Management in the 1990s: The International Challenge

As we approach the 1990s, it is becoming increasingly clear that the United States has lost its competitive edge in international business competition. Signs of this can be seen in many places. Last year, for example, the United States had a trade deficit of $166 billion, making it the world's largest debtor nation, far surpassing such nations as Brazil, Mexico, and Argentina. Each year, we own less and less of our own economy. As American firms decline, companies in other nations often prosper. Consider the case of Japan. Toyota and Nissan are now the thirdand fourth-largest auto companies after General Motors and Ford, and they continue to gain market share each year. Nippon Steel is now larger than U.S. Steel or what is now USX and Hitachi and Matsushita are second and third after General Electric in consumer electronics. NTT is emerging as AT&T's principal competitor in the telecommunications industry, and IBM's only serious rivals in the mainframe computer industry are Fujitsu and NEC. However, the problem goes further than Japan. Consider the case of Korea. One of the largest and most modern steel mills in the world is Pohang Steel near Ulsan in South Korea. Hyundai Heavy Industries can build a supertanker to unique specifications in ten months, while the same project in the United States or Western Europe would take almost three years. Korea was the third nation (after the United States and Japan) to build the 256K D-Ram chip. Japan's principal competitors for the American and European consumer electronics markets are such Korean companies as Goldstar, Daewoo, and Samsung. And the car with the most successful sales record ever for a new entry in both the United States and Canada is made in Korea by Hyundai. Other examples from other countries could be cited. France's Thompson Group recently purchased GE's major television production capacity in the United States, while Italy's Olivetti and the Dutch-owned Phillips continue to make inroads in the American electronics market. However we look at it, we are facing a global economy and, as a result, our industrial competitiveness has come to rely increasingly on our ability to compete successfully with these rivals. The fact that we often do not win these competitions represents a challenge to both management and teachers of management. If the United States and other nations are to develop into successful world competitors, it is imperative that greater efforts are invested in developing the managers of tomorrow who understand global economics and political dynamics and can act accordingly. Among U.S. multinationals there is a need for managers who are mobile and adaptable, can deal effectively with a wide variety of people, and feel at ease and knowledgeable in different cultures of the world. If they fail to select and develop managers who possess these skills and abilities, countries like the United States run the very real risk of becoming what might be termed a "newly de-industrialized country" (in contrast to a newly industrialized country, or NIC). To avoid such a possibility, managers and teachers of management have a collective responsibility to examine all possible avenues for improving overall organization effectiveness. Education is one of the most promising avenues for meeting the challenge confronting American business, and U.S. business schools have the responsibility to provide the very best education for those students preparing for a career in business. An international perspective is now an essential element of the business curriculum, and students must be exposed to the international dimension of business throughout their academic program. ,vO. 11