had made in global emerging markets, especially in the markets like Asia-Pacific region. For example, in CNBC's March interviews in 2004, the CEOs of Bea System, GM, HP and many others reported on good earnings from the China-Pacific region. MTV China, owned by Viacom, made six billion US dollars in profits for the year 2003 (1). Many people were intrigued by their success and really want to know how these companies had made such big profits in emerging global markets during that period and why they had not made them in the past. I feel that my expertise in global management should be able to offer some key explanations about the above. Therefore, I summed up my 20-plus years of original researches and personal insights in the field of global management, drawing especially on the connection between the above phenomena and the backgrounds of their corporate management teams. All the above led me to several major findings, one of which was the following: cross-nation expertise played a vital role in the success of global management during the period from 1983 to 2003.

This research paper is designed to show how I arrived at this conclusion. First, I will discuss how I learned about cross-nation expertise. Second, I will show my readers how cross-nation expertise influenced global management. Third, my readers will see what happened when senior management teams did not possess cross-nation expertise. Forth, I will discuss why cross-nation expertise played a more critical role than did mono-cultural expertise in global strategy and management - i.e., the rationale behind the above phenomena. Fifth, I will give a brief history of how global companies learned about and acquired cross-nation expertise during this twenty-year period.

Why does this research paper focus mainly on the period between1983 and 2003? The answer is that, during this complicated period of globalization, many languages, cultures, ideologies, and social systems interacted and contested in a relatively level playing field without significant military conquest or financed brainwashing. This period opened up an important new exciting era, one in which there will be much more competition and interaction among the world's cultures and civilizations. Because my academic and professional expertise was the result of the above global interactions, I soon came to realize that I was in a unique position to understand complicated cross-national management issues. This paper is a reflection of that understanding and will, I hope, add significant new insights into the field of global management and the history of world trade.

The research methods and writing styles used in this paper are a mixture of Western historians? methods and style, traditional Chinese historians? methods and style, and also that of Harvard Business School research papers. This is so because this paper is about cross-national management; hence, any one of the above three by itself would not be adequate. All are needed to analyze such a complex phenomenon. In addition, the use of different angles and perspectives enables researchers to form a more complete picture of an event. I have, therefore, used Chinese and English sources for this paper, and they are combined with original insights and interviews. (This paper uses an endnote style.)


II) What is Cross-Nation Expertise?

The term cross-culture is already well- established. This paper will, therefore, attempt to define the term cross-nation expertise. Why is this new term needed? My research findings indicate that the term cross-cultural is not adequate for describing the essential factor that influenced the outcome of much global business.
The term cross-cultural expertise is used mainly to describe the knowledge of two different cultures, but the people who speak English in the U.S. do not have a good knowledge of political and social systems in Canada. What's more, many foreigners with some knowledge of English and the culture of the U.S. do not have a good knowledge of the U.S. business environment. Therefore, I decided to use the term cross-nation expertise to describe this critical factor. This paper defines the term cross-nation expertise as "the profound knowledge of the business environments of two very different nations". "Profound knowledge" means an in-depth understanding of the language, thinking process, decision making process, history, social mentality and structure, as well as the political and legal systems of two different nation. In the following section, I will analyze the relationship between cross-nation expertise and global management success or failures.


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