Lessons Learned about U.S. While in Panama

Our ostensible purpose in traveling with MBA students abroad is to give them the opportunity to understand business conditions in another part of the world and to encourage them to develop the perspectives and skills useful in doing trade in a non-U.S. setting. Most are already experienced travelers and speak several languages among them. We are fortunate in having four students fluent in Spanish on the trip although none are native speakers.

But even experienced travelers have much to gain by meeting people in their own settings and asking them about their world and how it operates.

Perhaps less obviously we learn who we are when we discover who others are. We learn about the U.S. when we are immersed in a non-U.S. country. Those things that we take for granted are put in relief when we don’t see them.

At dinner last night, at Casa de Marisco, a wonderful seafood restaurant, I asked the students who were with Wil Agatstein and I what they were learning about their own country while in Panama.

Here’s some of what we talked about.

• They learned, as expected, that petty corruption is rampant in dealings with government officials in Panama and business people are very open in discussing it. Panamanian business elites believe government corruption is an impediment to development. The students have been surprised to be asked in return about our corruption. The U.S. is seen as an equally corrupt society by Panamanians and we have been asked about Bernie Madoff, AIG bonuses, the former Illinois governor, and the elite corruption of powerful business and political officials.
  
• The U.S. ran the Canal Zone as a strategic military asset for almost 100 years with little concern for the welfare of the Panamanian society. Panama has among the largest differences in wealth between the rich and poor in the world. Under Panamanian control the very professionally run Panama Canal Authority is producing billions of dollars for the local society, but more importantly is being used to teach management skills, environmental science, and engineering to the citizens. Why did the U.S. not take the opportunity to support its own interests in the Canal Zone while contributing to the local population in meaningful ways?
  
• The U.S. is complicated and bureaucratic in comparison to Panama. Personal connections – with and without bribes attached – is a quick way to get things done. One phone call lead to a quick chain of connections that allowed us to literally walk on the Canal locks. The official procedure would have taken weeks. A Panamanian corporate lawyer who works regularly with the global legal community said that “Americans like to complicate things, but then again they get paid by the hour.” In comparison the lawyers of other companies are more direct, less concerned with interpretation and more concerned with outcome for clients.
  
• Americans are too busy. We have all been astounded by the amount of time that important people have given to us, just to make sure we understand what we are seeing. They have clearly enjoyed the interaction with us, too. At dinner the table was ours for the evening. As one student said, “If this had been the U.S. the waiter would have invited us to sit at the bar and enjoy a free dessert if we would leave the table.”
  
• We do not use very much color. Houses and clothes are much more colorful here in comparison to the dominance of beige, grey and taupe in U.S. public life.

From the Pacific to the Atlantic by Bus in Two Hours

Panama’s geography has been simultaneously its great fortune and the source of its violent and often tragic history. Shaped like a bending salamander, the Panamanian isthmus today connects democratic ecotourism haven Costa Rica to the north, with Columbia and its illicit drug trade to the south. Panama is a long, skinny country with a history of outsiders controlling its fortunes.

Panama is an economically viable nation because of a canal that allows the transshipment of huge container ships and easy passage for cruise liners between Asia and North America. This accident of geography—a tiny waist that separates the Pacific Ocean and the Caribbean Sea—makes Panama a valuable piece of real estate in the global economy.

Panama was already important to maritime trade before the French started building the Panama Canal in the late 19th century. The U.S. Army Corps of Engineers finished the job in the early 20th century after the death of 25,000 laborers and soldiers from disease and accidents.

The region was favored by European explorers and traders as a way station for trade moving between South America and Europe. Panama’s location and fine harbors made it a favorite place to exchange goods and money, and often slaves from Africa as early as the 16th century.

On our first day in Panama we loaded into a rental bus for a trip to the Caribbean—a two-hour drive to the other coast. Panama has a tropical climate, but this season it is less humid and rainy than most of the year. We stopped at a roadside stand to try fresh coconut milk and buy a couple of watermelons. We inspected the plantains and taro roots, and the homemade condiments packaged in old Heinz ketchup bottles. The local stray dog sniffed about.

We stopped at Portobelo which lives up to its name "beautiful port." It is a lovely harbor surrounded by steep green hills and is a naturally defensible place in which to drop goods traveling up the coast. Portobelo is now a World Heritage Site whose museum and buildings preserve the memory of the region as a site of piracy, plunder, and the slave trade in addition to its role in merchant shipping between the Old and New Worlds.

The remnants of that world remain in the Custom House, the fortifications, and poignantly in the Panamanians of African descent who live simply, and in some cases in obvious poverty, in exactly the same place their ancestors were bought and sold.

