Develop global mind-set to fight foreign incursion

Local business people must also develop “a global mind- set”  if they are to counter the advances of foreign multinationals in the domestic market. And they can no longer afford to pay lip service to transparency. These were some of the observations made by Associate Professor of Management Practice (Strategic and International Management) of the London Business School, Donald N Sull when he addressed a University of the West Indies (UWI) Institute of Business 2005 Leadership Series conference at the Hilton Trinidad on Monday. Prof Sull noted that historically many companies the world over have not paid attention to what transparency really meant. However,  this is a luxury which companies in developing nations, like TT, could no longer afford because institutional investors in the US and Europe have what he called a “zero tolerance to opacity.” 

Over the last year, Government has embarked upon a drive to encourage greater transparency and accountability in several State enterprises and statutory authorities. A Green Paper on public procurement reform is currently before Parliament and in this document, Government is advocating the use of Transparency International’s integrity pact as “a useful tool for ensuring the demonstrable integrity of public contracting.” Sull indicated that in light of this development, it was incumbent upon local businesses to remove the clutter and bring transparency to their operations. He praised the recent publication of Guardian Life Holdings (GHL)  finances for the simple manner in which the transactions were presented. He said TT must be  “islands of transparency in a sea of opacity,” if they are to overcome the challenges posed by an ever-changing global economy.

The professor also said, given the integration of economies in different parts of the world, TT companies can no longer afford to merely operate within a closed economy or protect their home turf against the incursions of foreign multinationals. Sull described this phemonena as  “active inertia,” and said it was better that local businesses seek to become global competitors. “Would you rather be rich or king?” he asked the business people who made up the majority of the audience. Sull noted that in 1992, Mexican cement giant CEMEX spent $1.2 billion on two Spanish firms that were nearly the same size as its domestic operations. He said this showed that Cemex had learned about global markets and how to retaliate against global rivals on their home turf.

Observing that there were many business conglomerates in TT, Sull said it was important for such entities to refine their portfolios because “it is hard to compete against focused global competitors when a group’s resources and management is spread across multiple sectors.” Sull then provided an insight into the  profiles of Ispat founder Lakshmi Mittal, CEMEX CEO Lorenzo Zambrano and Samsung chairman Lee Kun Hee and suggested that TT business people find ways to emulate them. He explained that the common thread with each of these persons, and others like them, was the ability to lead and unleash the talents within their respective nations. Sull also urged local business people to find ways to recruit world class talent from multinationals to help them and partner with the best global firms.