Business Leaders Share Insight on Doing Business in the Americas as UM School of Business Celebrates Launch of Innovative Executive MBA Program
May 18, 2014
For companies to successfully grow in Latin America, their executives must have a keen understanding of geopolitics and the ability to deftly navigate changing local market conditions, without losing sight of company values. Three University of Miami School of Business alumni who are regional executives for top multinationals shared that and other insights with other business professionals at a May 14 panel discussion on “Managing Business Growth and Navigating Uncertainty in the Americas.”
Often, when a presidential administration changes in a Latin American country, the entire paradigm of doing business there can change, said panelist Jose Acosta (BBA ’81), president for Latin America operations and public affairs at UPS. It’s not unusual for one administration to entirely reverse a previous administration’s decisions regarding everything from trade to taxes. And priorities may shift from collecting tax revenue to pushing economic growth, leading to significant policy changes.
“You have to be very, very aware of the impact of politics on your business … more than any region that is a developing region,” Acosta said. “You have to feel how the wave is going and what [the government] is looking for.”
The School of Business hosted the panel session in conjunction with a celebration to mark the launch of a new Executive MBA program designed for high-potential executives engaged in the Americas, particularly the high-growth markets of Latin America. The Miami Executive MBA for the Americas program, which begins in August 2014, blends nine on-campus sessions, held every two months, with distance learning over 17 months. The flexible format is designed to make it flexible and convenient for busy executives to earn the University of Miami MBA no matter where they live and work. Throughout the program, participants will focus on the real business issues they face every day as they do business in the Americas.
Those real business issues were the focus of the panel session. Like Acosta, panelists Javier Polit (BBA ’87), chief information officer of The Coca-Cola Company’s Bottling Investments Group, and Pedro Fábregas (MSPM ’08), president and CEO of Envoy Airlines (formerly American Eagle Airlines), also noted the impact of geopolitical concerns on business in the region.
“Staying close to the government in the countries you operate in is a priority,” Polit said. “Understand what their challenges and their priorities are.” A lack of such closeness, he noted, may have hurt the company in Mexico, which in October added a tax to all soft drinks sold in the country, in the hope that it would lead to less consumption of sugary drinks. “We learned that we probably should have better partnered with Mexico,” he said.
It may be easier for a multinational company to navigate such politics with local nationals in leadership positions. Fábregas noted that the general managers at all of Envoy’s airports within Latin America are local nationals, as are its country managers.
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“It helps that we don’t have expatriates any more running airports in Latin America – it helps a lot with the perception,” he said. “I think [having local managers] adds to understanding the politics that they have to deal with and then try to bring into the corporate framework.” Polit noted that Coca-Cola’s Bottling Investments Group has a policy of establishing a local leader within 24 months of entering a country with a new business.
For UPS, Acosta said, it’s often challenging to find local leadership right away, which means the company has to work even more closely with locals who aren’t company managers.
“When you have, in our case, an American company working locally in a country, you have to work very closely with the people,” he said. “The people have to see that the company is part of our country and not something that came from the United States.”
It’s a difficult balance in Latin America, working as a multinational in many different local markets. While local managers need the freedom and flexibility to adapt to rapidly changing conditions, the company still needs an overall strategy.
“You can set what the vision is, but how that vision is executed in each country is local,” said Polit. And Fábregas pointed out the importance of setting and following universal compliance and corporate governance rules.
“You want them to grow, but you also want them to do it in a way that you don’t have to send the compliance team in later on,” he said. “We want to give them the tools to be a leader … but they’ve got to do it the right way.”
The panel session was moderated by Joseph Ganitsky, director of the UM Center for International Business Education and Research and one of the School’s leading experts on Latin America.
The event was another in the School’s portfolio of initiatives and programs to engage the business community in the Americas. In addition to The Miami Executive MBA for the Americas program, the school offers a Spanish-language Global Executive MBA program for executives in Latin America. It also offers an Executive MBA program in Puerto Rico, among other programs designed for those engaged in the region.