Global Entrepreneurship
Developing Global Mindset for
Entrepreneurs
Brian David Butler

                               Teaching:
                               Brian Butler is currently a pr...
Brian David Butler

                               International:
                               A global citizen, Brian w...
Brian Butler:
Founder of “KookyPlan.com”
– the wiki for Entrepreneurs
Exam


Review – grades
    next week (sorry)
Schedule for today
1.   Entrepreneurship ideas
2.   Cross-cultural issues for Global Entrepreneurs
3.   Homework review
4....
New Ideas?
What new business ideas?
• Discuss…


• +1 point for participation grade for students with
  original ideas (not previousl...
Also curious:

• Who works with family business?
• What are your plans after graduation?
Global Entrepreneurship:
developing the global mindset for
entrepreneurs


Class #7
Saturday May 22nd , 2010
   •Cross cul...
Why study Culture?
•   Market entry
•   PEST
•   International business JOBS (FUTURE)
•   Global citizen
Rather than a “laundry list”
• Better to develop a framework for analyzing
  cultural differences
• Rather than trying to ...
Preview of upcoming lectures
Cross cultural lessons will be useful when talking
   about:

1. Using outsourcing to build g...
Examples to discuss
• Forum-Nexus Study Abroad
 ▫ Example with teachers – American vs. Italian
 ▫ Relation with students
Your own examples?
• In class assignment:
 ▫ With a partner, discuss an instance of cultural
   misunderstanding that has ...
Cultural Orientation Index


COI
Cultural Orientations Indicator- COI
NOTE:

• One thing we need to remember is that cultures
  are never exclusively one or the other: cultures
  will likely b...
Homework– due Wednesday for
feedback, or at next class

• Each student is to make their own COI analysis
  ▫ Each factor –...
Handouts / emails
1. Culture Summary document- Dimensions /
   Orientations
2. Excel spreadsheet – COI comparison of
   Ca...
Mini case studies
• See other slides
• Use other projector….
Resources to learn more
Prof. Brian Butler’s notes online:
 ▫ http://globotrends.pbworks.com/Culture-issues-
   in-Brazil
...
COI & Entrepreneurship
Entrepreneurship and COI
1. Development issue:
 ▫   Which cultural traits probably lead to more
     entrepreneurship, hen...
Entrepreneurship and COI
1. Environment:
 ▫   Control
 ▫   Not “harmony” or “constraint”
2. Time
 ▫   Multifocused – versa...
Entrepreneurship and COI
4. Competitiveness
  ▫   Competitiveness vs Cooperation:
  ▫   Focus on benefits to self?
  ▫   l...
Entrepreneurship and COI
6. Thinking:
 ▫   Inductive vs. Deductive
 ▫   Slight advantage to deductive thought – not
     c...
Steps to take
• Order:
 1. Cultural due diligence (COI)
 2. then gap analysis,
 3. Develop strategy to minimize negatives
...
Style switching
• Who should switch? You? Them?
• Consider:
 ▫ Power relationship
    Buyer / supplier
    Salesperson /...
International IQ moment


What is happening
in Greece? -
discussion
Athens Greece – at the heart of a
 Athens Greece
European Crisis?
Athens Greece


• What is
  happening in
  Greece? –
Greek economy   Euro Zone

                Negatives:

                    • No control of monetary
                    po...
Greek economy – boom years




                http://en.wikipedia.org/wiki/Economy_of_Greece
Summary of problem + why important
• In recent history:
  ▫ First came the global economic crisis 2007-(9?)
  ▫ Contractio...
External funding + current accounts
• Lesson from past- current account deficits =
  dangerous
• Reliance on funding from ...
National “Balance Sheet”
                 • 3 Important parts (for our class discussion):
                         Curren...
National “Balance Sheet”

• Key: must “balance”

    If “current account” deficit,

      then… by definition…

       ▫...
National “Balance Sheet”

• GROUP:

 ▫ So…If imports are > exports… what must be
   happening in the “capital account”?
Answer…

    SURPLUS!!
    Money must be coming in from abroad to finance the
     current account deficits!
National “Balance Sheet”
• But…
 ▫ What happens if you do NOT have money coming in
   from abroad

 ▫ Note: just because y...
Answer:

  ▫ You must then dip into the Reserves (if you have any)
    and pay the difference… (gold, foreign currency)


