Doing business in the global economy

Executives from some of the nation’s leading companies discussed the ins and outs of competing in a global economy as members of a panel at Campbell University’s Lundy-Fetterman School of Business. Included on the panel were Tom Rabon, executive vice president of Corporate Affairs for Red Hat; Diana Allen, senior counsel at Cree Inc.; Richard Kahler, former president of Caterpillar’s China operations; and David Robinson, an attorney with extensive international legal experience with operations in Mexico and South America.Sharing their views on everything from how to build business relationships to the importance of learning how different cultures shake hands, the panel concluded unanimously that global negotiations can be tricky.Diana Allen, of Cree, is a graduate of Duke University law school who speaks German and Japanese. Cree is the leading innovator in the manufacture of semi-conductors that enhance the value of light emitting diodes or LEDs. The LEDs have many applications, including cell phones, computers and parking lights. Approximately 80 percent of the company’s revenue comes from international sales.”Global sales are key to our company’s success,” said Allen. “We’re trying to expand sales through new distribution methods and people on the ground in Europe and Asia. There is an old Japanese proverb that says to catch a tiger cub you’ve got to go into the tiger’s den, that’s what we’re trying to do by subcontracting overseas. We’re always looking at what we should do next to be successful in the global market.”Richard Kahler, who spent nine years in Hong Kong as president of Caterpillar’s China operations, helped create a worldwide marketing arm for Caterpillar in China. He emphasized the importance of learning a country’s language and culture before you begin negotiations.”In the Chinese business environment culture and heritage are everything,” he said. “The public perception of the Chinese work ethic is that it is never-ending, but the whole country shuts down for a week to celebrate the Chinese New Year. The word ‘yes’ doesn’t necessarily have the same connotation in China as it does in America either. The Chinese say ‘yes’ to acknowledge they hear what is being said.”Still the growth rate of the Chinese economy is very dramatic, Kahler said. Just a few years ago the average per capita income in China was only $1,000 a year; today it is 10 times that, but it is still a fraction of what the average American earns.”That is the Chinese labor advantage today and why they’re so extraordinarily competitive in the world market,” Kahler said.Founded in 1993, Red Hat is one of the largest manufacturers of open source software in the country and one of the fastest-growing according to “Fortune Magazine.” Yet, Tom Rabon, executive vice president for Corporate Affairs, said intense global competition makes him worry about the ability of his 10-year-old son to get a good job in the future.”The competition in the world today is very tough,” Rabon said. “However, there is no better place than America for people to be free, curious and passionate about an idea. That’s our defense against global competition.”According to Rabon, Red Hat is now helping to develop a lap-top computer that will be affordable to everyone and used by governments of developing countries.”Education is the great equalizer,” he said. “America is one of the few places where you can climb the ladder of success no matter who you are or what level of society you are from.”Attorney David Robinson agrees. “We’ve won the cosmic lottery by being born in this country,” he said. “You’re part of the economic elite of this world.”Robinson, who is also president of BGA USA, the American subsidiary of a Canadian company that converts waste into energy, said he sees the “green” alternative to fossil fuel revolutionizing the global economy.”Farmers in China are already growing crops to sell for energy,” he said. “Eventually, cows are going to be more valuable for their waste than for their meat.”The panel on globalization was part of Campbell’s second annual RBC Centura Business Week, Feb. 12-14. The week also featured a dinner for seniors and 3/2 MBA students at the RBC Center in Raleigh, round-table discussions with representatives from the business community and friendly, recreational competitions.Photo Copy: Dr. Derek Yonai, Lundy Chair, and David Robinson, an attorney specializing in international business, chat during RBC Centura Business Week activities at Campbell’s Lundy-Fetterman School of Business.

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