Panama was, and remains, a country blessed and cursed by geography.

Continue to follow our travels on the trip's Web site >>

We're Off to Panama and Ecuador!

There was a time—and I remember it well—when we actually taught a course in international business at UC Davis. The idea was that there was business, and then there was that exotic version, international business, that dealt with trying to open markets in places that did not speak English as a first language. Mostly that meant tips on doing business in European capitals.

The rise of Japan as a major manufacturer forever changed our view of the U.S. as the only country that could export large amounts of goods, and even innovate management practices. We spent a decade studying Edward Deming, Theory M, and Toyotism as we tried to move away from domestic management practices we could trace to the era of Henry Ford in favor of lean manufacturing and continuous improvement.

More recently we accepted the idea that American goods made by U.S.-based companies such as The Gap and the Chrysler Corporation might have some foreign components, even a majority of them sometimes. We realized those really well-priced goods at Wal-Mart are often sourced from countries we have trouble placing on a map, and even that the Chinese government is ostensibly our banker.

What's the world coming to?

We are linked, for good and for ill. We design in one place, source in another, and sell everywhere it makes business sense.

At the Graduate School School of Management we began teaching an International Study Practicum, which focuses on a specific country or region and culminates with a 10-day, first-hand learning experience. I’m on this journey to Panama and Ecuador with 16 UC Davis MBA students, and Wil Agatstein, the executive director of our Center for Entrepreneurship Executive Director. We have spent 10 weeks planning the trip and making contacts with law firms, political officials, construction companies, tourism developers, agribusiness firms, and a variety of for- and not-for-profit organizations. We’re here to learn about what it is like to be a business person in this region, to understand the opportunities and challenges of these countries in the global economy.

The students, who come from all three of our MBA programs, chose this region because they wanted to learn about developing economies where the possibilities for new markets are great and where market development is not already dominated by established firms. They are motivated by curiosity, concern for the developing world, and by the chance to develop their own savvy about global business processes. By sampling different parts of these societies we hope to get a well-rounded, if initial take on business practice in Panama and Ecuador.

You can follow our travels on the Web site that one of our students, Sonny Johl, has created. We're sharing blogs, photos, comments >>

Teachable Moments

I lived next to an elementary school teacher who had an amazing collection of t-shirts and coffee mugs presumably given to her by students. I would join my neighbor for a cup of coffee and out of her kitchen cabinet would tumble bright cups with saying like “You can’t scare me, I teach 6th grade,” “Teachers do it with Class”, and “Cutie π”.

I was recently reminded of one of her t-shirts which said “To Teach is to Touch the Future.” That’s rather a grand saying, but the recent Cal Aggie Alumni Awards dinner was wonderful evidence that those of us who educate really have an opportunity to shape lives in profound ways.

I know faculty don’t always think of long-term profundity as we try to construct meaningful tests or coming up with a good example to make a point. But this year’s six alumni awardees gave ample evidence that their time at UC Davis had a deep effect on them. These effects spread through our society – and far beyond – in ways their teachers could never have imagined.

All six of the awardees were inspirational but I was especially moved by John Landers, recipient of the Emil M. Mrak International Award. John received a master’s degree in agriculture from UC Davis 44 years ago, in 1965, and has spent his long career in South America where he continues to have impact.

Under John’s leadership, Brazilians are embracing a zero tillage (ZT) soil conservation strategy that is preventing erosion and reducing greenhouse gases. Instead of upending the soil between plantings, seeds are sown directly into uncultivated ground with native grasses still in place. After harvest leftover plant materials such as stalks are left to compost and animals can graze between plantings. This is not only good for the environment, but ZT allows poor growers to succeed without resort to the financial risk of expensive tractors.

Last night I spoke to a group of our students and I wondered what they will do with their management skills. Our MBA students bring backgrounds and ideas garnered through an average of five years of work experience, so we are hardly reforming them in dramatic ways. We teach and provide valuable business skills to students who already know a great deal—they already have degrees, work experience, and well-formed understandings. I have, however, observed how a suggestion, an encouragement, or a reading assignment can open a possibility, build confidence, and reframe an opinion. As that pedagogical scholar Harry S. Truman once wrote: “It’s what you learn after you know it all that counts.”

I think I need a t-shirt.

Where Do We Go From Here?

UC Davis has a festive air this year as we celebrate 100 years of transforming the world, serving as an engine for innovation and for ideas that have improved the quality of life for people everywhere. Looking at early pictures of the campus, one is struck by the formal dress and simple technologies used by students and faculty. But 1908 was actually a period of great technological and social ferment, of innovation and exploration, the impact of which we can still feel.