...
Call for help

• IMF
• Or, for Greece… call the other Euro countries,
  and ask for loans

• But… put yourself in the Germ...
Recent struggles
• Greek shipping industry was hit hard by the
  decline in world trade
• Tourism – falls: 15% of Greece's...
Understanding Greek challenges
• In a macro sense:
• Facing 2 deficit challenges
1.   Current account deficits – remember ...
Understanding Greek challenges
2. Budget deficits - remember national balance sheet – assets
     (income) and liabilities...
Understanding Greek challenges
• In a macro sense:
• Facing 2 deficit challenges
1. Current account deficits – remember li...
Fears- Contagion
• There are many other countries that are running
  deficits.
• What happens if credits stop funding?
• P...
Other countries – BIGGER Debts




              http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&...
Other countries – BIGGER Debts




               http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661...
Other countries – BIGGER Debts




               http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661...
Other countries – BIGGER Debts




               http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661...
Other countries – BIGGER Debts




               http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661...
See…
• See economist article – history – credit crunch
• I will send it by email … and will discuss next
  week
Homework


Sorry 
Homework– due Wednesday for
feedback, or at next class

• Each student is to make their own COI analysis
  ▫ Each factor –...
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part 7: Global entrepreneurship class - culture

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part 7: Global entrepreneurship class - culture

