Jenkins MBA Students Gain Global Insight While Studying in South America

Those are some of the take-aways that 15 NC State Jenkins MBA students reported following their 10-day trip to Buenos Aires, Argentina, and Santiago, Chile. Their travels were part of a new three-week course, Doing Business in South America, that included not only classroom instruction in Raleigh, N.C., but on-site meetings with industry and government leaders and educators in the two South American countries.

Before starting their travels, the students learned about the economic structure, political climate and trade practices in the two countries during classroom discussions led by Dr. Steve Allen, professor of in the NC State College of Management’s Department of Economics and Department of Management, Innovation and Entrepreneurship.

Allen also is the college’s associate dean for graduate programs and research and worked with the college’s faculty to develop a set of new international short courses for the Jenkins MBA program, including the South American business course that he led in spring 2010.

“It is vitally important for our students to gain an understanding of how business functions in different countries,” Allen said. “While classroom instruction here at the College of Management can provide the background, stats and facts, it takes being ‘in country’ – even for a short time – to begin to truly understand the context in which those facts and stats exist,” he said.

One of the lessons learned while in South America is the importance of “understanding the country in which you’re doing business, not simply applying a U.S. approach to everything,” said Geoff Bock in his reflections on the experience.

For example, Wendy’s and Pizza Hut did not adapt their menus to the Argentine preferences and were not successful in expanding their franchises in Argentina. McDonald’s did adjust its menu, offering European-style options.

The students were also surprised to discover that most consumer transactions in Argentina – including car and home purchases – were done on a cash basis. This was due in great part to the government’s strict control over banks in that country.

“There is a limit on how much a customer can draw out of his or her account per day. This makes most of the population very leery of making deposits, for fear that they won’t have easy access to their money,” reported Jenkins MBA student Brian Evitts in his reflections on the trip.

High interest rates on loans – 30 percent to 40 percent – also dampen interest in borrowing. This constrained the financial resources available to entrepreneurs seeking to expand their businesses and limits consumer access to high price products, such as newer model or luxury vehicles.

The students learned about efforts to support entrepreneurship in Buenos Aires during a visit to the city’s Metropolitan Design Center, a business incubator that serves a wide range of industries including design management, video games, animation, film, music and fashion.

A conversation with one of the business owners in the incubator – the designer and manufacturer of women’s slippers – reflects the struggles entrepreneurs have in the area. “It was an eye opener to see her and her employee hand sewing and cutting patterns for the fun, bright-colored slippers,” said MBA student Bri Tegtmeier.

Also, while “she had demand for her product, she had no means for increasing capacity and production,” Tegtmeier said. “It is something that many of us take for granted in the United States – the availability of loans from banking institutions or event confidence in the banking system as a whole.”

The situation was different in Chile, where the banking system was much stronger with a more stable government and political system.

In a meeting at the American Chamber of Commerce (AmCham) in Chile, the students learned that the country is advancing efforts in the area of sustainability and promoting use of English as the standard language of business. Challenges facing the country include improving intellectual property patent protection and boosting investments in innovation.

They also learned that most Chileans ask visitors three questions: Where are you from? How long have you been in Chile? How long will you be in Chile?

These questions reflect an emphasis on relationships that the students experienced throughout their short course in South America. It was evident in business conversations, which tended to longer, more conversational and included more personal information than in U.S. business meetings, as well as in the region’s approach to meals, which typically lasted two hours or more, allowing plenty of time for relationship building.

Business in the South American countries also operates on a different time clock. Most offices don’t open until 10 a.m., lunch is at 2 p.m., and dinner at 10 p.m. or later. For the energetic, the day wraps up with dancing at the nightclubs, starting after 2 a.m.

“My first trip to these Spanish-speaking countries was enlightening and I will certainly take a new perspective with me for future dealings with the Latin American region,” said MBA student Grant Shenk.

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The study abroad short course did include a bit of sightseeing and even a horseback ride in Argentina.