The Wright brothers patented their plane in 1908, the first long-distance radio broadcast was emitted from the Eiffel Tower in Paris and Robert Peary sailed off for the Arctic in successful search of the North Pole. The first Model T was built by Henry Ford, and Albert Fisher’s new carriage company produced bodies for both horse-drawn buggies and the new automobiles. General Motors also was formed in 1908.

It was also an era of new ideas. Under the leadership of Theodore Roosevelt the conservation movement gained political traction and several national parks and monuments were dedicated, including Natural Bridges, Muir Woods and the Grand Canyon Museum. The women’s suffrage movement was growing in fits and starts around the world, but it wasn’t until 1911 that the men of California voted to allow women—but not Asians—the right to vote. Women’s participation in sports was on the rise, and they were admitted to the Olympic Games in 1912.

Commerce was exploding with new industrial machines and processes, and more reliable transportation distributed goods far beyond the areas of their manufacture. Increasing the geographic size of markets increased awareness of and the demand for goods. Frederick Winslow Taylor’s monograph, The Principles of Scientific Management launched an era of time-and-motion studies and spurred on management as an area of study in universities. Harvard Business School, founded in 1908, was only the seventh U.S. college of commerce, but 40 more would open by World War I.

Today mass manufacturing and mass consumption have made life materially comfortable for many of us. We enjoy a much longer life-span than the 47 years a U.S. adult could expect a century ago. Modern medicine and a less physically strenuous work life make it common for people to live into their 70s and 80s now. But we can also see the toll that conveniences have taken on our lives, our bodies and our world. We consume massive amounts of cheap, empty calories and many of us are obese and suffer from diabetes. We use a huge amount of energy, too, in our homes and vehicles, much of it from fossil fuels that pollute our air and water. However, many do not have access to the products, food and services we take for granted. Distrust of the West is, in part, a product of this disparity.

As I write this in late 2008, I feel the tempest of new technologies, certainly, but perhaps, more importantly, of new ideas. MBA students today are truly global citizens with wide-ranging skills and understandings. Many at UC Davis are using their knowledge to “fix” the problems of pollution, end unsustainable manufacturing practices and address the issues of underdeveloped communities. They are marrying the scientific and medical knowledge of campus colleagues with an understanding of the market to bring promising technologies to society more quickly.

What will business and society look like in 100 years? Despite the formidable social and environmental problems we face today, I am an optimist. I expect that the university—and the knowledge and alumni we produce—will be part of the process that brings us back into a sustainable balance. I know that business will be an important mechanism for delivering the goods.

I announced in September that this academic year will be my last as dean. I look forward to a sabbatical leave next year to continue my study of technology and the global economy. Then I will be back in the classroom with the terrific students we have at the UC Davis Graduate School of Management.

UC Davis study: Women still lag in holding top business posts

At a press conference on Monday, November 18, we released our fourth annual UC Davis Study of California Women Business Leaders. The UC Davis Graduate School of Management, in partnership with the Palo Alto-based Forum for Women Entrepreneurs & Executives, conducts the annual census, which details the presence of women at the very top of the 400 largest publicly held corporations headquartered in the state.

Our findings continue to paint a disappointing picture of female representation on the boards and in the executive suites of these high-profile companies: women hold only 10.9% of the top decision-making positions, virtually unchanged from last year. Nearly a third of these 400 companies have no women in top executive posts or on the board of directors.

It's a disappointment and a missed opportunity to include a more diverse pool of leaders in California's corporations. The same innovative thinking that drives the world's eighth largest economy is not propelling women into key management positions at the largest public companies in the Golden State. Once a year, we'll continue to shine a spotlight on what the top of corporations look like.

In fact, our 2008 census suggests that a woman today stands a better shot at winning a seat in the U.S. Senate than a CEO job in California. Only 13 of the 400 companies have a woman serving as CEO.

California has more high-profile women political leaders than ever before: U.S. Sens. Barbara Boxer and Dianne Feinstein, and House Speaker Nancy Pelosi in Washington, and here at home, state Assembly Speaker Karen Bass. Their achievements, individually and collectively, are cause for celebration. But I have to ask: What will it take for us to see similar progress in California's boardrooms and executive suites?

Read my Op-Ed on this issue in the Sacramento Bee.

Read more about the census, the press coverage and download the study

Seeing Big Changes

I recently had an hour-long conversation with Sacramento Bee business reporter Jon Ortiz. We talked about the changes I’ve seen at the Graduate School of Management, in management education and in the economy since I joined the faculty in 1981. We covered everything from how business students and faculty have changed, to Wall Street and international competition in the auto industry (which I’ve researched). The Q&A was published in the Bee on November 10. Enjoy the article: “UCD Dean Has Seen Big Changes.”