  1. 1. Global Entrepreneurship Developing Global Mindset for Entrepreneurs
  2. 2. Brian David Butler Teaching: Brian Butler is currently a professor with Forum- Nexus, which is co-sponsored by the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan. He teaches classes on International Finance and Global Entrepreneurship in brian.butler@forum-nexus.com Europe every July and January. briandbutler@gmail.com LinkedIn/briandbutler Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global Trade at Thunderbird’s Global MBA program in Miami. He previously worked as a research analyst at the Columbia University Business School in New York City.
  3. 3. Brian David Butler International: A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled brian.butler@forum-nexus.com extensively in Latin America, Asia, Europe and North briandbutler@gmail.com LinkedIn/briandbutler America. Skype: briandbutler Brian currently lives in Recife, Brazil where he is teaching classes on “Global Entrepreneurship” at the university “Faculdade Boa Viagem”.
  4. 4. Brian Butler: Founder of “KookyPlan.com” – the wiki for Entrepreneurs
  5. 5. Exam Review – grades next week (sorry)
  6. 6. Schedule for today 1. Entrepreneurship ideas 2. Cross-cultural issues for Global Entrepreneurs 3. Homework review 4. International IQ: ▫ Greece – what's happening?
  7. 7. New Ideas?
  8. 8. What new business ideas? • Discuss… • +1 point for participation grade for students with original ideas (not previously discussed in class) • Include 3-questions analysis of idea: ▫ What problem? What trend? What transferrable? ▫ (so, start with idea, then use 3 questions to evaluate) Mine: water cup – airports – transfer from Brazil. Problem is price, size. Trend is economic crisis
  9. 9. Also curious: • Who works with family business? • What are your plans after graduation?
  10. 10. Global Entrepreneurship: developing the global mindset for entrepreneurs Class #7 Saturday May 22nd , 2010 •Cross cultural issues for Global entrepreneurs
  11. 11. Why study Culture? • Market entry • PEST • International business JOBS (FUTURE) • Global citizen
  12. 12. Rather than a “laundry list” • Better to develop a framework for analyzing cultural differences • Rather than trying to memorize cultural differences for each and ever possible culture you might encounter (French, German, Italian… too difficult!!) • Goal – develop skills of HOW to look for cultural clues, using a framework for analyzing culture
  13. 13. Preview of upcoming lectures Cross cultural lessons will be useful when talking about: 1. Using outsourcing to build global teams (4hww) 2. Global collaboration, crowd sourcing: 3. Clusters, entrepreneurship, and development
  14. 14. Examples to discuss • Forum-Nexus Study Abroad ▫ Example with teachers – American vs. Italian ▫ Relation with students
  15. 15. Your own examples? • In class assignment: ▫ With a partner, discuss an instance of cultural misunderstanding that has personally happened to you. Could this misunderstand have been avoided? How? ▫ Take 5 minutes to discuss: ▫ 1 person will present to the class…
  16. 16. Cultural Orientation Index COI
  17. 17. Cultural Orientations Indicator- COI
  18. 18. NOTE: • One thing we need to remember is that cultures are never exclusively one or the other: cultures will likely be one and the other, but with a clear tendency toward one of these two extremes.
  19. 19. Homework– due Wednesday for feedback, or at next class • Each student is to make their own COI analysis ▫ Each factor – what type are you? • Also, do a “gap analysis” German person: ▫ Deductive, linear, doing, low-context, direct, fluid time, single focus, competitive, equality ▫ Compare your COI with this sample person (German) ▫ Which areas do you have the greatest gaps? (areas of potential conflict)? ▫ What could you do (style switching) to lesson the potential problems?
  20. 20. Handouts / emails 1. Culture Summary document- Dimensions / Orientations 2. Excel spreadsheet – COI comparison of Canada, USA, Mexico
  21. 21. Mini case studies • See other slides • Use other projector….
  22. 22. Resources to learn more Prof. Brian Butler’s notes online: ▫ http://globotrends.pbworks.com/Culture-issues- in-Brazil • Sources: ▫ Thunderbird here Download the PDF » ▫ see the TMC site here: http://www.tmcorp.com/
  23. 23. COI & Entrepreneurship
  24. 24. Entrepreneurship and COI 1. Development issue: ▫ Which cultural traits probably lead to more entrepreneurship, hence more economic development? ▫ Which factors are most important for entrepreneurship + level of entrepreneurship in different places? 2. Personal issue ▫ What style switching should you do to promote entrepreneurship?
  25. 25. Entrepreneurship and COI 1. Environment: ▫ Control ▫ Not “harmony” or “constraint” 2. Time ▫ Multifocused – versatile, adaptation ▫ Ability to change project, change idea, work on many ideas at same time 3. Individualism ▫ Particularistic vs. Universalistic: better with “rules don’t apply to me” (not constrained)
  26. 26. Entrepreneurship and COI 4. Competitiveness ▫ Competitiveness vs Cooperation: ▫ Focus on benefits to self? ▫ leave the group / loyal to the group (thinking)? ▫ Comfortable with competition? ▫ Desire for self-recognition? 5. Flexibility ▫ Not “order” focused ▫ Better if likes flexibility, innovation, adaptation ▫ Comfortable with risks ▫ Dynamic goals (changing) ▫ Problem solving needs flexibility ▫ Tolerate unpredictable, dissent (Israel)
  27. 27. Entrepreneurship and COI 6. Thinking: ▫ Inductive vs. Deductive ▫ Slight advantage to deductive thought – not constrained by “fact”, but instead gravitate to grand theories, and “visions” (visionary) ▫ Inductive is better for big-company (systematic process) innovations ▫ Deductive is better for entrepreneurs and big changes 7. Future orientation (time?)
  28. 28. Steps to take • Order: 1. Cultural due diligence (COI) 2. then gap analysis, 3. Develop strategy to minimize negatives  “style switching” for results 4. Stay alert over time  Stop cultural “cruise control”,
  29. 29. Style switching • Who should switch? You? Them? • Consider: ▫ Power relationship  Buyer / supplier  Salesperson / purchasing agent  Customer / client ▫ Who must change? Style switch?
  30. 30. International IQ moment What is happening in Greece? - discussion
  31. 31. Athens Greece – at the heart of a Athens Greece European Crisis?
  32. 32. Athens Greece • What is happening in Greece? –
  33. 33. Greek economy Euro Zone Negatives: • No control of monetary policy •Can not devalue currency to regain competitiveness Positives •Low borrowing costs
  34. 34. Greek economy – boom years http://en.wikipedia.org/wiki/Economy_of_Greece
  35. 35. Summary of problem + why important • In recent history: ▫ First came the global economic crisis 2007-(9?) ▫ Contraction of credit, deleveraging ▫ Governments step up to fill void of missing consumer demand – deficit spending, Keynes, stimulus ▫ Credit continues to contract – less money to go around ▫ Creditors punish weak countries with external funding requirements – Greece is 1st in line (but likely not the last)
  36. 36. External funding + current accounts • Lesson from past- current account deficits = dangerous • Reliance on funding from foreigners • Short term funding • Pay off rolling debts • But, what happens if funding dries up? ▫ This is what happened to Lehman Bros in credit crisis (and Bear Stearns, etc) ▫ It is also what happed to Greece
  37. 37. National “Balance Sheet” • 3 Important parts (for our class discussion):  Current account ▫ Flow of goods and services, Roughly= exports - Must imports Balance!!  Capital account If If deficit… surplus.. ▫ Paying for the current account - Money flows ▫ Example: US government sells treasury bills pay out Build up  Reserves reserves. reserves. ▫ Foreign currency, gold, etc ▫ Used to finance gap between current & capital accounts ▫ “below the line” Martin Wolf book, “Fixing Global Finance”
  38. 38. National “Balance Sheet” • Key: must “balance”  If “current account” deficit,  then… by definition… ▫ “capital account” = surplus
  39. 39. National “Balance Sheet” • GROUP: ▫ So…If imports are > exports… what must be happening in the “capital account”?
  40. 40. Answer…  SURPLUS!!  Money must be coming in from abroad to finance the current account deficits!
  41. 41. National “Balance Sheet” • But… ▫ What happens if you do NOT have money coming in from abroad ▫ Note: just because you have a “current account” deficit… that doesn’t mean foreigners will pay the bill… ▫ Group assignment:  What happens?  What must you do? (hint: 3rd part of national accounts mentioned before)…
  42. 42. Answer: ▫ You must then dip into the Reserves (if you have any) and pay the difference… (gold, foreign currency) Follow up question: ▫ What if you don’t have enough reserves? Then what? What can you do?  (What happens if you are running a current account deficit, and if foreigners SUDDEN STOP supplying capital, but… you do not have enough reserves to pay the bill?)
  43. 43. Call for help • IMF • Or, for Greece… call the other Euro countries, and ask for loans • But… put yourself in the Germans shoes… would you want to pour money into Greece if you didn’t expect to get the money back? Will the Greeks change?
  44. 44. Recent struggles • Greek shipping industry was hit hard by the decline in world trade • Tourism – falls: 15% of Greece's GDP, and a major earner of foreign exchange
  45. 45. Understanding Greek challenges • In a macro sense: • Facing 2 deficit challenges 1. Current account deficits – remember line of trucks importing as we exited the boat in Greece – importing more than exporting. So, by definition… capital account must be in surplus to pay for current account deficit. Importing capital. Money came in not from foreigners investing in FDI (as was noted during speech with Metaxa this morning), but instead much $ came in from tourists. Tourism = importing capital (capital account surplus). But, remember what has to happen if the capital account switches from surplus to deficits? The current account must move from deficit to surplus. How? If currency can devalue (as they are apart of Euro zone)… then competitiveness must increase – either more efficient or lower wages… politically and socially painful process that could take YEARS!!
  46. 46. Understanding Greek challenges 2. Budget deficits - remember national balance sheet – assets (income) and liabilities (spending). For Greece, a bit part of income came from tourism, which dropped off significantly with the crisis. But, spending remained “too high”. Structural, difficult to bring down Governments weak, short term thinking. Difficult to fix structural troubles with budget. Need to cut costs. But, strong unions, and impatient democratic voters. Politicians that try to raise taxes or cut spending (fire teachers) are thrown out As opposed to governments in countries like Ireland that have made steps to address difficult structural troubles
  47. 47. Understanding Greek challenges • In a macro sense: • Facing 2 deficit challenges 1. Current account deficits – remember line of trucks importing as we exited the boat in Greece – importing more than exporting. So, by definition… capital account must be in surplus to pay for current account deficit. Importing capital. 2. Budget deficits - remember national balance sheet – assets (income) and liabilities (spending). For Greece, a bit part of income came from tourism, which dropped off significantly with the crisis. But, spending remained “too high”. Structural, difficult to bring down
  48. 48. Fears- Contagion • There are many other countries that are running deficits. • What happens if credits stop funding? • PIIGS of Europe ▫ Portugal, Italy, Ireland, Greece, Spain ▫ Threaten to tear apart Euro • US, UK are the big ones
  49. 49. Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com
  50. 50. Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com
  51. 51. Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com
  52. 52. Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com
  53. 53. Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_com
  54. 54. See… • See economist article – history – credit crunch • I will send it by email … and will discuss next week
  55. 55. Homework Sorry 
  56. 56. Homework– due Wednesday for feedback, or at next class • Each student is to make their own COI analysis ▫ Each factor – what type are you? • Also, do a “gap analysis” German person: ▫ Deductive, linear, doing, low-context, direct, fluid time, single focus, competitive, equality ▫ Compare your COI with this sample person (German) ▫ Which areas do you have the greatest gaps? (areas of potential conflict)? ▫ What could you do (style switching) to lesson the potential problems?
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